What does America’s second-largest oil company think about how to deal with global warming? Why, exploit more carbon-intensive resources, of course.

When questioned about the need to address global warming in an interview with the Associated Press, Chevron CEO John Watson said he believes the only path to global prosperity is more “oil, gas, and coal.”

Watson also said that it’s up to government leaders to find “a better solution for us” when dealing with emissions — not the companies responsible for emitting the carbon pollution heating the planet:

AP: Do fossil fuel producers bear the responsibility for curbing greenhouse gas emissions?

WATSON: We have the responsibility to deliver our energy in an environmentally sound fashion. The greatest advancements in living standards in recorded history have taken place in the modern hydrocarbon era. I don’t think that’s coincidental. Our leaders have to make a decision. Do they want that to continue or do they have a better solution for us? So it’s not my call.

AP: How should society go about reducing greenhouse gas emissions?

WATSON: If you look around the world, the countries with the best environmental practices are the wealthiest. There’s a reason for that. If you’re worried about where your next meal is going to come from or shelter over your head, your focus is on those things.

AP: The U.S. is a wealthy country, how should we reduce emissions?

WATSON: Well, we are a wealthy country. On the other hand, the economy is growing slowly. We have high unemployment. I think that’s part of the reason why the president said now is not the time for a carbon tax, because he recognized that that would put pressure on the economy and put pressure on our energy prices, put pressure on manufacturing business, put pressure on consumers.

AP: When it’s time to address the carbon issue, how should we do it?

WATSON: It’s very difficult for the United States to go it alone. Watch what (other) governments do. The day-to-day decisions being made (show) that concern about climate change is less than other concerns that they have. China is racing by the U.S. in greenhouse gas emissions. Germany is shutting down their nuclear power, the only energy source with zero carbon emissions that can be produced at scale. Japan, much the same way. Governments around the world are making the choice that the benefits of lifting people out of squalor are very important. And affordable energy is the way to get there. And that currently comes through oil, gas and coal.

Naturally, developing more fossil fuels is the solution according to Chevron, the eighth-largest oil company in the world. And developing climate solutions is apparently the responsibility of others.

The view from more impartial observers is remarkably different.

One of the world’s most respected energy institutions, the International Energy Agency, has warned that roughly two-thirds of the world’s carbon reserves must stay underground in order to prevent disastrous global warming.

Even the World Bank — historically a major financial backer of fossil fuel projects around the world — agrees that the world is on a path toward “extreme heat-waves, declining global food stocks, loss of ecosystems and biodiversity, and life-threatening sea level rise” without immediate decarbonization.

The accounting firm PricewaterhouseCooper estimates we would need to quadruple our rate of divestment from fossil fuels through 2050 in order to avoid such a grim warming scenario, warning “we have passed a critical threshold.”

That’s why environmental activists have rolled out a new fossil fuel divestment campaign in order to directly target companies like Chevron that are avoiding responsibility for climate change.

Photo: Jon Klingenberg / US Coast Guard

by Kiley Kroh

It appears 2013 will begin much like 2012 ended for Shell’s Arctic Ocean drilling efforts – with yet another mishap.

After several failed attempts to secure the equipment in harsh weather, Shell’s enormous Kulluk drilling rig ran aground near Kodiak Island, Alaska late Monday night. With approximately 143,000 gallons of fuel and 12,000 gallons of lubricating oil and hydraulic fluid on board, the Coast Guard is now preparing for the “salvage and possible spill-response phase of this event.” Two Coast Guard flyovers on Tuesday did not detect any leakage but a severe winter storm – with winds up to 70 mph and waves as high as 50 feet – has prevented crews from conducting a full assessment of the damage.

After an initial exploratory drilling season plagued with technical failures, struggles with Mother Nature, and numerous warnings about the lack of preparedness to operate in the region, the oil company’s woes have only continued. In November, the challenging and unpredictable Arctic conditions created a logistical nightmare as Shell struggled to get the Kulluk out of the Beaufort Sea as winter sea ice encroached.

