Tag Archives: oil pollution

The Unquenchable Thirst for Oil

Demand for oil is rising and the energy industry, in America and globally, is planning multi-trillion-dollar investments to satisfy it. No firm embodies this strategy better than ExxonMobil, the giant that rivals admire and green activists love to hate. As our briefing explains, it plans to pump 25% more oil and gas in 2025 than in 2017. If the rest of the industry pursues even modest growth, the consequence for the climate could be disastrous.

To date politicians, particularly in America, have been reluctant to legislate for bold restrictions on carbon. That is in part thanks to ExxonMobil’s attempts to obstruct efforts to mitigate climate change. …ExxonMobil’s policies on climate change remain marred by inconsistencies. In October the company said it was giving $1m, spread over two years, to a group advocating a carbon tax. ExxonMobil maintains that a carbon tax is a transparent and fair way to limit emissions. But the sum is less than a tenth of its federal lobbying spending in 2018. Moreover, the carbon tax it favours would include protection for oil companies from climate lawsuits.

The firm is also working to reduce leaks of methane, a powerful greenhouse gas, from its wells, pipelines and refineries. However the American Petroleum Institute  (API) has been a main force urging Mr Trump’s administration to ease regulations on methane emissions. The API’s other efforts include lobbying against incentives for electric cars.  ExxonMobil is not alone in trying to sway the climate debate in its direction either. Shell, Total and BP are all members of the API. Marathon Petroleum, a refiner, reportedly campaigned to ease Barack Obama’s fuel-economy standards. BP spent $13m to help block a proposal for a carbon tax in Washington state in November. The Western States Petroleum Association, whose membership includes ExxonMobil and Shell, also lobbied to defeat that tax.

While oil companies plan to grow, trends in cleaner energy are moving in the wrong direction. Investments in renewables fell as a share of the total in 2017 for the first time in three years, as spending on oil and gas climbed. In 2018 carbon emissions in America grew by 3.4% as economic activity picked up, even as coal fell out of favour. Mr Woods maintains that any change to the energy supply will be gradual. “I don’t think people can readily understand just how large the energy system is, and the size of that energy system will take time to evolve,” he argues… Out at sea, ExxonMobil is working to increase production. By next year an underwater web of pipes will connect wells on the seabed to a vast vessel. From there the oil will be transferred to smaller tankers, then to the vast infrastructure that can refine and transport it until it reaches consumers in the form of fertiliser, plastic bottles, polyester or, most likely, petrol. From beneath the ocean floor to your car’s tank, for about the price of a gallon of milk.

Excerpts from  Crude Awakening, Economist,  Feb. 9, 2019; Bigger Oil, Economist,  Feb. 9, 2019

Well blowouts and Pipeline breakdowns: Who Profits?

The global oil spill management market size is projected to grow beyond USD 125.62 billion by 2024. Growing incidents of oil spilling in the past along with severe safety and environmental policies are likely to propel the market over the forecast phase (2016-2024). Also, escalating pipeline and seaborne shipping of crude oil and chemicals could positively impact the market further.  The market is fragmented by technologies, techniques, applications, and regions. Technologies are Pre-oil spill and Post-oil spill. Pre-oil spill segment is divided into double-hull, pipeline, leak detection, blow-out preventers, and others. Double-hulling was the dominant segment in 2015 with highest shares.

Marine trade registers for a majority of petroleum products and natural gas transportation. Mounting demand for crude and petroleum products oil in Europe and Asia Pacific will boost the maritime trade growth further. Post-oil spill segments are mechanical, chemical, biological, and physical. Chemical and mechanical containment and recovery are the techniques used in the industry….In 2015, onshore post-oil spill sector was valued close to 60% of the total market demand. Regions such as Norway, U.S, Mexico, Canada, U.S., China, and Nigeria have observed well blowouts and occurrences of pipeline breakdowns. This could be accredited to huge market diffusion in past

Main regions in the market encompass North America, Europe, Asia Pacific, the Middle East and Africa (MEA), and Central & South America. North America was the leading market for pre-oil spill management. It was estimated at 40.1% of total demand in 2015. This region will potentially face lucrative demand due to production activities and increasing oil & gas discovery. Pre-oil spill management shares in Asia Pacific will gain over USD 21,540 million by 2024…  Top companies in the global oil spill management market include OMI Environmental Solutions, Skim Oil Inc., American Green Ventures Inc., and Spill Response Services.

