In short, the government says that meeting predicted oil demand is more important than climate security; and that current policies are sufficient. Both these positions are untenable. As to why the government has been working to water down EU legislation to make Arctic drilling safer, the government avoids the question.

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1) Bearing in mind that studies suggest we can only release 1/5 of the carbon held in fossil fuel companies’ reserves (Nature, 2009;Unburnable Carbon, 2011) if we are to have an 80% chance of staying within 2C, wouldn’t it be prudent to identify and seek to minimise the use of the riskiest and most environmentally and socially damaging of the fuels within those reserves?

Under IEA projections new production capacity will be needed to meet future demand.   Where that oil will be produced is a matter for the commercial judgement of those involved, in the light of relevant regulatory and economic conditions.  It is quite feasible that future non-Arctic oil sources would have higher greenhouse gas emissions associated with their production.

Regulating hydrocarbon activity in the Arctic is a matter for the Arctic states to determine in the light of local conditions.  These states have robust rules to protect the environment and regulate drilling which reflect their experience of Arctic conditions.

The IEA’s 2012 World Energy Outlook states that Arctic resources could play an important role post 2035 – while technological advances and/or higher oil prices could result in production taking off before 2035.

2) Since the IEA WEO 2012 describes the door to 2C as “closing” and notes that “successive editions of this report have shown that the climate goal of limiting warming to 2C is becoming more difficult and more costly with each year that passes” surely the government should be less complacent in relation to the implications for global climate change of opening up new reserves of fossil fuels such as the Arctic, and instead fully explore every opportunity to limit production?

Our approach is to seek agreements on limiting emissions through the UNFCCC process.  This ensures that the costs of climate change action are paid by those benefitting from the use of fossil fuels and has broad support internationally.

Seeking an international limit to hydrocarbon production would pose a number of major difficulties, not least in reaching agreement on the distribution of production quotas.  Such an approach would place a major burden on countries relying on oil and gas sales and  such a restriction is unlikely to be acceptable to them.  The approach could also distort the operation of the international energy market by reducing competition and potentially harm future security of energy supply.

3) Since the government “fully support the use of the highest environmental and drilling standards in the Arctic”, surely you would agree that it would be prudent to wait until these standards are ready to be applied and enforced before pressing ahead with high-risk drilling operations?

Throughout the global oil industry, comprehensive oil spill response plans are a part of project development.  These are prepared by companies and approved by national regulators prior to the commencement of drilling.   It will be for the national regulatory concerned to assess whether international standards are being met and that the proposed response offers adequate protections against an accident.  Drilling standards also need to reflect local conditions, which vary even within the Arctic.

All Arctic coastal states already have sophisticated regulatory systems covering both environmental protection and oil and gas production activities.  Each of the countries has produced a strategy on how they will approach the full range of Arctic issues that outline the need for environmental protection.

We welcome co-operation between Arctic States and industry on this issue including the work by the Arctic Council to develop binding rules on Oil Spill Preparedness and Response and best practice guidelines on marine oil spill prevention and hope to see the setting of the highest standards.

4) If the government “fully support the use of the highest environmental and drilling standards in the Arctic” why has it been secretly arguing against better safety regulation for Arctic drilling in Europe?

The UK already has a robust regime in place to regulate offshore oil and gas.  Environmental safety is paramount and offshore operations are only permitted in the UK where there is a thorough and comprehensive oil spill response plan in place.

Negotiations are continuing with the EU on the proposed Directive to regulate offshore oil and gas activities and the UK is working to ensure that the highest levels of safety and environmental protection are upheld in an effective manner.

5) What was the UK position on the European proposal to ban Arctic drilling?

There has been no official European proposal to ban drilling in the Arctic.  As the Government’s response to the EAC report makes clear, the Government does not support calls for a moratorium on oil and gas drilling in the Arctic.

A moratorium is unlikely to reduce overall greenhouse gas emissions significantly, since the lost production would be replaced – presumably at a higher cost – from elsewhere in the world.  It is quite feasible that such non-Arctic oil sources would have higher greenhouse gas emissions associated with their production.