As the Anchorage Daily News reports, the rig was headed to Seattle for maintenance last week when a mechanical failure in the tow vessel halted its progress and left “crews struggling against worsening weather and a mobile drilling unit that was unmanned with no propulsion capability of its own.” Huge winds and fierce swells thwarted numerous attempts to reattach tow lines and bring the rig to safety. Once grounding appeared inevitable, crews worked to steer the vessel to an area where it would have the least environmental impact.

Fortunately for Shell, this latest incident occurred in close proximity to the Coast Guard station in Kodiak, which enabled the helicopter rescue of 18 crew members on Saturday in extremely challenging conditions. The station also happens to be the closest permanent Coast Guard facility to where the oil company intends to use the Kulluk when they resume drilling this summer – over 1,000 miles away or 3 to 4 hours by plane in ideal conditions.

Like each of the incidents before it, the ongoing crisis with the Kulluk underscores the numerous challenges presented by operating in the Arctic, as well as the industry’s lack of preparedness to anticipate and overcome them. Drilling for oil in the Arctic Ocean carries an enormous amount of risk – a fact pointed out not just by environmentalists but a major insurance company, bank, legislative body, and even a fellow oil major among others.

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The presidential and congressional elections dominated the American news cycle in 2012. And although climate change took a backseat during the campaign, energy played a surprisingly prominent role.

The news cycle was dominated by energy: Republican presidential candidate Mitt Romney made fossil fuel extraction his number one priority; fossil fuel interests spent hundreds of millions of dollars to promote oil, coal, and gas during the election; and President Obama busily defended his promotion of renewable energy after getting attacked by the fossil fuel lobby.

Looking back at 2012, here are some of the most important energy stories of the year:

AP Fact Check: In 36 Years Of Data, No Evidence That Drilling Reduces Gasoline Prices

In March, the Associated Press analyzed more than 30 years of gas price and domestic drilling data. It found absolutely no correlation between increased domestic drilling and lower prices for consumers. Why? Because oil is a global market and U.S. production represents a small portion of global demand.

This was a particularly important story in 2012. Throughout the election season, the fossil fuel lobby and proponents of “drill-baby-drill” pushed a plan for unchecked fossil fuel development, falsely claiming it would lower gas prices. Experience proved otherwise. Even though the U.S. is producing more oil than at any point since the mid 1990′s, gas prices have remained “stubbornly high.”

Big Polluters Spend $270 Million In Final Months Of 2012 Elections

Fossil fuel interests spent unprecedented amounts of money this election season. In the last two months of the campaign, groups promoting fossil fuels spent $270 million on television ads to influence the presidential, House, and Senate races. From April to November, these groups spent $265.9 million on the presidential campaign alone, according to a Center for American Progress Action Fund analysis.

But the lavish spending didn’t work. Despite spending record amounts of money, polluter groups failed to change the presidency, failed to change the balance of power in Congress, and failed to give Republicans the important coal states of Ohio, Pennsylvania, and Virginia.

Environmental Groups Celebrate A Political Victory: ‘Knock, Baby, Knock’ Beat ‘Drill, Baby, Drill’

Judging by pure spending, the 2012 election wasn’t looking good for environmentalists. Polluter groups outspent environmental groups 4-1, making it seem like the momentum was on their side. But the results showed otherwise: Four out of the “flat earth five” climate deniers in the House lost their races; Seven of eight Senate candidates supported by environmental groups won their races, thus preventing Republicans from taking the Senate and cutting off the drumbeat of anti-environmental legislation in the House; 11 of the 12 “Climate Heroes” promoted by environmentalists won their races; and the President kept his job.

While gridlock will likely define Obama’s second term, environmental advocates said the 2012 elections proved their strength: “We went head to head with the likes of Crossroads and Karl Rove,” said Jamie Rappaport Clark, president of Defenders of Wildlife, after the elections.

Shell’s Woes In The Arctic Underscore Challenges In The Region

The Arctic is shedding ice at an alarming rate due to global warming. The response? Oil companies want to use the opportunity to look for more offshore oil and gas that will only accelerate warming. In 2012, Shell became the first company to drill exploratory wells in U.S. Arctic waters, raising concerns about the local and global environmental impact. (For more on this, check out the great documentary produced by the Center for American Progress oceans team).

