The hunt for “black gold” has been going strong for decades, and oil companies have invested billions in extracting fossil fuels from every nook and cranny of the globe. Many previously impoverished nations have seen their fortunes improve by embracing Big Oil. But that economic benefit has come at a cost to their environment.
While the Amazon and the Arctic have been seen as a bonanza for oil companies, drilling in those areas hasn’t always turned out to be as profitable as they had hoped. Shell Oil recently made headlines when it pulled out of its Arctic drilling project after sinking around $7 billion into what amounted to a “dry hole.” When former Mobil Oil VP Lou Allstedt looks at Shell’s situation, he sees “a lot of mistakes.”
“That money is pretty well shot,” Allstedt says, “and I think it is probably going to push back drilling in the Arctic for 5 or 10 years. “[Shell is] very good at what they do. If they can blow it that badly, I think it’s going to push things back a number of years.”
That’s got investors worried, not just for Shell, but for the oil industry in general, says Danielle Fugere of the shareholder advocacy group As You Sow. “What’s the cost of the next barrel of oil?” is the question they’re asking. “And so we’re asking companies – does it make sense to invest the next dollar in this type of high cost, high carbon resources, in a world where 80% of the oil or the fossil fuels needs to stay underground?
Concern over global warming is also affecting the political climate in many oil-rich countries, says Fugere. “Should the companies be investing their money there?”
Ecuador is one country whose plentiful reserves of oil, situated below the rainforest, are fueling debate among its citizens. Oil companies, used to being welcomed with open arms, are encountering resistance from indigenous populations who make their home there. They’re being helped in their fight by organizations like Amazon Watch.
“Indigenous peoples are the ones who are leading the way in protecting forests,” says Leila Salazar-Lopez, “and so we’re working with them to protect the world’s remaining forest and keeping fossil fuels in the ground.”
The Ecuadorian government supports plans to drill in the Amazon. But, says Salazar-Lopez, the effort would result in only “about 10 days’ worth of oil. Is that worth it?
“I don’t think it’s worth it, and almost 800,000 people in Ecuador don’t think it’s worth it,” she contends. “And the planet definitely cannot afford for that to happen.”
René Ortiz, Ecuador’s former Oil Minister, believes you can have the best of both worlds. Environmental regulations in Ecuador are “not perfect,” says Ortiz, “but you can make it more perfect. In other words, you can move from these good practices to best practices…best practices is commitment, ethical commitment” to safety and environmental responsibility.
The world hasn’t cured its addiction to oil, Ortiz maintains. “We need the oil industry.”
“There are some places that need to be off limits,” counters Salazar-Lopez. “The reality is, there is no real safe way to drill in the Arctic or the Amazon.” She points to the “toxic legacy” left by companies such as Exxon, whose presence in Ecuador reportedly left “18 billion gallons of wastewater in unlined pits.”
Transitioning off of fossil fuels is imperative, Salazar Lopez contends, and should be done within the next fifteen years. Her organization is taking that message to the upcoming UN Summit on Climate Change.
“We’re not just talking about reducing emissions,” says Salazar-Lopez. “We’re talking about reducing and stopping extraction…We’re building an alliance to keep fossil fuels in the ground from the Arctic to the Amazon, and that’s our message.”