Shell’s Big Dirty Secret

Shell’s Big Dirty Secret: Insight into the world’s most carbon intensive oil company and the legacy of CEO Jeroen van der Veer
Oil Change International, Friends of the Earth (International, Europe, U.S. and The Netherlands), PLATFORM, and Greenpeace UK
June 2009

Download the full report, Shell’s Big Dirty Secret (PDF)

This new research paper rates the carbon intensity of the top international oil companies, revealing that Shell is now the most carbon intensive oil company in the world based on its total resources.

Royal Dutch Shell plc, commonly known simply as Shell, is a multinational petroleum company. It is the second largest private sector energy corporation in the world. The company’s headquarters are in The Hague, Netherlands, and London, UK. Its largest subsidiary is in the United States.

It is the largest oil operator in Nigeria, and holds more acreage in Canada’s oil sands than any other corporation. Because of these facts, and several others, Shell is also the most carbon intensive oil company in the world. In short, for every barrel of oil it produces in the future, Shell will contribute more to global warming than any other oil company.

This report documents Shell’s record investment in dirty forms of energy, and it illuminates the corporate strategy and lobbying for regulations that indicate it intends to profit from that position for a long time to come.

Our key conclusions are:

Shell holds more carbon in its resources, per barrel of future oil equivalent, than any other major international oil company. Shell is therefore the world’s most carbon intensive oil company;
The average carbon intensity of each barrel of oil and gas Shell produces is set to rise dramatically, increasing 85 per cent on today’s figure;
This sharp increase is caused by Shell’s move into oil sands, its reliance on liquefied natural gas (LNG) and its continued gas flaring in Nigeria;
Shell continues to expand investments in oil sands and oil shale, relying on the dirtiest technologies to establish itself as a leader in the industry;
Shell has stopped its investments in renewables, except for biofuels, which pose a whole new set of environmental problems;
Internal documents obtained in the discovery process of Wiwa v. Shell reveal that although Shell could have ended gas flaring in the early ‘90’s, it decided it was more profitable not to;
Shell continues to flare gas in Nigeria at levels which, according to its own figures, are only 12% less than those of 1999 after accounting for the reductions due to community unrest;
Because of all of the above, Shell is more vulnerable to carbon pricing and subject to greater carbon risk than its peers.
Therefore, Shell is leading industry lobby efforts in Washington, Brussels, and the United Nations Framework Convention on Climate Change to weaken and neuter legislation and regulation to tackle climate change;

This systematic approach reflects what Shell’s one overriding priority is – profit and the maximization of value to its shareholders. This is not a crime. Far from it, this is the essence of management’s fiduciary duty.

But a strict interpretation of profit maximization can lead to massive and costly mistakes, as has happened in Nigeria with gas flaring – and as is happening now globally with climate change.