Shell has only recently taken responsibility for its last oil spill in 2008, which leaked 11 million gallons of crude into the Niger Delta, nearly wiping out entire communities in Nigeria. A class action lawsuit finally prompted Shell to admit they’d spilled approximately 275 times the amount of oil than they’d originally reported. The U.N. estimates the spill will likely take 30 years and $1 billion to clean up. (image: inhabitat.com)

Oil giant Shell has contaminated at least 48 square miles of ocean in the North Sea from its Gannet Alpha platform, DigitalJournal.com reported. The latest estimates put the leak around 100 metric tons or 730 barrels worth. Though Shell operates the Gannet Alpha platform, Exxon Mobil Corp. is also a partner.

Echoing the dishonest rhetoric surrounding the BP Gulf spill, Shell was aware of the spill since last Wednesday but didn’t report it publicly until Friday.

Yesterday BBC Breakfast news reported “a thin film” of oil now covers a “mere” 48 miles of seawater, prompting questions about what constitutes a thin film. Sadly, until now Scotland has been a leader in industries involving eco-conscious, renewable energy sources. Regional scientists recently wrote of their work attempting to change the shape of the world energy map, saying Scotland “can become a world leader in the field of renewable energy, just as Aberdeen has with oil.”

Shell tried to downplay the leak, stating in a press release it is “under control…the flowline on the seabed is now isolated and depressurized. Leakage of oil has been considerably reduced.”

“We have deployed a Remote-Operated Vehicle (ROV) to do inspection checks and monitor the subsea leak which is on a flow line on the sea bed,” Shell spokespeople wrote. “A stand-by vessel remains on station with oil spill response equipment and dispersant.”

However, dispersants themselves are controversial since they’re nonbiodegradable and often comprised of toxic chemicals. While they can effectively dissolve oil slicks, they don’t actually reduce the amount of oil entering the sea and only work when applied within 12-48 hours of an accident.  Dispersants also negatively affect marine life and ecosystems.

On Sunday evening, Shell spokesman Bill Tanner offered an update in an email, stating, “Our current expectation is it will be naturally dispersed through wave action and will not reach shore.”

An oil rig in Russia, which overtook Saudi Arabia as the world's number one oil producer two years ago. (image: tehrantimes.com)

This isn’t breaking news, since the top oil producing countries in the world have the most natural stores of oil and don’t change very often. However, fluctuation in output from any of these countries can affect the heating oil and gas prices that affect our everyday lives. Staying apprised of news and developments in these nations, from political upheaval to the discovery of new supplies, could be useful to heating oil consumers. So, here’s a refresher:

1. Russia produces 9.5 million barrels of oil every day. That’s around 12% of the world’s oil. Though they export slightly less oil than Saudi Arabia, fuel enthusiasts might be interested to know Russia is also the world’s largest exporter of natural gas.

2. Saudi Arabia produces 8.3 million barrels each day. The country contains approximately 100 major oil and gas fields, and is the world’s top oil exporter.

3. The United States is better known as the world’s number one consumer of oil, but the country also produces 5.4 million barrels a day. The U.S. is still struggling in the aftermath of the devastating BP oil spill off the Gulf Coast.

4. Iran produces 4 million barrels of oil a day, almost 4% of the world’s oil. Iran’s controversial nuclear program has been a source of concern for several countries, but they maintain the goal is to generate electricity with low-enriched uranium.

5. China produces 3.8 million barrels of oil every day. But, like the United States, they don’t even make the list of top 20 oil exporters and also experienced a catastrophic oil spill last year when a pipeline exploded.

6. Mexico produces 2.6 million barrels of oil each day. The country is still doing damage control from last year’s pipeline explosion that killed 13 children in San Martin Texmelucan.

7. Canada also produces 2.6 million barrels a day. Exportation could increase with the country’s development of tar sand extraction, but so far environmental concerns have prevented U.S. lawmakers from approving a huge pipeline from Canada to the Gulf Coast.

8. The United Arab Emirates produce 2.4 million barrels of oil daily, though they have the sixth largest oil reserves in the world. Climatically sunny, UAE is said to be looking into developing renewable energy sources, especially solar power.

9. Iraq produces 2.4 million barrels every day. The unofficial birthplace of OPEC, Iran continued to help meet world oil demands despite years of war, upheaval and sanctions.

10. Kuwait produces 2.4 million barrels of oil a day. The country has the fifth largest oil reserves in the world, which started being discovered and explored in the late 1930s.

Obama at the G-20 Summit. (image: dailyadvance.com)

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When President Barack Obama spoke in front of the United Nations global warming summit and promised to “work with my colleagues at the G-20 to phase out fossil fuel subsidies so that we can better address our climate challenge,” his proposal was alternately applauded and condemned. “It’s a great idea,” said Frank O’Donnell, the president of Clean Air Watch. “Wrong-headed,” said Jack Gerard, president of the American Petroleum Institute.

