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Juan Cole

Juan Cole

Juan runs the popular geopolitics blog Informed Comment where he provides an independent and informed perspective on Middle Eastern and American politics.

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Shell Spent $4 Billion in Campaign to Open the Arctic for Oil Drilling

Alice Ross writes at The Bureau of Investigative Journalism:

Offshore oil drilling in the Arctic has long been considered off-limits – but as the New York Times revealed . . ., a sustained and ingenious campaign by Shell has overcome all objections.

The campaign to win permission to drill in the Arctic is a masterclass in major-league lobbying: Shell has spent seven years and an incredible $4bn (£2.55bn) to win over opponents at almost every stage, from the local Native Eskimo community, through multiple layers of environmental agencies, all the way to President Obama. It even managed to win permission to drill not long after the Deepwater Horizon oil spill, which involved BP and was one of the worst such incidents in US history.

The granting of Shell’s permits will also spark a new oil rush as more companies seek to join Shell in seeking oil in the Arctic. But many fear that an oil spill in the Arctic could be devastating – particularly as no technique exists for cleaning oil from ice – while the rush of industry into the area risks disturbing local wildlife. The fresh supply of oil will also slow the impetus towards more sustainable energy sources.

New York Times reporters John M Broder and Clifford Krauss unpick Shell’s strategy, describing how the company adopted a two-pronged approach focusing on the local community and on Washington.

While many Eskimos depend on oil and energy for their income – it provides a third of all jobs in the state – they also revere the natural environment and rely on the ocean for much of their food. They have long been concerned that oil drilling would disturb whale migration rates.

On a local level, Shell faced a canny opponent in Edward S Itta, who campaigned for mayor of his town on an anti-drilling platform. He was happy to play to the myth of the mystical Native and what the reporters call the ‘special moral authority’ that Eskimos possess in Congress.

After an ill-advised effort at fielding its own candidate, Shell sent in a right-on executive, Pete Slaiby, who embarked on a charm offensive, sponsoring community meetings, serving food, and gamely eating the local delicacy of raw whale meat. Slaiby also made a series of concessions to Itta’s demands – but at the same time the company was working to isolate him, funding local colleges, village parties and whaling equipment. Itta was eventually forced to accept that drilling was inevitable and negotiated for the best possible deal.

Meanwhile, in Washington Shell took the unusual step of joining an anti-global warming alliance, which gave them access to senior policymakers and helped deflect criticism of the scheme’s impact, says the New York Times.

At the 2008 election the company drew up an action plan for winning over each of the candidates in the event of their victory and retained former politicians who they were close to for an inside line to power – although Obama’s win caught Shell on the hop, as it had assumed Hillary Clinton would be the Democratic candidate.

The report examines the lobbying that has gone on since his win. The company employs ‘three dozen’ staff to lobby government officials, according to government registers, and senior Shell lobbyists have visited the White House at least 19 times during Obama’s administration. This is aside from the constant stream of contact with the agencies that would actually grant the permits.

Click here to read the Bureau’s investigation into lobbying’s hidden influence.

‘I understood they were doing it, I understood why they were doing it, and it wasn’t as subtle as it should have been,’ an official told the New York Times.

Recognising the blunt force power of Shell’s lobbying blitz, environmental groups have backed off according to the paper, choosing to focus on projects where victory is more feasible.

In the end, fuel security and ever-rising oil prices have helped win over President Obama – and while an activist describes the drilling as ‘a reckless gamble we cannot afford’, events such as the Osama bin Laden raid show that Obama, while often cautious, also has a gambling streak.

Barring a major upset, drilling starts in July. As the New York Times points out, ‘It is a moment of major promise and considerable danger.’

By. Professor Juan Cole




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