Regulating hydrocarbon activity in the Arctic is a matter for the Arctic states to determine in the light of local conditions.  These states have robust rules to protect the environment and regulate drilling which reflect their experience of Arctic conditions.

6) Since the Arctic plays such an important role in determining the pace of global warming and climate change, and evidence is emerging of the link between a changing Arctic and climate change that is dangerous and disruptive for the UK, do you not agree that there needs to be a stronger voice for the latest environmental science in determining the UK’s Arctic policy?

The Government’s Arctic policy is based on respect.  Respect for the sovereign rights of Arctic States over their territory; respect for the rights and interests of indigenous peoples who live in the Arctic; and respect for the environment.  Anyapproach to the Arctic that does not respect all three of these elements will be counter-productive to the UK’s influence and ultimately our interests.  The Government believes that it has adopted the right approach towards the Arctic, both in its policies and in its response to the Committee’s report.

The Government recognises that the Arctic is changing and the need to keep its policy current.  That is why we will involve stakeholders, including environmental NGOs, scientists and industry, in development of the Government’s Arctic Policy Framework.

• Joan Walley MP, Chair Environmental Audit Committee
• Charlie Kronick, Greenpeace UK
• Louise Rouse, Fair Pensions
• James Marriott, Platform

In January’s Climate Radio we explored how the observed rate of change in the polar north is surprising scientists into revising their projections for the speed at which global warming will unfold – unless we take urgent action. But where scientists see warning signs and a wake up call, oil companies and their friends in government see only economic opportunity. So this month we take a look at where some of the battle lines lie in the fight to stop the Arctic being drilled for oil and gas and how concerned citizens can get involved and help win the war.

Last September a cross-party parliamentary committee of MPs in the UK  called for a moratorium on drilling in the Arctic – concerned about the potential impact on climate change and about the lax safety regime surrounding this high-risk activity. In January this year, the UK government responded by rejecting the committee’s key recommendations and using old science to suggest that Arctic drilling could be compatible with avoiding dangerous climate change. At the same time a Freedom of Information Act request discovered they the government had been lobbying against EU legislation designed to make Arcitc drilling safer.

Over the course of 2012 Shell’s claims that they were “Arctic Ready” collapsed after a succession of calamities and oil companies and investors started getting cold feet. In this programme we also look at how Shell’s Arctic drilling plans poses a risk to your pension and what you can do about it.

Arctic Drilling and “Dangerous” Climate Change

There is enough carbon in known fossil fuel reserves already to fry the planet. That’s before we add in new resources from the Arctic which are currently classified as “undiscovered”. So it is difficult to see how Arctic drilling could ever be compatible with avoiding dangerous climate change. The UK government’s attempt to show that it is (p.5) is not looking very convincing.

The government is using figures from the International Energy Association’s 2011 World Energy Outlook to show that Arctic drilling could proceed and still keep global average temperature rise within 2C. The first thing to notice is that the IEA’s principle concern has always been “energy security” with environmental security always ranking much lower on its priority list. When answering a question of science, the government should be using the latest and best science rather than the science chosen by the IEA.

Nevertheless Greenpeace has taken the government’s argument at face value and found it wanting for the following reasons:

• the government should have been using the IEA’s latest figures from WEO 2012 (not 2011)
• these figures show that oil “production figures [under the 450 Scenario] in the WEO 2012 indicate that world oil supply – a combination of existing production – plus fields yet to be developed, but already discovered – will meet that demand. This does not include Arctic fields [which IEA 2012 define as] yet to be discovered.”