Shell’s troubles throughout the year proved just how tough it is to drill in the region. From crushing its oil containment unit “like a beer can” to losing control of its drilling rig, the company faced numerous challenges. And major organizations responded. In April, insurance giant Lloyd’s of London warned that responding to an oil spill in a region that is “highly sensitive to damage” would present “multiple obstacles, which together constitute a unique and hard-to-manage risk“; German bank WestLB announced it would not finance offshore oil or gas drilling in the Arctic, saying the “risks and costs are simply too high”; and Total SA, the fourth largest publicly traded oil and gas company in the world, said drilling in the region could be a “disaster.”

Renewable Electricity Nearly Doubles Under Obama

President Obama was attacked hard in 2012 for his promotion of renewable energy, green jobs, and environmental regulations. Many opponents claimed that stimulus investments in renewables didn’t work. But the figures told otherwise.

According to figures from the Energy Information Administration, non-hydro renewable electricity generation has nearly doubled since Obama took office, reaching 5.75 percent of net electricity. In 2008, before Obama entered the White House, non-hydro resources like solar, wind, geothermal, and biomass represented just over 3 percent of generation. While political uncertainty has made 2013 prospects for renewables uncertain, the U.S. has still maintained a strong role in the global market. Since 2004, one trillion dollars have been invested in the global clean energy sector, with a large portion of that coming from the American private and public sectors.

This is just a small selection of the many important stories throughout the year. Tell us what your top energy stories are below.

After a 21-city tour educating people on a new fossil fuel divestment campaign, climate activists are starting to see results.

In the last month, groups on 192 university and college campuses have organized campaigns to pull their schools’ endowments out of the fossil fuel industry. One small school, Unity College, has already committed to divesting from coal, oil, and gas. At Harvard, a school with the country’s largest endowment, 72 percent of students voted in favor of divesting from fossil fuels. Although Harvard officials balked, a group of student activists has kept the pressure on.

There’s another big piece of news on the divestment front this week. Seattle Mayor Mike McGinn is now calling on his city to strip fossil fuels from its two main pension funds. According to the city’s finance director, Seattle has $17.6 million invested in Chevron and ExxonMobil, as well as smaller investments in other oil and gas companies. Mayor McGinn sent a letter to the city’s pension fund managers on Friday calling for them to move their money elsewhere:

To the members of the Seattle City Employees’ Retirement System Board:

I write to you today to ask that you refrain from future investments in fossil fuel companies and begin the process of divesting our pension portfolio from those companies. I recognize that this process will require a thorough evaluation of the portfolio’s performance, assets, and investment strategies. City staff stand ready to assist you in this work.

Climate change is one of the most important challenges we currently face as a city and as a society. We have watched in recent weeks as weather influenced by climate change has caused significant damage and financial losses to cities and states on the East Coast. The projections suggest that the problem could get much worse. According to Bill McKibben and 350.org, fossil fuel corporations now have 2,795 gigatons of carbon dioxide in their reserves, five times the amount considered safe to avoid catastrophic climate change.

I believe that Seattle ought to discourage these companies from extracting that fossil fuel, and divesting the pension fund from these companies is one way we can do that. The City’s cash pool is not currently invested in fossil fuel companies, and I already directed that we refrain from doing so in the future. In addition, I am asking the Deferred Compensation Plan Committee to develop options for City employees to allow them to move their investments out of fossil fuel companies if desired, and to offer fossil fuel free investment choices to them refrain from future investments in fossil fuel.

The City of Seattle’s finance director informs me that two of the system’s top 10 investments are with ExxonMobil and Chevron. The pension system has currently $17.6 million invested with these two firms, which represents roughly 0.9% of the system’s $1.9 billion in assets. I understand that it is likely the system has investments in other fossil fuel-related entities as well.

There is a clear economic argument for divestment. While fossil fuel companies do generate a return on our investment, Seattle will suffer greater economic and financial losses from the impact of unchecked climate change. Our infrastructure, our businesses, and our communities would face greater risk of damages and losses due to turbulent weather that climate change causes. As a waterfront city, several of our neighborhoods and industrial districts are at risk if climate change causes a significant rise in sea level.

