Report: Oil price crash stalls more than $100bn of fossil fuel investment
Research on behalf of the Financial Times shows oil majors have shelved or delayed 26 schemes, including nine tar sands projects
By Jessica Shankleman | 19 May 2015
Tar sands in Canada
Oil majors have put more than $100bn of investment in new projects on ice in response to the plunge in oil price, new analysis by consultancy Rystad Energy revealed today.
The study, commissioned by The Financial Times, shows that 26 projects in 13 countries have been delayed or axed since oil prices started to tumble last year, including nine Canadian tar sands schemes.
The revelation follows warnings from analysts such as the Carbon Tracker Initiative that capital and carbon intensive projects such as tar sands developments and deep sea drilling operations will struggle to turn a profit if oil prices remain low.
The price of oil crashed to $45 per barrel in January from a high of $115 in June 2014 as a result of surging output of US shale oil and lower than expected demand in Asia. The downward trend in prices was further accelerated by the decision of the Organization of the Petroleum Exporting Countries (Opec), led by Saudi Arabia, to resist calls for it to curb supplies in a bid to protect prices.
As a result, companies such as Royal Dutch Shell, BP and Statoil have been forced to shelve some of their costlier projects.
The analysis shows that at least $118bn of investment has been hit, which is likely to delay future production by as much as 1.5 million barrels per day. This in turn could lead to a substantial rebound in the price of oil, said Rystad.
The report follows a series of studies that have warned capital intensive fossil fuel projects could become stranded assets if the transition to a low carbon economy leads to tighter environmental regulations and reduced demand for fossil fuels.
The findings come after a report from the Institute for Energy Economics and Financial Analysis (IEEFA) yesterday showed how coal company stock prices have collapsed in recent years, concluding that the industry now faces a “grim outlook” as a result of tightening environmental legislation and increasing stranded asset risks.
Environmentalists say Harper administration has little chance of meeting the 2030 goal while tar sands expansion continues
By Will Nichols, 19 May 2015
Tar sands in Canada
Canada has pledged to tackle its rising carbon emissions, but environmentalists have claimed the goal is unattainable while the country continues to exploit its tar sands oil reserves.
Environment Minister Leona Aglukkaq announced late last week Canada would aim to reduce its greenhouse gas emissions by 30 per cent below 2005 levels by 2030, as part of the country’s contribution to a global carbon reduction deal that is set to be signed at the UN climate conference in Paris later this year.
The commitment falls short of the US pledge to cut emissions up to 28 per cent against 2005 levels by 2025 and the EU goal of 40 per cent emissions reductions below 1990 levels by 2030.
However, the country’s government insisted the pledge was “in line” with other major industrialised countries.
“This target is fair and ambitious, an ambitious commitment based on our national circumstances, which includes a growing population, a diversified growing economy and Canada’s position as a world leader in clean electricity generation,” Aglukkaq said.
“Achieving this ambitious goal will require actions from all levels of government and we will continue to work together, cooperatively with the provinces and the territories’ goals.”
Canada’s greenhouse gas emissions have risen steadily since 2009, when it joined the US in pledging 17 per cent reductions by 2020, mainly due to growth in tar sands oil production in the province of Alberta. Currently, Canada is only expected to get halfway to the 17 per cent goal, with Alberta alone expected to account for 40 per cent of the country’s carbon pollution by the end of the decade.
Environmentalists said that without scaling back its long-standing plans to expand tar sands production it is difficult to see how Canada will meet the new emissions goal, even given that provinces such as Ontario have announced targets far in excess of the Federal goal.
“The Harper government has not only ignored its existing reduction target, but the pro-tar sands policies it has adopted are taking us in the opposite direction,” said Keith Stewart, climate campaigner for Greenpeace Canada. “Until today’s announcement is backed by a commitment to enacting policies that can actually achieve this new target, it isn’t worth the paper it is written on.”
Canada follows the US, EU, Russia, Mexico, Switzerland, Norway, Gabon, Liechtenstein, and Andorra in officially submitting its climate action plan, or Intended National Determined Contributions in the UN parlance, to the body’s climate change secretariat in readiness for December’s Paris Summit.
Riverkeeper sues U.S. DOT over oil train safety rules
By Brian Nearing, May 18, 2015
The Hudson River environmental advocacy group Riverkeeper is challenging new U.S. Department of Transportation crude-by-rail standards in federal court, saying that they fail to protect the public and the environment from proven threats, according to a statement issued Monday.
The release states: Riverkeeper filed its lawsuit in the 2nd Circuit Court of Appeals in New York City on May 15, a little more than a week after the DOT issued a final tank car and railroad operation rule which had been the subject of scrutiny and controversy since its proposal in 2014. The suit closely follows another filed in the 9th Circuit Court of Appeals by a coalition of conservation and citizen groups that includes Earthjustice, Waterkeeper Alliance, ForestEthics and the Sierra Club.
The Hudson River and the Greater New York/New Jersey region, a thoroughfare for up to 25 percent of all crude shipments originating in the Bakken shale oil region, faces a daily risk of spills and explosions that could devastate communities, local economies, drinking water security, and the environment.
“These seriously flawed standards all but guarantee that there will be more explosive derailments, leaving people and the environment at grave risk,” Riverkeeper President Paul Gallay said. “The shortcomings are numerous, including an inadequate speed limit, unprotective tank car design, and time line that would allow these dangerous tank cars 10 more years on the rails. The DOT completely fails to recognize that we’re in the middle of a crisis – we don’t need bureaucratic half measures that are years away from implementation, we need common-sense protections today.”