Observers of the politics of climate change are not surprised by such starkly opposed points of view. The confluence of the UN Summit on Climate Change (September 22), the G-20 Pittsburgh Summit (September 24–25), and the United Nations Climate Change Conference in Copenhagen (December 7–18) has made late 2009 a pivotal moment for the international community to shape environmental and energy policy, and both environmental groups and the fossil fuel industry have been preparing for it.

Global actors like the Organization for Economic Cooperation and Development (OECD), the United Nations Environment Program (UNEP), and the International Energy Agency (IEA) have all chosen to weigh in on climate change at this moment. It all builds to the Copenhagen conference in December, which now appears to be the precursor to an informal agreement on emissions reductions goals rather than a legally binding treaty.

While no mainstream voices bother to deny the powerful effect that greenhouse gas emissions have on climate change, the policy debates over the best means of reducing greenhouse gas are vigorous. Cap and trade has garnered the most attention out of the policy tools aimed at combating emissions, especially in the United States since the Waxman-Markey bill passed the House in June and the Senate debates its own cap and trade proposal. But the biggest incentive for emitters may not be the absence of a limit—it may be that the government subsidizes those emissions.

Iraqi oil workers at Beji refinery outside of Baghdad. (image: wn.com)

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History of Iraq’s Oil Industry

Discovery of oil in 1908 at Masjid-i Suleiman in Iran led to a subsequent search in Mesopotamia (later named Iraq by British mandate). When the Ottoman Empire (of which Mesopotamia had been a part since 1534) collapsed in the early 20th Century, Western powers jumped at the chance to become involved in the economic affairs of the region and gain access to its oil.

Foreign geologists visited Mosul (the northern province) disguised as archeologists. The Turkish Petroleum Company, TPC, (created to exploit oil in Mosul) was a joint English-German-Dutch venture, and despite its name did not include Turkish participation. During WWI, Britain converted its navy from coal to oil fuel, increasing the importance of Iraq’s oil on the world stage, and leading to Britain’s capture of Basra (1914), Baghdad (1917) and Mosul (1918). In 1916, the secret Sykes-Picot act partitioned the Ottoman Empire, assigning Baghdad and Basra to the British, and what is now known as Syria to the French. Post WWI, German interests in the area were confiscated by the British.

Also after WWI, American interests entered the scene in Iraq, as the US pursued a position of equal access for their capital and interests in what were previously English and French “zones of influence.” The American State Department supported American oil companies after experiencing fuel shortages and price increases during the Great War, and withheld support from agreements that effectively stonewalled American efforts to enter the Iraqi oil market. Though WWI ended in 1918, it was only in 1922 that a provisional agreement was reached to allow an American presence in the TPC. In 1924, the American oil syndicate (called the Near-East Development Company) acquired partial ownership of TPC, and America gained a foothold in Iraq.

During the Lausanne Peace Conference (1922-23), politics and oil mixed to determine whether Mosul belonged to Turkey, or whether it was part of the newly created Iraq. Britain’s voice was Lord Curzon, the British Foreign minister and head of the British delegation, and his statements regarding the status of Mosul stretched the truth. He claimed that England’s policies in Iraq had nothing to do with oil, but rather with protecting the interests of the Iraqi people. Though the hypocrisy involved in Lord Curzon’s statements was well documented, Britain (through diplomacy and veiled threats of renewed hostilities in Iraq) eventually managed to put the question before the League of Nations for arbitration. To no one’s surprise, the League of Nations (where the British Sir Eric Drummond held the position of General Secretary) ruled in favor of Britain.

With Mosul part of British-created Iraq, teams of geologists flooded the region. Oil was struck at Baba Gurgur in October 1927. The field was found to have reserves of 16 billion barrels, fulfilling the high hopes of the TPC partners. In 1929, TPC changed its name to Iraq Petroleum Company. The IPC managed to maintain a monopoly on Iraq’s oil supply until conflicts with the Iraqi government over oil development and profits led to nationalization. Nationalization of the oil industry occurred in 1972, with the Soviet Union supplying funds for oil expansion in North Rumalia.

Following nationalization, Iraq made a major effort to increase oil production capacity and exploration, as well as build new refining infrastructure. There was also a push in establishing petrochemical and other downstream industries, and a focus on nationwide aptitude in all aspects of the industry. The change in the industry was immediate—in 50 years of control of Iraq’s crude oil production, foreign oil companies had never made efforts to create any in-country refining capacity. Further, foreign investors had withheld technological information from locals and had ignored local downstream oil-based industry. Post-nationalization, Iraq’s oil output increased from 2 million barrels per day in 1973 to 3.6 million barrels per day in 1979. This output (in the midst of the 1979 energy crisis) marks the peak of Iraqi oil production. Investment in all areas of the oil industry showed substantial results, and Iraq was well on its way to becoming an oil producer on the national stage and achieving a stature that matched its substantial reserves.