I believe that Seattle’s pension funds should be invested in companies that can provide a good return on our investment without putting our city and our future at risk. I am ready to work with the City Council and the pension board to make this happen.

Sincerely,

Mike McGinn
Mayor of Seattle

This is the first time a city official has called for pulling money out of fossil fuels since the divestment campaign began. The strategy, organized by 350.org and promoted by a slew of other environmental groups, is modeled after a campaign in the 1980′s that pressured South Africa into abandoning apartheid. While the South Africa campaign was effective in forcing an end to the country’s racial segregation policies, the fossil fuel campaign is meant as more of symbolic gesture to “strip the social license” of fossil fuel companies exacerbating climate change.

by Bill Becker

For those of us concerned about the future of the United States in an era of global climate change and international competition over diminishing natural resources, the new report from the National Intelligence Council (NIC) contains goods news and bad news.

The good news: The NIC predicts that in a “likely tectonic shift” the United States could become energy independent in the next 10 years. That’s a goal we’ve been trying to achieve since the oil embargoes of the 1970s.

The bad news: The NIC predicts we’ll get there by increasing our addiction to fossil fuels. In other words, we’ll stop importing oil, but we’ll export more greenhouse gases and make ourselves more vulnerable to rising seas and weather disasters. Surprisingly, the nation’s top intelligence agency doesn’t directly acknowledge this rather important trade-off.

That’s surprising because the NIC was established in 1979 to build a bridge between the intelligence and policy worlds. The analysis of global trends it issued earlier this month was produced with what the NIC describes as in-depth research, detailed modeling and a variety of analytic tools. Experts from think tanks, banks, government agencies and business groups in nearly 20 countries reviewed its report.

And it still got the future wrong.  Missing from the “black swans” the NIC considered are the unexpected technology breakthroughs and underestimated environmental traumas that are likely to prod us into a different energy economy than the NIC describes.

The NIC acknowledges that it can’t predict the future. But its best guess is that shale oil production in the United States, along with a continuing explosion in shale gas production made possible by horizontal drilling and fracking, means that “energy independence is not unrealistic for the U.S. in as short a period as 10-20 years.”  The undesirable environmental impacts of oil and gas production can be mitigated, the NIC says. It predicts that the benefits of more oil and gas production will include lower energy prices, more companies choosing to expand in the U.S., an increase in gross domestic product, an improved energy trade balance, as many as 3 million new jobs by 2030 and fewer carbon emissions than if we continued using coal.

Another outcome would be bad news for cleaner renewable energy resources. Cheap natural gas might result in “the lack of a major push on alternative fuels such as hydropower, wind, and solar energy,” the NIC says. “Under most scenarios, alternative fuels continue to provide a relatively small increase in the share of overall energy requirements.”

What’s wrong with this picture?  Here are a few problems:

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From: David Fenton

To: John Watson, CEO of Chevron

Dear Mr. Watson,

I’m the one who asked you about global warming at the Council on Foreign Relations last week. I accused you of being in denial. I’m afraid your answer proved it.

I pointed out that three recent reports warned we are headed for 4 to 6 degree centigrade warming over the next century — from those radicals at PricewaterhouseCoopers, The International Energy Agency and the World Bank. This is what your industry business model is threatening us with, a future that UK climate scientist Kevin Anderson has called “incompatible with an organized global community.” It will make coastlines unstable for generations as seas rise, bring the price of food beyond the reach of the world’s poor, create even stronger storms, droughts, wildfires and floods — all while wrecking the global economy. And it is happening now.

If you need a reminder, you can watch our exchange here.

Your answer? We have no choice but to keep burning all the fossil fuels to avoid returning to the Stone Age. China and India are doing it so we will too (sounds like what a five-year-old would say). There is no alternative technology, so we have no choice but to advance towards collective suicide. Such foresight and leadership!

But none of it is true.