So even on its own terms, it would seem the government’s argument has no legs. That’s even before we consider that:

• the IEA “450 Scenario” only gives a 50% chance of staying within 2C
• the highly rigorous Carbon Budget developed to inform the UN climate talks in Copenhagen in 2009, suggests that we can only release 20% of the carbon that is already contained in fossil fuel companies reserves if we want to give ourselves an 80% chance of staying below 2C (which is obviously still not a guarantee)
• 2C is no longer regarded as safe by scientists
• Leading climate scientist James Hansen and colleagues have calculated that we need to reduce atmospheric CO2 from current levels to between 300 and 350 parts per million “if humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted” so the “450 Scenario” that the government and the IEA are relying on is dangerously out of date
• even the IEA thinks that with our current policies alone, we are heading for a catastrophic 6C of global warming, so we should be grabbing every available opportunity to stop ancient carbon reserves being released to the atmosphere

Shell’s Comedy of Errors

The good news is that Shell’s record in the Arctic has been such a litany of disasters that any government wanting to explain a policy u-turn on the Arctic just has to point to this appalling safety record on the one hand and the inordinate risks (ecological, social, financial) on the other. Here are some highlights from Shell’s Arctic adventures in 2012:

• February: US Government Accountability Office concludes Shell is insufficiently prepared to meet the various challenges associated with Arctic drilling
• July: Shell briefly loses control of its Noble Discover rig after slipping its mooring and comes close to running aground; Shell’s spill response barge repeatedly fails to obtain Coast Guard certification; sea ice blocks access to the drill site
• September: Shell is forced to postpone exploratory drilling until 2013 after repeatedly failing to receive Coast Guard approval for its containment barge; after just one day of beginning to drill two preparatory wells, Shell suspends the operation when a 360 square mile ice pack heads towards the site
• September: Shell’s oil spill containment system test was a “spectacular failure” in which the containment dome was “crushed like a beer can”; the public only find out about this in December through a Freedom of Information request by a local public radio station
• November: Shell experiences numerous complications getting its Kulluk rig out of the Beaufort sea as winter sea ice approaches
• November: Shell’s Noble Discoverer drilling rig catches fire, an explosion is felt 200 yards away onshore
• December: The engine fails on the vessel towing Shell’s Kulluk rig; in difficult weather conditions, the Kulluk breaks free from a replacement towing vessel and Kulluk runs aground on the island of Sitkalidak; it is possible that Shell put the Kulluk on an accelerated schedule in order to avoid paying taxes (Repeated Misadventures)
• February 2013: Shell has sent its two Arctic drilling rigs to Asia for extensive repairs, putting its drilling and exploration activities in the region this year into question.

Shell is the company that in 2011 ran a campaign telling us that it was Arctic Ready. In the face of all the evidence to the contrary, in July 2012 the Vice President of Shell Alaska Pete Slaiby was sticking to this line asserting that “Shell has been Arctic-Ready for Years”.

Shell’s Drilling Plans Under Review

Shell’s drilling operations are currently on hold while the US Department of the Interior conducts a review of Shell’s activities in the Arctic looking at the company’s safety management systems; its oversight of contracted services; and its ability to meet US standards for Arctic development.

Shell also faces a possible criminal investigation by the Department of Justice which is looking at 16 safety violations identified by the US Coast Guard in relation to the Noble Discoverer The US Coast Guard has also announced an investigation into the grounding of the Kulluk.

Interestingly in February, a month after the Department of the Interior announced its review, President Obama nominated Sally Jewell as the new Secretary of the Interior, replacing Ken Salazar who had been criticised for his closeness to the oil industry and his active promotion and expansion of offshore oil drilling. Under Salazar’s reign BP’s Deepwater Horizon and 100s of other offshore drilling projects were exempted from full prior environmental review. Speaking in 2010 after BP’s Deepwater Horizon rig exploded, director of the Center for Biological Diversity, Kieran Suckling said:

Salazar has been a major proponent of the offshore oil drilling industry. He passed legislation as a senator in 2006 to open up the Gulf of Mexico in the first place to offshore oil drilling. He gets campaign contributions by British Petroleum. And then he walks into this agency he is supposed to reform, and instead of reforming it, pushes it to do even more offshore oil drilling.