Excerpts from Global Oil Spill Management Market Size is Projected to Grow Beyond USD 125.62 Billion by 2024, Hexa Research Press Release, Mar. 17, 2018

Cleansing the Oil Tanker

The oil spill that hit the Fujairah coast on January 25, 2018 was the result of tankers illegally cleaning out their holds.  That is according to the general manager of Fujairah port (UAE), Capt Mousa Murad, who has called for 24-hour monitoring of ships to tackle the issue.  “The recent oil spills have been caused by tank cleaning by passing ships,” Capt Murad told The National on Tuesday.  “Especially when tankers change from [carrying] one product to another,” he said, implying that the spills are made up of residue cleaned from within the tanks.  He said the oil “comes from international waters and could hit Dibba, Fujairah or Khor Fakkan.”…

TankerTrackers.com, a pro-bono website that monitors the flow of oil at sea and investigates oil spills, previously suggested that January’s spill was caused by a ship-to-ship transfer.Ship-to-ship transfers happen when a smaller vessel supplies a larger one with oil and spills from overflow can happen through negligence or by accident.

Excerpts from Fujairah oil spill caused by tankers ‘illegally cleaning their holds’ , The National UAE Edition, Feb. 14, 2018

Spilling Toxic Liquids – Train Accidents

The US federal government predicts that trains hauling crude oil or ethanol will derail an average of 10 times a year over the next two decades, causing more than $4 billion in damage and possibly killing hundreds of people if an accident happens in a densely populated part of the U.S.  The projection comes from a previously unreported analysis by the Department of Transportation that reviewed the risks of moving vast quantities of both fuels across the nation and through major cities. The study completed last July took on new relevance this week after a train loaded with crude derailed in West Virginia, sparked a spectacular fire and forced the evacuation of hundreds of families .  This  accident was the latest in a spate of fiery derailments, and senior federal officials said it drives home the need for stronger tank cars, more effective braking systems and other safety improvements.

The volume of flammable liquids transported by rail has risen dramatically over the last decade, driven mostly by the oil shale boom in North Dakota and Montana. This year, rails are expected to move nearly 900,000 car loads of oil and ethanol in tankers. Each can hold 30,000 gallons of fuel.  Based on past accident trends, anticipated shipping volumes and known ethanol and crude rail routes, the analysis predicted about 15 derailments in 2015, declining to about five a year by 2034.

The 207 total derailments over the two-decade period would cause $4.5 billion in damage, according to the analysis, which predicts 10 “higher consequence events” causing more extensive damage and potential fatalities.  If just one of those more severe accidents occurred in a high-population area, it could kill more than 200 people and cause roughly $6 billion in damage.

The Association of American Railroads  and the Railway Supply Institute, which represents tank car owners and manufacturers, said federal officials had inflated damage estimates and exaggerated risk….Safety officials are pushing to make the tanker-car fleet even stronger and confronting opposition from energy companies and other tank car owners….Derailments can happen in many ways. A rail can break underneath a train. An axle can fail. A vehicle can block a crossing. Having a better tank car will not change that, but it should reduce the odds of a tank car leaking or rupturing,…

Railroads last year voluntarily agreed to reduce oil train speeds to 40 mph in urban areas. Regulators said they are considering lowering the speed limit to 30 mph for trains not equipped with advanced braking systems. Oil and rail industries say it could cost $21 billion to develop and install the brakes, with minimal benefits.

Derailments of trains hauling fuel could kill hundreds, cost billions, Associated Press, Feb. 22, 2015

Oil Spills Everyday – the Impact

Silent oil spills” occur daily when oil is released into the environment during use or illegally dumping. Silent oil spills generate around 10 billion gallons of contamination in a single year. According to the Environmental Protection Agency’s “Developing a used oil recycling program” fact sheet, 40 percent of the pollutants in the water come from motor oil.

California’s bill, SB 916, attempts to address this by encouraging the use of bio-based motor oil. Most bio-based motor oils are made from the organic fatty acids found in various plants. The oil is non-toxic and is biodegradable….Very few are aware that 200 million gallons of used motor oil is illegally dumped in the United States every single year…More than twice as much motor oil enters the near shore waters off Los Angeles every year from urban runoff.

According to the EPA, petroleum based lubricants biodegrade slowly, they bioaccumulate in the tissues of marine organisms and they have high levels of aquatic toxicity. They also have much higher GHG [greenhouse gas] emissions relative to bio based alternatives, and of course, they are not renewable…

The fight to bring bio-based motor oil into the mainstream is an uphill battle for those seeking to unseat the deeply entrenched and deep pocketed gas and oil industry. Last year alone, the industry spent $144 million lobbying on legislators at the federal level.

Excerpt from Justin King, California attempts to battle ‘silent oil spills’ SPECIAL, Digital Journal, April 11, 2014

Bonga Oil Spill: the Nigeria v. Shell

The Director General, Nigerian Maritime Administration and Safety Agency (NIMASA) Mr. Patrick Akpobolokemi has slammed Anglo Dutch oil giant, Shell for the way and manner it handles oil spill in the country, especially in the oil and gas rich Niger Delta region.  He said the response of the foremost oil firm to oil spillages in the country fell short of international standards and practices.  The helmsman of Nigeria’s apex maritime regulatory authority spoke against the backdrop of the Bonga oil spill incident which wreaked havoc in many communities in the Niger Delta region in 2011.