What will return us to the Stone Age is burning all your reserves, and those of the other fossil fuel companies. That isn’t politics — its physics, as burning them will warm the earth beyond anything civilization has known.

Meanwhile, as the experts at McKinsey, the Rocky Mountain Institute and many others have shown, we can move towards an almost carbon-free energy system over the next 30 to 40 years at either zero net cost (McKinsey) or a $5 trillion dollar net present value savings to the economy (rmi.org). We have almost all the technologies needed, and as they scale they are coming down in price rapidly. Wind and solar are competitive in many places now, and soon won’t need subsidies (when will you give up yours?). With a smart grid, solar and wind can scale to at least 50% of our energy needs even before storage becomes more affordable, which it will. The new Tesla electric sedan gets 300 miles on a charge, and those prices will fall as volume rises too. Why isn’t Chevron leading us into this survivable and profitable world?

We can also save at least 40% of the energy we use just by making systems efficient, without sacrifice and with enormous savings, especially in buildings. This would end the recession and put millions to work. Why aren’t you leading this?

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In four of the swing states President Obama swept, voters said energy was one of their top considerations in casting their ballot, according to a post-election poll released by the American Council on Renewable Energy and Advanced Energy Economy Ohio Institute.

These voters also indicated they were supportive of candidates advocating for clean energy (Iowa: 80%, Colorado: 75%, Virginia: 72%, Ohio: 70%).

But these states and others saw heavy outside spending in presidential and Senate races, particularly on energy issues. In many cases, myths promoted in polluter-funded ads about the so-called necessity of the Keystone XL pipeline, the “war on coal,” anti-climate legislation, and anti-clean energy ended up losing. Despite $270 million in presidential, Senate, and House ads financed by polluter-connected groups — $31 million specifically on energy issues — clean energy candidates won in races down the ballot.

Energy was far from the only issue to play a role in election outcomes, but groups piled millions of dollars into ads to push polluter issues as a top priority. And where energy issues dominated in presidential and Senate races, voters rejected polluter claims, electing the candidates backing clean energy:

KEYSTONE XL: Back in January, the American Petroleum Institute promised to make the pipeline an issue that would have “huge political consequences” for opponents. But looking at races where it came up, often backed by heavy spending, the issue did not break through to voters. Not one Senator who voted to defeat Keystone XL construction in March 2012 lost his or her race. Connie Mack, for instance, repeatedly attacked Sen. Bill Nelson (D-FL) over his Keystone XL opposition, and lost by a wide margin.

In addition to candidate stump speeches, the Keystone XL pipeline appeared in $1.8 million ads bought by the U.S. Chamber of Commerce in the Virginia and New Mexico Senate races since September, according to Kantar Media’s CMAG data.

CAP AND TRADE: Of the $5.7 million of ads running against Virginia’s Tim Kaine since September by outside groups, four separate ads amounting to $2 million mention cap and trade, according to Kantar Media’s CMAG data. Ads mentioning cap and trade also aired in the Montana, New Mexico, Ohio, Pennsylvania, and Virginia races.

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by Lorne Stockman, via Oil Change International

The International Energy Agency released its annual flagship publication yesterday, the World Energy Outlook. The IEA made an historic statement in the executive summary.

It said, “No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal,” the internationally recognized limit to average global warming in order to prevent catastrophic climate change.

Let me rephrase that.  Over two-thirds of today’s proven reserves of fossil fuels need to still be in the ground in 2050 in order to prevent catastrophic levels of climate change.

We congratulate the IEA for recognizing this crucial point and encourage the organization to prioritize this message in its presentations and public messaging. It is especially important given that the world’s fossil fuel industry is working overtime to increase its proven reserve base.

Let’s take the Canadian tar sands industry as an example. As the chart below shows, the tar sands industry has enough projects producing, under construction and approved to blow well past the climate limits prescribed by the IEA. Nevertheless even more projects are lined up for regulatory approval leading to a possible trebling of production capacity over and above the IEA limit.

Globally, the oil industry as a whole is also lining up enough production capacity to cook the climate several times over.