Calls for a Moratorium Grow Stronger

In September 2012, when the UK parliament’s Environmental Audit Select Committee recommended a moratorium on Arctic drilling and establishing a sanctuary in the Arctic where drilling would not be permitted, it was adding its voice to a growing global demand.

At the start of 2012, 573 scientists, 60 members of Congress and 400,000 sent letters to the White House demanding a halt to offshore drilling. This year a coalition of 18 US environmental groups called on Obama to suspend oil and gas drilling in the Arctic and as of February 2013, nearly three million people have signed Greenpeace’s petition to create a global sanctuary around the North Pole and ban drilling and destructive industry in the Arctic.

In August 2012, indigenous representatives at an international meeting issued a Joint Satement Of Indigenous Solidarity For Arctic Protection. The Statement was subsequently endorsed by the Alaska Inter-Tribal Council.

… Today we gather our forces and refuse to continue to stand silently by, witnessing the destruction of our land.

We stand together in our call for a ban on all offshore oil drilling in the Arctic shelf. We cannot accept the ecological risks and destructive impacts of a spill on our lands and in our seas. The irresponsible practices of oil companies everywhere have provided us with more than enough evidence that oil spills in the Arctic seas will be inevitable. At the same time there are no effective and tested methods to prevent or clean up oil spills in the freezing Arctic seas …

Oil Companies and Finance Get Cold Feet

Throughout 2012 both oil companies and the financial sector became increasingly chilly towards the idea of Arctic drilling.

In July BP suspended its Arctic Liberty project due to cost and safety concerns. In September Total’s chief executive warned against Arctic drilling saying: “Oil on Greenland would be a disaster, a leak would do too much damage to the image of the company.” That same month, Statoil said it was postponing its Arctic drilling plans in order to see whether Shell could “demonstrate exploration operations can be reliably and cost efficiently conducted in the field.”

In the financial sector, Investment Bankers Credit Agricole CIB have introduced a policy which prohibits the funding of new offshore drilling projects. In April,German bank West LB said it would not be funding Arctic drilling as “the risks and costs are too high” while Lloyds of London (self-described as “the world’s leading insurance market”) described Arctic drilling “a unique and hard to manage risk.”

Is Your Pension at Risk?

According to Fair Pensions, Shell is generally one of the largest holdings in every UK pension fund. The risk of an oil spill in the Arctic poses significant risks to investors in Shell. As Fair Pensions put it:

The financial impact of the Deepwater Horizon spill on BP plc demonstrates the company-wide impact of failings at a single operation. Investors should consider whether potential failing at Shell’s Arctic-conditions projects, which are driven by its Exploration & Production division, pose a significant risk to the overall financial health of the Shell group.

The Deepwater Horizon disaster saw BP cancel its dividend pay outs and the company’s share value experienced a long-term drop from which it has still not recovered. BP has been selling off its assets in order to pay for its costs in relation to the spill. These costs amount to over $40 billion so far with perhaps another $40 billion in the pipeline.

Increasingly we are seeing fossil fuel companies moving into a range of higher risk activities – such as tar sands, gas fracking, deepwater and Arctic drilling – as the “easy oil” runs out. Longer term, policies to limit climate change will turn many fossil fuels company assets into liabilities.

Fair Pensions has published a number of resources for investors concerned about the the risks of Arctic drilling. See the Action section below for actions you can take on this.

What Could the UK do if there was the Political Will?

Despite Prime Minister David Cameron’s husky-hugging election campaign trip to the Arctic, the UK seems to be actively hindering EU efforts to make Arctic drilling safer. It turns out that the Foreign and Commonwealth Office (traditionally very close to the oil companies and concerned with securing their interests) is leading on the UK’s Arctic policy – over-riding the Department for Energy and Climate Change and making a mockery of our UNFCCC commitment of avoiding dangerous climate change.