Copenhagen UN Climate Change Conference 2009 COP 15 logo. (image: en.cop15.dk)

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From Kyoto to Copenhagen

Debate over climate change legislation in the United States rages on, and even the Obama administration has conceded that a climate bill will not be finalized until 2010. However, a more important agreement on climate change could take place before the year’s end: a new carbon emissions treaty—a successor to the Kyoto Protocol—is the aim of the Copenhagen conference this December.

December 7 marks the opening day of the United Nations Climate Change Conference in Copenhagen. The conference is typically referred to as simply “Copenhagen” or abbreviated as “COP15,” which doesn’t stand for “Copenhagen” but for the fifteenth meeting of the “Conference of the Parties” to the UN Framework for Climate Change. The lofty goal of the conference, which closes on December 18, is to set new global standards to combat climate change, standards which can be adopted by superpowers like the US, as well as emerging economies like the fast-growing industrial nations of India and China.

The event will bring to the table virtually every country on the planet—192 countries are expected to be represented—making for, as the Independent’s environment editor Michael McCarthy estimated, roughly 10,000 to 15,000 advisors, diplomats, policymakers, and members of the media.

The Kyoto conference, 1997. (image: mofa.go.jp)

The Copenhagen conference is the biggest climate change meeting since the Kyoto Protocol, and has been preceded by a number of conferences that tried to build a foundation for agreement at Copenhagen. As the Kyoto Protocol is due to expire, Copenhagen offers the opportunity for a global climate change treaty to succeed Kyoto. As many onlookers have noted, much is at stake.

McCarthy, who’s been writing a series about the build-up to the summit for the Independent, said the conference “will have a far broader reach and potential impact on the world” than some of the most significant international political gatherings in history. He cited antecedents such as the 1814-1815 Congress of Vienna (which redrew the map in the wake of the Napoleonic Wars) and the 1945 Potsdam and Yalta conferences (which redrew the map in the wake of World War II). Those conferences, McCarthy elaborated, dealt with political structures and national borders, which change over time and can disappear entirely (Kingdom of Piedmont, anyone?). The issue at hand at Copenhagen is “something fundamental to life on earth: the stability of the biosphere.”

To maintain the stability of the biosphere, the Copenhagen conference intends to update the emissions standards set at the Kyoto conference. Kyoto, which took place in 1997, set emissions standards for nations that signed and ratified the Protocol. Each signatory agreed to reduce its greenhouse gas emissions by 5.2% from the levels emissions were at in 1990. The pact was initially adopted by 37 nations but was famously (or infamously) never ratified by the US. (As of October 2009, the Protocol has been ratified by 184 countries.)

Despite Al Gore’s support, the Kyoto Protocol failed to win approval from US Senate, due to its lack of restrictions for developing nations—a hurdle still current. (image: biocrawler.com)

That the US never ratified the treaty that Al Gore signed in Kyoto has become a looming problem as Copenhagen fast approaches. In early October the press reported that the US was refusing to include any Kyoto Protocol targets on carbon dioxide emissions in any agreement reached at Copenhagen, because the Kyoto pact doesn’t include restrictions on developing nations.

Because of this history—the US as a champion of ideas that failed to put them into action–one of the biggest concerns many nations have about Copenhagen is that the US has not been able to pass strong climate change legislation of its own.

With a number of politicians in the US warning that significant climate change legislation might not get passed until 2010—well after Copenhagen has happened—concerns about the global ramifications of domestic policy talks are mounting. As Anne Petsonk, international counsel for the Environmental Defense Fund, told the New York Times, the bottleneck here is sending a bad signal to the world. “The appearance to the international community,” she told the paper, “would be that the U.S. Congress is just adrift.”

The US Climate Bill

Which begs the question: Why is President Obama’s climate bill meeting with such opposition in Congress? (see video below: Senator Voinovich clashes with Senator Boxer over the Kerry-Boxer cap and trade bill.)

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Economic concerns trump environmental worries among opponents of climate legislation. Senators on both sides of the aisle have reservations about the climate bill. Whether their constituents face unemployment or high energy bills, legislators are loath to add to economic difficulties in their home states.

Additionally, big business is bringing out the big guns in Washington, lobbying hard to halt legislation they see as potentially harmful to the bottom line. Two such opponents of the climate bill are the Chamber of Commerce and the oil industry.