According to one analysis, there could be as much as 110.6 million barrels of oil production capacity in 2020, while the IEA says that less than 90 million b/d is plenty, see the chart below.

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by Kiley Kroh

A season full of setbacks in Shell’s quest to drill for oil in the Arctic Ocean isn’t over yet.  More than a week after preparatory drilling operations ended for the season, the company is struggling to get all of its equipment out of the Beaufort Sea as winter ice encroaches.  As Popular Mechanics reports, as of Tuesday night, the company’s Kulluk rig was still moored in the Beaufort Sea where temperatures have dropped below zero.

While the conditions don’t pose any immediate danger, they underscore the immense challenge of operating in the severe and unpredictable Arctic.  Due to the extremely harsh winter conditions and lack of a major port facility in the region, Shell’s rigs and support vessels must begin the 1,000-mile journey back to Dutch Harbor before the route becomes too ice-choked to traverse.  As the Popular Mechanics reporter on board the rig describes, just unmooring the Kulluk has proven to be a logistical nightmare:

First, there were 83 men on board, a number that was supposed to go down to just 17 for the trip south. By Alaska standards, the weather remained stable, yet flights between the rig and the company’s facilities on land at Prudhoe Bay were delayed for days at a time. Shell had contracted with PHI, Inc., a helicopter services company that is ubiquitous in the Gulf of Mexico. But the company’s Sikorsky S-92 helicopters had not been prepared with de-icing equipment, and the pilots I spoke with lacked experience flying on the North Slope.

A second issue concerned the Aiviq tug’s fuel reserves. Shell had committed to laying a containment boom out on the ocean surface during vessel-to-vessel refueling, but the seas had been too rough to do that. The tug needed to refuel before starting to haul the Kulluk.

Finally, the Kulluk was required to offload its wastewater to another vessel for eventual disposal on land, but those operations also proved vulnerable to disruption by rough seas.

The latest challenges add to a long list of hurdles Shell has faced in a drilling season plagued with technical failures, struggles with Mother Nature, and an array of voices expressing serious concern about our lack of preparedness to operate in the region. Here’s a quick review:

• In February, an independent report issued by the Government Accountability Office identified a slew of environmental, logistical, and technical challenges associated with Arctic offshore drilling and concluded Shell’s “dedicated capabilities do not completely mitigate some of the environmental and logistical risks associated with the remoteness and environment of the region.”
• In April, insurance giant Lloyd’s of London issued a report on Arctic offshore drilling, warning that responding to an oil spill in a region that is “highly sensitive to damage” would present “multiple obstacles, which together constitute a unique and hard-to-manage risk.”
• German bank WestLB announced it would not provide financing to any offshore oil or gas drilling in the Arctic, saying the “risks and costs are simply too high.”
• In July, Shell briefly lost control of its Noble Discoverer rig, which came dangerously close to running aground in Dutch Harbor.
• In September, a British parliamentary committee called for a halt to drilling in the Arctic Ocean until necessary steps are taken to protect the region from the potentially catastrophic consequences of an oil spill.
• Total SA, the fourth largest publicly traded oil and gas company in the world, became the first major oil producer to admit that offshore drilling in Arctic waters is a risky idea, saying such operations could be a “disaster” and warning other companies against drilling in the region.
• After repeatedly failing to receive Coast Guard approval for its containment barge, a critical piece of oil spill response equipment, Shell was forced to postpone exploratory drilling operations until 2013 and settle instead for only drilling two preparatory wells.
• Then just one day after beginning its long-awaited preparatory drilling operations, Shell suspended drilling due to a massive ice pack covering approximately 360 square miles drifting toward the site.

Despite the harsh realities the company faced this season, Shell has spent six years and nearly $5 billion on Arctic offshore drilling and won’t be giving up anytime soon.  Shell Alaska spokesman Curtis Smith told the Washington Post the company considers this season a success and is “looking forward to revisiting these wells as soon as we can next year.”

It is critical to note, however, that the glaring deficiencies in infrastructure and scientific knowledge that could severely impede our ability to respond to an oil spill in the area won’t be addressed for quite some time – and certainly not by next year.

Watch a short documentary on the situation:

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