As the Environmental Audit Committee continues its work to dismantle the FCO’s false logic, we look forward to seeing the government accepting the common-sense recommendations of the committee and going further by playing an active role in advancing Arctic protection through such measures as:

• Joining those advocating publicly for a ban on Arctic drilling (eg senior White House figures Carol Browner & John Podesta)
• Using our influence positively in the EU
• Helping build an international alliance in favour of a ban on Arctic drilling
• Imposing restrictions on bank lending (RBS, Export Credit, International Finance Institutions including the World Bank)

Action You Can Take

• Sign the Greenpeace petition calling for the Arctic to be declared a global sanctuary
• Write to your MP about the issue – tell them why you care about climate change, make them aware of the EAC’s recommendations and the government’s refusal to implement them
• If you have a pension, start a conversation with your pension fund drawing on resources provided by Fair Pensions

Our two guides to what’s happening in the Arctic are Professor Peter Wadhams, Head of the Polar Ocean Physics Group at Cambridge University and Professor Timothy Lenton, the award-winning Chair in Climate Change and Earth Systems Science at University of Exeter.

The Oil Road by James Marriott and Mika Minio-Paluello (Verso Books, £16.99)

In the same way our culture has become largely ignorant of the journey our food takes to get to our table, we are also ignorant of the route fossil fuels take to power our high-consumption, energy-intensive lifestyles. It’s the way both agribusiness and the energy companies like it – the less we know about the far-flung impacts of their enterprises the better.

Marriott and Minio-Paluello are two campaigners with the London-based oil watchdog Platform – an organisation that has bred a kind of activism that, while based in hard research, experiments with creative ways of communicating its findings. In The Oil Road the pair take one continuous trip along the route by which oil from the Caspian Sea arrives at the rate of a million barrels a day at the refineries of Western Europe.

The project is reminiscent of last year’s Extreme Rambling – Walking Israel’s Barrier for Fun by comedian-activist Mark Thomas, but comes after 12 years of visits along the route as part of an ongoing exploration of the impacts of BP’s controversial $25 billion investment in drilling platforms and pipelines. Here too we get to meet vicariously the people shaping and shaped by the route in question and reconstruct a more accurate picture of what is otherwise a hotly politicised, and therefore deliberately obfuscated, reality.

The journey starts at the Caspian oil wells in Baku, Azerbaijan where the familiar rusting landscapes of Soviet era ‘nodding donkey’ oil derricks are being overshadowed by the shiny steel and glass of a corrupt construction boom. The authors meet Sabit Bagirov, who led the state oil company during the negotiations that culminated in the signing of the ‘Contract of the Century’ in 1994, with a consortium of oil companies headed by BP.

Bagirov argues that the oil companies used the backdrop of the Azeri-Armenian conflict over the disputed Nagorno-Karabakh territory (1988-1994) to argue for a greater share because they would be operating in an environment of high-risk. Indeed over the course of the negotiations from 1989 to 1993, the proposed Azeri share dropped from 50% to 20%. Bagirov shows them the unpublished contract that includes a $90 million sweetener payment to the Azeri government, $30 million of which was delivered personally by Baroness Thatcher.

Once on the road we meet refugees from the now “frozen” conflict as well as householders under whose properties the pipeline runs and farmers still awaiting compensation for loss of income during the laying of the pipe. The ubiquitous BP public relations representatives are generally diverting and evasive but occasionally unwittingly frank. “The ultimate goal of community investment is to have good relations with communities – ultimately to secure BP’s assets,” says one about the corporation’s token social projects.

“We closed it down to the media,” says another when asked about the Russian bombing of the pipeline that BP had dismissed as “fanciful”. Our narrators had been able to confirm the reports of the attack by locating the site and standing in the surviving craters which ran up to four metres deep.

It’s a personable and lovingly-crafted narrative, a rich tapestry of first-hand anecdote and historical reconstruction with a political and social excavation of the geography that weaves in the region’s changing fortunes, from the Tsarist through the Soviet to the current pro-western repressive regimes.

