A new report by Greenpeace UK was released internationally today, warning of increasing financial risk for UK oil giants BP and Shell, who have invested heavily in the Alberta tar sands.
The report, co-authored by Greenpeace and PLATFORM and entitled BP and Shell, Rising Risks in Tar Sands Investment, has won the backing of several influential investment firms including Holden and Partners, Innovest, and Co-operative Asset Management. The report claims that shortfalls in the strategic reserves of BP and Shell are leading to a ‘distortion of management perspectives’, resulting in potentially catastrophic underestimates of risk.
The report is released on the same day that a number of large investment funds, senior analysts and financial advisors meet in London to criticize the long term strategy of the oil majors. Both BP and Shell have become increasingly involved in the production of oil derived from the Alberta tar sands. The sector now accounts for some 30 per cent of Shell’s proven reserves.
Acute labour shortages and the rising cost of delivering gas to the tar sands threaten to stifle the planned expansion of the sector.
An unrealistic reliance on untested carbon capture and storage (CCS) technology risks leaving the companies with huge stranded assets in the future, as international climate change regulations are strengthened at Copenhagen next year.
“The idea that oil sands will enhance energy security is delusional,” said Andrew Dlugolecki, Director of Andlug Consulting in the UK. “Investors should do all they can to challenge this misguided use of shareholders’ money, which will make global warming worse, and instead call for a new approach that is based on the reality of climate change.”
The campaign against tar sands began in summer after joint research by Co-op Investments and the WWF concluded that unconventional fuels could tip the world into unstoppable climate change. More than $125bn (£70bn) is to be spent by 2015 on such extraction schemes, which are highly carbon, energy and water intensive.
– from greenpeace, guardian