By re-entering the controversial oil development project, Shell would ‘stand to gain billions in the midst of wartime price hikes.’
As oil prices continue to rise in the wake of Russia’s invasion of Ukraine, fossil fuel giant Shell is ‘reconsidering’ its decision to abandon the Cambo oil field project.
In December 2021, work on the proposed development off the west coast of Shetland was paused following Shell’s decision to withdraw from the project, citing the economic case for investment was “not strong enough.”
Climate activists welcomed the multinational’s decision not to go ahead with the controversial oil field project.
However, at the time of the decision, crude oil cost less than $70 a barrel. Due to the volatility of the situation in Ukraine sparking fears that Russian oil will be shunned or cut off, oil costs have subsequently doubled at times, and have consistently been over $100 a barrel.
Shell has yet to sell its interests in the oil field and, according to sources cited by the BBC, the company’s position on the matter has not changed but it acknowledged the economic, political and regulatory environment had changed enormously since the decision was announced just three months ago.
Plans to get the Jackdaw gas field back on track
News that Shell could re-enter the Cambo oil field project follows the company’s unveiling of plans to get its rejected Jackdaw gas field in the North Sea back on track.
The energy giant was prohibited by the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), to progress with the project in October last year on environmental grounds. However, Shell has submitted a new Jackdaw plan, which, according to the company, could account for 6.5% of UK gas at its peak. It aims for the gas field to be in production in late 2025.
Shell claims that it has modified the chemical procedures involved in the extraction of gas to meet regulatory requirements.
In February 2021, Shell announced new emissions goals as part of its aim to be net-zero by 2050. The company’s website proudly states: “Shell’s target is to become a net-zero emissions energy business by 2050, in step with society’s progress in achieving the goal of the UN Paris Agreement on climate change.”
As a consequence of the oil giant’s efforts to get fossil fuel extraction back on track, climate activists warn that such reversals will hinder emission reduction targets.
Mark van Baal, founder of Follow This, a non-profit that unites activist shareholders in order to combat climate change from within the fossil fuel industry, warns that going ahead with the Cambo oil field would violate guidance by the International Energy Agency (IEA) that the development of new gas and oil must immediately stop if we are to achieve the target set by the UN climate talks in Paris in 2015 of limiting global heating to 1.5C.
“Any new fields will be stranded if we are to meet the Paris climate targets,” said van Baal, adding, “We know this is a response to the Ukraine war. The only good response to the Ukraine war is to replace Russian fossil fuels with renewables.”
Oil extracted from Cambo would be unusable in Britain
Philip Evans of Greenpeace noted how the type of oil that would be extracted from Cambo could not be used in the UK, rendering the project ineffective in tackling the soaring cost of energy UK households are facing.
“Shell wasn’t interested in pursuing this project when it was a bad look for them”, but if they were to restart Cambo now they would “stand to gain billions in the midst of wartime price hikes,” said Evans.
Concerns shared by Tessa Khan of the climate group Uplift, who told Good Morning Scotland: “It’s obvious that Shell has seen an opportunity in the increased oil price to perhaps make a profit.
“But the reasons not to support Cambo – the fact that it’s not going to lower energy bills in the UK, it’s not going to help us meet domestic energy demand because its oil will be exported to international markets and of course the massive climate impact it will have.
“None of those things have changed. So the case against opening up Cambo remains stronger than ever.”
Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward
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