Along the way there are important lessons for investors about how oil companies manage and disguise risk; for policy makers about the real meaning of “energy security” in the 21^st century; and for activists thinking about where and when to intervene in a complex system.

Tensions ran high at the Tate Modern on Friday 7 December. At the members’ AGM, the Tate Members Council and Director Nick Serota were met with yet another barrage of criticism over their longstanding sponsorship arrangement with controversial oil giant BP.

For some time campaigners have argued that BP sponsorship is not an act of art-loving philanthropy, but a shrewd business deal contributing significantly to BP’s construction of a ‘social licence to operate’.This helps them to evade public or political pressure even though its operations involve such terrible consequences to communities, ecosystems and the climate. In the last couple of years, this has driven art-activist collective Liberate Tate to use Tate gallery spaces to carry out a series of dramatic, unsolicited performance interventions that contextualize the reality of BP’s operations.

The Tate Members Council isn’t really a decision-making body, but it is there to represent the views of over 100,000 fee-paying members. It is the largest membership body of any cultural institution in Britain, generating more than £5 million ($8 million) annually. This year, some members sent a letter to the council laying out a number of concerns about the sponsorship relationship, and came along to the AGM to flag it up in person.

At the very start of the meeting, the council’s chair, Channel 4 News’ Jon Snow, acknowledged that space would be given to discuss the BP issue, but I don’t think he or Nick Serota or deputy head Alex Beard were expecting the tricky questions to come so thick and fast as they did, and not only from those representing the letter-writers.

Tate’s Ethics Policy states that Tate will not accept funds in circumstances when: ‘The donor has acted, or is believed to have acted, illegally in the acquisition of funds, for example when funds are tainted through being the proceeds of criminal conduct.’

Earlier this month, BP agreed to pay a record $4.5 billion settlement for criminal charges regarding the Deepwater Horizon Disaster, on top of a number of similar court cases in recent years. Serota defended the stance, saying that BP’s operations aren’t ‘fundamentally’ criminal – but it seems like an awful lot of criminality is stacking up as part of the whole picture.

The meeting’s discussion kept returning to the sum of money that Tate is getting from BP. Despite being a public body, and having been the subject of numerous Freedom of Information requests, Tate refuses to disclose the actual sum, saying that it would be ‘harmful to commercial interests’. It seems that this might be a convenient strategy to cover up how little the sum might actually be.

The dominant discourse that Tate likes to maintain is that ‘terrible things will happen if we don’t have the BP money’ – but not disclosing the amount of money prevents any real debate from taking place about what those ‘terrible things’ may be, and whether there might be any alternatives. Under information law, the ‘commercial interest’ defence can be outweighed by the ‘public interest’ argument – so what Tate is effectively doing is prioritizing BP’s commercial interests in the sponsorship arrangement over the public’s interest in discussing how Tate could find alternatives.

At the end of 2011, BP made a sponsorship deal worth £10 million ($16 million) over five years with four different cultural institutions, including Tate. If you divided it equally, and if this is the only money that Tate is getting from BP, you’re talking about just £500,000 a year. That’s a tenth of what Tate raises from its membership scheme, prompting one woman at the AGM to exclaim, ‘is that all?’ In the 2011/12 financial year, Tate’s incoming resources were £113 million ($182 million). So this possible contribution from BP represents less than half of one per cent of Tate’s total income. Could  Tate really not accommodate a budget shortfall of less than half of one per cent?

Here are a couple of ideas for starters – how about holding a referendum among Tate members to see if people would be willing to increase their membership fee by a couple of pounds to accommodate the shortfall? Why not aggregate a bunch of smaller, but more ethical, companies to co-sponsor Tate in a co-operative fashion?

Tate seems to be making excuses for institutional inertia after having received BP money for more than 20 years. With an increasingly climate-conscious public, and the certainty of more disasters like Deepwater waiting to happen, it’s high time it took concrete steps to disentangle itself from Britain’s most controversial corporate sponsor.

Still great. This is Steve Price‘s winning entry to the 2011 TUC 60 second ad competition.