Shell resumes Arctic drilling plans

It was only last month that oil giant Royal Dutch Shell agreed to pay £55 million to compensate residents of the Bodo community in the Niger Delta for not one, but two oil spills.

The oil choked miles of mangrove swamps there and caused headaches and eyesight problems.

Amnesty said the price of fish rose tenfold and many fishermen had to find alternative ways to make a living. Local drinking water was contaminated.

So you can perhaps understand the collective gasps today as Shell said it planned to press ahead with another risky project – this time in the Arctic.

People had hoped Shell would walk away from plans to drill in Alaska’s Chukchi Sea but the group’s Chief Executive Ben van Beurden said he hoped to crack through the ice as soon as this summer.

A bit premature perhaps; he hasn’t got the operating permits yet, and previous attempts have left Shell with numerous legal challenges. But so great is the world’s demand for oil – and so large the potential reserves in the Arctic – that Mr van Beurden plans to press on regardless.

Oil prices

It’s a funny time to be talking about demand for oil when all the headlines are going in the opposite direction. There’s a global glut of oil, prices are tumbling. It’s because of those problems that Shell also said today it would have to cut about £10 billion worth of projects and investment this year. But it’s sticking with plans for the Arctic.

Shell is of course thinking about profits in the long-term. Oil prices rise and fall. And he’s right, the world will always need more oil. But the images of pristine ice and polar bears desperately swimming from clump to clump make Shell’s plans for the Arctic particularly controversial.

The Artic is already in deep trouble from global warming. The risk is that Shell’s corporate ambitions will only make things worse. An oil spill there, with thick sheets of ice trapping the oil underneath, would make any clean up virtually impossible.

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