Suzi Gablik – and her vivacious laugh

Amongst the White Oaks and Hickory trees at the headwaters of the New River, the Cardinals are singing. Their brilliant red wings flashing amongst the silver branches and trunks. Spring time in the Blue Ridge Mountains of Appalachia. Suzi Gablik is leaving her body behind.

As breath moves slowly in and out of her lungs, aided by the oxygen machine at her bedside, the Cardinals I can hear singing in the woods beyond the window remind me of her. A brightness of colour that is almost garish. Both female and male birds sing a multiplicity of songs. Suzi is as bold as they are – and loves colour. She too has sung all her life, from the moment she took wing from her mother’s home.

With an unflinchingly independent mind and astounding courage, Suzi has been a blaze of colour throughout her life. Or perhaps more accurately, throughout three lives. For Platform, Suzi’s writing on the function of art, moving away from the art world and art market towards the deeply ecological, the socially just, communing and community has had a major impact on our own evolution, from the 1980s to the present.

Born in 1934 in New York, Suzi was an only child, growing up in a Jewish community living in the shadow of the news of the Holocaust in Europe. By a twist of fate, she went to study at Black Mountain College[1] in North Carolina at the age of 16. At this radical arts institution Suzi found what she called ‘my people.’ The College embodied the spirit of the Bauhaus, heavily influenced by artists Josef and Anni Albers who had emigrated from Nazi Germany in 1933. Here was the flame of the Modern, the energy of experimentation that would drive out all that Fascism embodied.

Tropism #5 – collage by Suzi Gablik – in the collection of Black Mountain College

At 18 Suzi went to Hunter Art College to study painting under the abstract expressionist painter Robert Motherwell. Soon after she became a pupil of Josef Albers at Yale University. At 25 she went by ship to Europe and lived for a year with René Magritte – the Surrealist painter – and Georgette Magritte in Brussels. She wrote a celebrated monograph on Magritte, but due to sexism in the publishing industry, it was 15 years before it came to print. In the 1950s and 60s, she thrived in the New York art scene, exhibiting her powerful collages in a series of one-woman shows, and being at the heart of a social whirl together with dear friends such as artists Jasper Johns and Robert Rauschenberg.

F 111 – by James Rosenquist – shown in the Pop Art exhibition, Hayward Gallery, London 1969

In her early 30s her second life unfolded. She moved to London and began to work as an art critic. Initially she celebrated Modernism, co-curating an overview exhibition of Pop Art[2] in the brand new Hayward Gallery on The South Bank in London. Looking today at the book that accompanied the show, Pop Art comes across as a celebration of the hydrocarbon world, of a  Modern life of petrol and plastics wrapped up in the American dream.

In the mid 1970s the USIS (the US equivalent of the British Council) awarded Suzi the opportunity of lecturing internationally on American Art. She presented Modernism to audiences in Hungary, Nepal, Bangladesh, Sri Lanka, India, Pakistan, Egypt, Jordan, and Turkey. But as she later wrote: ‘in this unexpected encounter with the ‘colonial experience’, I found myself beginning to question the very assumptions I had set out to explain’. It was the beginning of an unravelling that led to her pivotal book, ‘Has Modernism Failed?’ (1984).

This work won her countless enemies who considered her a heretic, but also a swathe of allies who drew inspiration from her call to the idea that art should break out of the dead end of Modernism and turn towards addressing art’s social function and ecological impact. A slim volume, written in Suzi’s clear and direct style, it became a foundational text for many in what became the international movement variously called ‘Social Practice Art’, or ‘Eco-Arts’ or ‘Socially Engaged Arts’.

 

Cover of ‘Has Modernism Failed?’ 1984

Platform came upon this book soon after it was published in 1984, and it felt as if the group had found part of its guiding rationale. By a twist of fate I met Suzi in London around that time. We became very close friends, and she became a staunch ally to Platform. She first attended a Platform event – ‘Transformation’ – in 1986 and remained engaged continuously across the decades, later becoming one of the 171 figures in the arts who signed a letter against BP’s[3] sponsorship of Tate in June 2010. She was an inspiring force who surfaced in our work[4] and advocated for Platform.

Her international reputation as the herald of a new ecological art movement, was cemented with her ‘The Reenchantment of Art’ (1991), and countless talks.