The Chamber of Commerce, which pushes a wide-ranging agenda, recently came under fire for putting significant funds toward defeating the climate bill. Companies like Nike, Apple, and Exelon Corporation have even left the organization, citing the Chamber’s stance on climate change as the reason.

Reporting on the Chamber’s hefty lobbying budget—and its efforts to stymie the climate change bill in Washington—the AP cited the stance of an executive from the Mohawk Fine Paper company, also a recent Chamber defector, who said it adversely affected the company’s credibility to “belong to an organization that vigorously opposed action on climate change.”

Another powerful corporate interest slowing climate change legislation in Washington comes from the oil industry. According to Capitol Hill publication Roll Call, oil companies were among the top spenders on lobbying in the third quarter of 2009. The American Petroleum Institute, which represents oil companies, shelled out $2.2 million on lobbying in the third quarter, up from $1.8 million over the three prior months, while ConocoPhillips spent nearly $4 million all on its own during the same period.

While some politicians claim that the fate of Copenhagen doesn’t hinge on the US passing climate change legislation—California Senator Barbara Boxer has come out publicly with this sentiment—many are wary. As the New York Times reported, those in the Boxer camp believe “that no agreement is better than a bad deal that cannot be ratified or endorsed.”

Who Picks Up the Tab?

The other obstacle at the Copenhagen conference will be who pays for any changes that come out of the climate conference. Aside from questions about whether the US will set an example for other countries to follow, there is the greater issue of how the economic impact of any potential global emissions plan will be met. As Elisabeth Rosenthal noted in a Times piece on the topic, the cost of an accord coming out of Copenhagen could be as much as $100 billion by the year 2020, with some economists estimating that costs will be closer to $1 trillion. That money is needed to help fast-industrializing nations convert to cleaner energy technology as well as help developing nations combat the natural disasters—droughts and famine, among other possibilities—resulting from climate change.

The support of developing nations like India, whose carbon emissions are rapidly increasing, is key to the success of any climate treaty. (image: article.wn.com)

Although companies ranging from Starbucks to Nike have noted that there’s more than an altruistic reason to assist third world countries suffering from the effects of global warming—natural disasters in these developing nations, after all, affect the flow of goods like coffee beans and cotton—the question of where the money comes from to support global efforts to combat climate change is still murky.

While Rosenthal noted that industrialized nations like the US have agreed in theory that any agreement coming out of Copenhagen will be financially underwritten by them, the lack of a clearly outlined plan is a major concern. “To date” she writes, “there is no concrete strategy to raise such huge sums. There is not even agreement about which nations should pay or in what proportion.”

Who will be underwriting the bill is, as Rosenthal aptly points out, the thing to watch: “Should contributors be only the industrialized nations, or should they include rapidly developing—and increasingly wealthy—polluters like China?”

Oil rigs dominate the view from Angola's beaches. (image: eiuenergy.wordpress.com)

by Nick Malinowski
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Large Potential, Large Problems

A potential economic powerhouse in Africa, Angola has surpassed Nigeria and become the continent’s biggest oil producer. The country benefits from billions of dollars in foreign development investments and relative political stability as the country emerges from the brutal chaos of its 27-year civil war, which ended nearly eight years ago, but corruption and inequality restrict these benefits to the privileged few. The Sub-Saharan African nation shipped out nearly 2 million barrels of crude a day in October 2009, and that capacity is continuing to expand as more and more international oil firms vie for offshore production blocks, turning their attention from Nigeria, whose oil industry faces attacks from militant groups, to the highly speculative deepwater wells off the Angolan coast.

Some analysts have suggested that by 2011 Angola’s petroleum exports will rival Kuwait’s at about 2.6 million barrels a day; production has nearly tripled since 1997. The United States and China, among other foreign powers, have pumped resources into the former Portuguese colony to promote the efforts of their respective energy companies, yet most of the Angolan population still lives on less than two US dollars a day and the country remains near the bottom of nearly all development indicators. However, oil companies and governments worldwide have been buying in to the promise that Angola could be one of the last great untapped petroleum resource regions of the world.

Angola boasts rich deepwater petroleum and natural gas reserves, although onshore resources remain largely unexplored due to the political instability in the wake of the civil war. Oil production has increased ten-fold since the 1970s, propelled by discoveries that reach as far as 100 miles from the coast. Roughly three times the size of California, Angola boasts 9.5 billion barrels of proven petroleum reserves along with 272 billion cubic meters of natural gas reserves. It has the fourth most oil reserves of any country in Africa behind Libya (43.6 billion barrels), Nigeria (36.2 billion barrels), and Algeria (12.2 billion barrels). Though Angola’s reserves pale in comparison to these nations, it has bloomed into a key player in Africa’s oil industry and its top producer primarily by leaning heavily on its top two customers: the United States and China, which consume more than 90 percent of its output.