Just this month, tank cars laden with crude oil derailed and exploded in Heimdal, North Dakota. Under the new DOT standards, the same type of cars that exploded in that disaster could stay in service hauling volatile crude oil for another five to eight years, or even indefinitely if they are used for tar sands.
Over the past several years, a series of fiery derailments, toxic spills, and explosions involving volatile crude and ethanol rail transport has caused billions in damages across North America. Crude-by-rail accidents threaten irreversible damage to waterways, many of which, like the Hudson River, serve as the source of drinking water for tens of thousands of people. This year alone,six oil-by-rail shipments have caught fire and exploded in North America. In July 2013, a derailment in Lac-Mégantic, Quebec, killed 47 people. The total liabilities for that rail disaster could easily reach $2.7 billion over the next decade.
Here are some of the ways the new safety standards fail to protect people and the environment:
• Hazardous cars carrying volatile crude oil can remain in service for up to 10 years.
• The rule rolls back public notification requirements, leaving communities and first responders in the dark about explosive crude oil tank cars rumbling through their towns.
• While new tank cars will require thicker shells to mitigate punctures and leaks, retrofit tank cars will be allowed to stay in use with a less protective design standard.
• Speed limits have been restricted only for “high threat urban areas,” but only two areas in New York have received that designation, Buffalo and New York City.
• The “high threat” category relates to cities seen as vulnerable to terrorist attacks by the Department of Homeland Security. It is unrelated to actual risks posed by crude-by-rail.
Whistleblowing Alberta oil sands doctor fired abruptly
By Warren Bell in Opinion | May 11th 2015
Photo by Andrew S. Wright of Dr. John O’Connor in Ft. McKay medical centre
My friend and colleague Dr. John O’Connor has just been fired, without cause, and without advance notice.
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After 15 years of committed service, his termination came on May 8 without the slightest warning.
“Please be advised that Nunee Health Board Society no longer requires your professional services to provide any patient consultation or on-call services to the staff at the Fort Chipewyan Health Center.”
And just in case that wasn’t hard-edged enough:
“In addition, you have no authority to speak to or represent the Nunee Health Board Society in any way to any other individual, party or entity (sic)”
So hastily was this letter of dismissal sent to Dr. John O’Connor, on-call family physician for the 1200 citizens of the remote community of Fort Chipewyan, that there was no date on the top of the letter, and not even a period at the end of one of the sentences.
Even more peculiar – and suggestive of behind-the-scene machinations – the letter carelessly contained a request that he submit invoices by April 30 for services not already compensated.
The letter, from Roxanne Marcel, chairperson of the Nunee Health Board Society, came as an attachment to one-line email sent to him last Friday by Caroline Adam, health director of the same body. O’Connor said neither has responded to his repeated attempts to contact them.
A few hours before he was fired, Dr. O’Connor said he had spoken to two medical colleagues associated with the community, who made no mention of any plans to replace him. Shortly after, he received the notice of termination.
Then he received an email thread indicating that plans to replace him had already been established, prior to his conversation with his two colleagues.
This extraordinary sequence of events has all the hallmarks of a politically motivated drama.
That’s because John O’Connor is no ordinary family physician. Twelve years ago, he diagnosed an unusual number of cancers of the bile duct in the tiny northern hamlet of Fort Chipewyan, located downstream of the oil sands. The condition is familiar to Dr. O’Connor because his own father died from this same illness in 1993.
He also noted higher-than-average rates of other kinds of diseases, as well as persistent reports from local hunters and fishermen of unpleasant changes in the wildlife in the region – such as dead and disappearing muskrat, and fishes with strange deformities. He wondered if these circumstances had to do with the pollution from the oil sands companies.
Dr. John O’Connor’s data was challenged by Health Canada and public health officials in Alberta, and he was threatened with loss of his license because he had raised “undue alarm”.
Eventually he was cleared of all charges and complaints, but the process, which took several years to resolve, changed him forever.
Last year he told Desmog Canada that he emerged a “much tougher person.”
Nothing, however, prepared this family physician for what happened a couple of days ago.
“I am at a huge loss to explain this,” he said. “I feel like I’ve lost a family member.”
The timing of his abrupt dismissal is curious. About three weeks ago, renowned physician Dr. Esther Tailfeathers, who had been spending a week every month in Fort Chipewyan for the last three years, suddenly ended her service, without explaining why to the staff at the nursing station where she worked.
In a long article published in the Edmonton Journal on March 29, she had commented that “it is really difficult to keep nurses in the community and it is certainly hard to recruit physicians.
Dr. Tailfeathers was loved and respected in the community. The nurse in charge of the health clinic called her “really amazing”. Her departure was just as mysterious as the abrupt dismissal of Dr. O’Connor.
John O’Connor has been supplying on-call services, 24/7, for 15 years. He has answered calls while traveling in other countries, from holiday locations, and even from the shower, walking nursing and paramedic staff in Fort Chipewyan through challenging medical emergencies whenever they occurred. On a number of occasions over the years, he offered to reduce his fees if the Nunee Health Board Society was having trouble meeting them. In fact, reduced his invoice for August 2014 to February 2015 by 50 per cent at the request of Caroline Adam, the person who sent him the one-line email on May 8.
That a respected First Nation physician would suddenly disappear from the community, and then three weeks later Dr. O’Connor would be abruptly terminated raises important questions as to what is going on behind the scenes.
Whatever the cause of his dismissal, we can all be sure of one thing: Dr. O’Connor, after a decade-long crusade to draw international attention to the health problems of those living downstream of the oil sands, is unlikely disappear quietly.
Aided by his many friends and colleagues, he will undoubtedly discover who is responsible for ushering him out the door, cutting him off from the community he loves, and and continue advocating for the health of that community.