Cover of ‘The Reenchantment of Art’ – 1991

She later wrote of her shift:

‘As I saw it my book … was giving voice to what was already ‘in the air’. And what was in the air was a new set of values, concerned with ‘right’ living in an interconnected universe, not differentiated into competing parts, but dependent on cooperative interactions. I sought to create a philosophical framework for artists who affirm this new vision and are putting it into practice – who see themselves as agents of social change.’

However she was not resting on her laurels, but going deeper. Her intense curiosity was leading her into her third life. Her next book, ‘Conversations Before the End of Time’ (1995) is radical in its dialogic form, exploring the depths of the ecological and social crisis manifested through a series of exchanges with artists and thinkers, that dissolves the boundaries between the arts, ecology, racism, class, and capitalism.

Cover of ‘Conversations before the end of time’ – 1995

By the time it was published, Suzi had moved from London back to the USA – to Blacksburg, Virginia. Significantly she chose to live, what she must have realised were the closing acts her life, not in the metropolis of London or New York, but in the soft, ancient mountains of Appalachia, among the woods and the birds, the springs and the creeks. For her it was a lived revolt from the consumerist hydrocarbon realm, a conscious attempt to step back from the world of petrol and plastics.

In her next work ‘Living the Magical Life: An Oracular Adventure’ (2002) Suzi tackled head on the very thought structures of the Modern, and crucially its militant secularism – exploring the role of chance and divination, and the presence of the divine. Although it now seems prescient, in the light of authors such as Vanessa Machado de Oliveira who writes of ‘hospicing Modernity’,[5] twenty years ago Suzi’s book was a step too far for ‘mainstream publishing’. Her lifelong loyal publishers Thames & Hudson would not print this work by one of their most successful writers.

Increasingly Suzi turned down international requests to present her ideas at conferences, but she was not turning away from the world. Far from it. She took to the Internet and wrote a blog on an almost weekly basis. Entitled ‘Virgil Speaks’ [6]her texts grappled with the bitter politics of the Bush Administration and America’s global impacts. As so often, her stance left behind many of the readership of all her earlier works, but brought new readers to her ideas. Suzi’s commitment to addressing contemporary politics and her restless intellect was undaunted. That spirit inspired the gathering of friends that would meet in her house every month to explore the world in conversation.

‘Cardinal’ – by Simone Paterson, close friend of Suzi Gablik in Blacksburg, Virginia

Suzi has next to no blood relatives – one cousin remaining in California – but unconsciously she has created a family of those around the world drawn by her ideas and her exemplar. She is a brilliant mentor and guide, giving so much time and care to many who have felt truly ‘seen’ by her.

Suzi died on Saturday 7th May 2022, but her spirit has not passed. It continues to sing like the bold Cardinals she loved, flashing red in the woods, leading us through the thickets, provoking us to live lives of truthfulness and courage, coupled with moderation and attention. Thank you, Suzi, for all that you have given and continue to give.

*

This piece was inspired by many conversations and would not have been possible without the presence of so many, especially Jane Trowell, Traci Burke, Hersha Evans, Betty Fine, Kristel Fuhrman, Dan Gretton, Elizabeth Indianos, Tacie Jones, Jay Jordan, Ray Kass, Hector Leonardi, Brad McCallum, Martha Repass, Ann Roberts, Hakuin Rose, Simone Paterson, Robin Scully, Fern Shaffer, Fern Smith, Bailey van Hook, Bob Walker and Clare Whistler.

Endnotes:
  1. Black Mountain College: https://www.blackmountaincollege.org/history/
  2. Pop Art: https://www.youtube.com/watch?v=uKWOnm0ung4
  3. 171 figures in the arts who signed a letter against BP’s: https://platformlondon.org/p-pressreleases/unprecedented-coalition-from-the-arts-condemns-bp-sponsorship-of-the-tate/
  4. who surfaced in our work: https://platformlondon.org/2017/04/29/conversations-with-suzi-gablik-living-in-wartime/
  5. hospicing Modernity’,: https://www.penguinrandomhouse.com/books/675703/hospicing-modernity-by-vanessa-machado-de-oliveira/
  6. ‘Virgil Speaks’ : http://virgilspeaks.blogspot.com/

Police remove Just Stop Oil activists from the top of an oil tanker, Chiswick, London 15th April 2022

At 8.25 on Friday 15th April, as the rush hour traffic poured off the M4 at Chiswick, four activists stepped out in front of an Eddie Stobart oil tanker. Two held up a banner declaring ‘Just Stop Oil’ whilst two others disabled the braking system and clambered up onto the back of the tanker. Passing drivers hurled abuse and soon the police were forced to close the interchange. In a statement to the press, Just Stop Oil[1] declared they aimed “to stop the flow of oil in London”[1][2].

