Unconventional oil sources 'threaten environment'
The search for unconventional oil could harm the environment, report claims
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Tuesday, 29, Jul 2008 12:52
Using unconventional fuel sources such as oil sands or oil shale could have "catastrophic" effects on the environment, a report warned today.
The sources have been viewed as an attractive option due to the rising price of oil but the WWF and the Co-operative Financial Services (CFS) say investing in them is both environmentally and economically unsustainable.
Their report claims that if all 1.1 trillion barrels of potentially extractable North American unconventional oils were exploited within the next century, it would result in atmospheric carbon dioxide (CO2) levels of between 49 and 65 parts per million.
This could result in climate change being accelerated to levels that would threaten a mass species extinction.
Unconventional oil is extracted from tar-soaked shale or sand and creates up to eight times as many emissions as conventional oil production does.
WWf and CFS claim that more than US$125 billion (£63 billion) of unconventional oil projects have been announced for development by 2015.
In addition to investing heavily in the development of US oil shales, the report said Shell has announced an intention to produce 670,000 barrels of oil daily from Canadian oil sand by 2020, while ExxonMobil and BP are also both hoping to produce several hundred thousand barrels each per day.
James Leaton, senior policy officer at WWF-UK, said the environmental and economic costs of using this oil are "unthinkable".
"In addition to the rising cost to consumers and businesses from high oil prices, the environment is paying at both a local and global level," he added.
"The solution is to develop alternatives, such as renewable energy, rather than continue to indulge our addiction to oil."
CFS intends to use the report as the basis of its shareholder engagement with oil companies to try to persuade them away from unconventional oil.
"The extraordinary lengths some oil and gas companies go to in attempting to make these climate-hostile fuels somewhat less so should be re-directed to bringing forward low-carbon energy," said Ian Jones, head of responsible investment at the Co-operative Investments.
"Most oil companies have hardly begun to factor in the externalities that are currently imposed on the environment, yet are rapidly expanding unconventional oil developments in the hope of future technological solutions, subsidies, and favourable government intervention.
"Shareholders should challenge those oil companies that fail to steward investment responsibly."