Shell Oil Claims to Stop One Leak (U.K.), While Others Erupt (Nigeria)
No one should feel sorry for Royal Dutch Shell. Thanks to high prices due to continued upset in the Middle East, its profits in the second quarter of 2011 were up 77 percent over the previous year's, while it continues to siphon 3.1 billion barrels of oil per day out of the Earth in more than 90 countries. Still, it’s been a trying week for the Netherlands-based company.
Just as it seemed to stem a leak in the North Sea—the worst oil spill in U.K. waters in the past decade, which it managed to keep quiet for several days after the leak began—in Nigeria, things couldn’t be going worse for the public company: Over the weekend a pipeline exploded along the Okordia-Rumuekpe Trunkline and is still spilling untold amounts of oil. That came on top of last week’s news of a victorious class-action suit against the company that requires it to spend $500 million to clean up two giant spills going back to 2008 and 2009—which could take the next 30 years.
Given those environmental success stories, the bright light for the company last week was the tentative approval it was granted by the Obama Administration to drill exploratory wells off the coast of Alaska next summer.
Who we should feel sorry for are the people of Nigeria, Africa’s largest oil producer. The country is an environmental basket case thanks to companies like Shell, which first discovered oil there in 1956. (Before it was forced by the courts to clean up the 2008/2009 spills, the company tried to buy locals off with a little bit of cash and bags of rice and beans.) The first Shell well opened more than 50 years ago and the country’s rich oil resource has subsequently been abused. Since 1989 there have been more than 7,000 spills in Nigeria, dumping twice as much crude as was spilled during last year’s Gulf of Mexico spill.
As a result, land and water are horribly polluted. Massive amounts of fish have died off, ground water is polluted, and a high incidence of cancer is reported among the impacted area's population. Shell—and the other oil companies operating in Nigeria—pays lip service to cleaning up the messes they make, but clearly it takes legal judgment to get them to truly act. And even that isn’t always a cure.
The lack of moral company leadership and a strong legal and enforcement system has simultaneously allowed a lucrative black market and, recently, piracy to boom. The Okordia-Rumuekpe spill this past weekend is thought to have been started by a saboteur attempting to disrupt the company’s business. Violence and kidnappings have been commonplace in the region for years. One estimate has 100,000 barrels of oil a day—10 percent of Nigeria’s output—being stolen every day.
It's thought that piracy in the Atlantic’s Gulf of Guinea could soon rival that off the coast of Somalia, thanks in part to all the oil leaving the docks in Lagos. In the past eight months there has been an increase from low-level robberies to hijackings, cargo seizures and major holdups off the coast of Nigeria’s commercial capital. Chemical and oil tankers are the main targets along its 530-mile coastline.
In July a Greek oil tanker with 20 crew members, carrying oil from Ghana to Benin, was seized 30 miles off Nigeria’s coast. Pirates in gunboats have recently engaged the Nigerian Navy’s Joint Military Task Force—assembled to diminish attacks against unarmed commercial ships—in gunfights.
While attacks on the big ships get most of the attention, smaller boats are at risk as well. Also in July a fishing trawler was attacked by gun-wielding attackers; the ship’s cook was shot as he lay in his bed and bled to death while the pirates boarded the ship, ate, took naps and stole everything not welded down. In January alone there were 50 attacks on fishing boats, 20 in one week, during which 10 sailors were killed.
If all this seems far away and disconnected to our relatively complacent lives, it shouldn’t be. Why should we care whether Shell and others destroy these distant places while criminal elements wreak havoc? Because it’s likely that the gas you bought at the Shell station this morning came from Nigeria, since one out of five gallons imported into the U.S. originates from there. How do we stop some of the degradation in Nigeria? Like so many oil-related questions, it simply involves using less.