This was the fifteenth day of direct actions against oil distribution terminals in the South East and the Midlands taken in a determined attempt to shut down the supply of petrol and diesel to the gas stations of the metropolis. Initially eleven terminals has been targeted, though soon action focused on two in the Thames Estuary, another in West London and two in the Midlands.

At these latter pair, the Inter terminal at Grays and the Navigator terminal[3] at West Thurrock – situated either side of the M25 as it crosses Dartford Bridge – protests had been intense and unrelenting. Several activists had climbed the fences of the Navigator depot and locked onto the fuel pumps within. Others had dug a tunnel under the entrance road. Still others had blockaded the roundabout close to the entrance. The Essex Police – assisted by officers drafted in from as far away as Wales – had made over four hundred arrests.

At five to midnight on Wednesday, in an event surely related, forty police officers had raided the London Action Resource Center in Whitechapel, East London. Eleven Extinction Rebellion[4] and Just Stop Oil activists were arrested. On that same day the oil companies who owned the depots had begun to take out injunctions against activists – chief among these was Valero Energy, the US company long famous for its role in exporting fuel from the Canadian tar sands. (And the focus of a campaign by UK Tar Sands Network[5].)

Later in the afternoon of that Good Friday, I am pushing through the petroleum crowd towards Tate Modern. The throng is thick along the Thames at Bankside, thick with Londoners and visitors. Voices from other lands surely brought by cheap jet plane or high speed train. It is a shock to be thrown into the post-Covid world, which seems to mirror entirely the pre-Covid world. The tourist trade in the metropolis is back to its ‘norm’ – the continual flights in an out of Heathrow, Stansted, Gatwick, Luton. The oil still flowing through the veins of the city. The burning is back to its ‘norm’.

Above the sea of heads I catch glimpses of the sharp blue and pink of XR flags. Quivering in the breeze over what turns out to be an XR stall proclaiming ‘Information & Trainings’. Opposition to the burning.

After the long Pandemic dormancy the spirit of rebellion has awoken: in the boldness of Just Stop Oil at the oil depots, here among XR in the heart of London, in the demands of #Stop Cambo[6] and #Stop Jackdaw, in new vitality of the Divest Fossil Fuels[7] movement, in the campaigns to Kick Fossil Fuels out of Footbal[8]l, in the engagement of Greenpeace UK[9], Friends of the Earth[10] and Global Witness[11] in the fight against oil, and in the strengthening calls from the likes of Fuel Poverty Action[12]. There is a rising tide … a driving pressure against oil, against fossil fuels. A new determination to set in for the long haul.

On the grass before Tate Modern are scattered the early audience. The mics are being tested and the stage set up before the backdrop reading

Oil is the Poison – Action is the Antidote.

This is a Writers Rebel event timed to be part of a week of actions by XR across London since the first banner drop at Tower Bridge on Friday 8th April.

XR activists drop a banner at Tower Bridge, London , 8th April 2022

Climbers dangled above the Thames between the slogan ‘End Fossil Fuels Now’ which was splashed across front pages and news channels. The day after there was an XR march through London’s West End, with sit downs in Regent Street and Oxford Circus. The following day health workers blocked Vauxhall and Lambeth bridges, sitting in the road behind a banner that read ‘For Health’s Sake: Stop Financing Fossil Fuels.’ On the Tuesday, four days ago, 60 activists had blocked every entrance of Lloyds of London – the great insurance engine of fossil fuel investment – and the institution had to close for the day.