The National Assembly had last week through the House of Representatives Committee on Environment, organised a public hearing over the incident.  Recounting NIMASA’s experience during the incident, Akpobolokemi said that the oil giant tried as much as possible to frustrate the agency’s attempts to move to the site of the spill.  As a stop gap measure, he explained that the agency provided some relief material to some of the communities affected by the spill.  Akpobolokemi flayed Shell for it poor response and nonchalant attitude towards spill incidents in the Niger Delta area and called for an immediate stop to this.

Said he: “The kind of impunity Shell and its allies have demonstrated so far in the Niger Delta area in the past must stop if the future of the people of Nigeria and the environment are to be protected,” adding that in other countries when spills like this occur, the first thing is remuneration, attention to the affected communities and finding ways of reducing the sufferings of the people and restoring the ecosystem, which Shell has failed to do. “Shell fell short of all these criteria and of course it is sad that it is only in Nigeria that we can witness this degree of impunity.

“We in NIMASA see this as a serious infraction to our laws, communities and the damage done to the communities and the ecosystem can be seen as genocide. When a similar spill occurred in the gulf of Mexico, Shell was alive to its responsibilities, they were made to pay compensation to the affected communities but today in Nigeria, any spill that occur, a claim of sabotage or third party claims are the order of the day.” He said NIMASA had made presentations before the House Committee on Environment, asking SNEPCO to pay compensation, not an administrative fee, to the communities totalling $6.5 billion.

“The response from Shell was evasive and do not suggest that it is a company that is alive to its responsibility. It believes that the culture of impunity can continue to go on, thereby playing with our legal system. May we use this opportunity to correct the wrong that has been done to the Nigerian environment because of the callousness of this company and we stand by our position that compensation must be paid to the communities.

“What we expect Shell to do is to come to the negotiating table and discuss with the affected communities on the means of payment so that the communities can get back their natural eco-system”.

John Iwori, Bonga Oil Spill: NIMASA Slams Shell, http://www.thisdaylive.com/,  Feb. 14, 2014

 

Foreign Corporate Immunity: Chevron/Canada v. Ecuador

A Toronto judge halted on May 1, 2013 an effort to enforce a $19 billion Ecuadorean judgment against U.S. oil company Chevron Corp in Canada, finding that his Ontario provincial court was the wrong place for the case.  The action is the latest skirmish in a two-decade conflict between Chevron and residents of Ecuador’s Lago Agrio region over claims that Texaco, which Chevron acquired in 2001, contaminated the area from 1964 to 1992.

Citing Chevron’s promise to fight the plaintiffs until “hell freezes over, and then fight it out on the ice,” Justice David Brown of the Ontario court foresaw a “bitter, protracted” battle that would be costly and time consuming.  “While Ontario enjoys a bountiful supply of ice for part of each year, Ontario is not the place for that fight,” Brown wrote in his ruling on Wednesday. “Ontario courts should be reluctant to dedicate their resources to disputes where, in dollars and cents terms, there is nothing to fight over.”

Alan Lenczner, principal lawyer in Toronto for the Ecuadorean plaintiffs, said they would definitely appeal, arguing that a multinational company could not be immune from enforcement in a country where it earns so much. “Chevron Corp itself earns no money,” he said in a statement. “All its earnings and profits come from subsidiaries including, importantly, Chevron Canada.”  Chevron Canada’s assets are worth more than $12 billion, the plaintiffs had said, and alongside separate actions in Argentina and Brazil, they had sought to persuade the Ontario court to collect the damages awarded to them by the South American court.

Chevron, the second-largest U.S. oil company, has steadfastly refused to pay, saying the February 2011 ruling by the court in Lago Agrio was influenced by fraud and bribery. A related fraud case goes to trial in New York in October.  The Supreme Court of Canada has ruled that the country’s courts can recognize and enforce foreign judgments in cases where there is a “reasonable and substantial connection” between the cause of the action and the foreign court. Chevron called Brown’s ruling a “significant setback” to the Ecuadoreans’ strategy of seeking enforcement against subsidiaries that were not parties to the Ecuador case.  “The plaintiffs should be seeking enforcement in the United States – where Chevron Corporation resides. In the U.S., however, they would be confronted by the fact that eight federal courts have already found the Ecuador trial tainted by fraud,” Chevron said in a statement. Last month, a consulting firm whose work helped lead to the $19 billion award against Chevron disavowed some environmental claims used to obtain the judgment.

Excerpt, Judge halts Chevron-Ecuador enforcement action in Canada, Reuters, May 1, 2013