London, UK. 12 April 2022. XR block the entrance to Lloyd’s of London office with banners and people glued on to all 27 entrances – Credit Guy Reece

On Wednesday and Thursday members of XR had been arrested during an action at the London head office of Shell, after they had glued themselves to the building and managed to penetrate the building up to the eighth floor. Their request to Shell staff was to ‘Jump Ship’ or become whistle blowers, or ‘Truth Tellers.’ As Chloe Naldrett, a theatre producer from Bristol, explained:

“Shell have absolutely no intention of stopping investing in fossil fuels … They currently have plans to expand their fossil fuel business by 20% for the next few decades. And that, for me, is a death sentence for my children.”

On Thursday, twenty-five scientists from Scientists Rebel had glued themselves to the glass front of the Department of Business, Energy & Industrial Strategy in protest at the UK government’s new Energy Strategy, which includes licensing new oil & gas fields in the North Sea.

Member of Scientists Rebellion glued onto the windows of the Department of Business & Energy, London – 13th April 2022

As Dr Aaron Thierry, an ecologist, explained:

“Last week the world’s scientists (of the Intergovernmental Panel on Climate Change) released a report that sounded the final alarm for the planet. It said we must end our addiction to fossil fuels now. The UK government’s response a few days later was to announce it will increase its exploration for oil and gas with the intention of extracting every last drop. Science tells us that this approach will condemn our civilisations to destruction. We will not stand by and let this happen.”

Nine scientists were summarily arrested[2][13]. Emma Smart, a marine biologist, was detained in Charing Cross Police Station and went on hunger strike against a cell with no windows and 24-hour sodium bulbs.

As we gather on the lawns of Tate, others are blockading bridges over the Thames at Lambeth, Blackfriars, Waterloo and Westminster[3][14], clogging the traffic arteries of the city.

Zena Edwards performing at Writers Rebel, 15th April 2022

Zena Edwards[15] takes the stage. Long shirt in the green of Nigeria and Ken Saro-Wiwa. Speaking and singing in her mellifluous tongue “We are the endangered species, but we say no to the victim’s song.”

The event has begun. Over the following two hours it unfolds through poets such as Raymond Antrobus, Liv Torc, Patience Agbabi, Nikita Gill and Lemn Sissay. Alongside them are writers including Inua Ellams, Courttia Newland, Maggie Gee, Alex Lockwood and Greg Norminton.

There’s a sense of speaking into existence a culture beyond oil. Tate was the sight of a long battle against the sponsorship of the arts by oil companies. After fifteen years of struggle by the likes of Lab of ii,[16] Platform, Art Not Oil[17] and Liberate Tate[18], the contract between BP and Tate was finally broken in early 2016 – as we describe in Crude Britannia[19]. Now six years on, Tate is still reluctant to talk openly about that battle, but the institution has shifted its position. The Director of Tate gave consent for Writers Rebel[20] on the museum’s lawn. For 25 years it would surely have been impossible to hang a banner reading ‘Oil is the Poison – Action is the Antidote’ next to gallery signage emblazoned with the BP sunflower logo? Things are shifting. The river of oil through the cultural institutions is drying up.

 

Liberate Tate action ‘The Gift’ at Tate Modern, 7th July 2012

The sun is strong on the lawns of Tate. The banners and flags of XR bright in the warm afternoon. It seems far from the periphery of London – the off ramps of the M25, the Thames side oil deports away downstream. Far from the police cells in central London and southern Essex where Just Stop Oil and XR activists sit in detention. This is surely one mass, one movement, though at times barely aware of its extent or riven by resentments? A movement that evermore threatens the incumbency of the oil corporations.

On the last day of the Rebellion, Saturday 16th April, two Olympiads – Ettienne Scott and Laura Baldwin – occupied an oil road tanker in Bayswater, Central London. Later a car ‘broke down’ at Marble Arch, activists locked onto it and the traffic of the intersection was disrupted, and a massive banner – End Fossil Fuels Now – was hung from the Marble Arch itself.

Final day of the Rebellion – at Marble Arch, 16th April 2022

Perhaps unconsciously this movement draws on the long history of opposition to oil in Britain, again and again it picks up on the tactics of past decades. The invasion of Shell’s offices echoes actions by the protestors from Canvey Island in Essex in 1973 who invaded the offices of Occidental to resist their plans to build a refinery. The tunnels under the gateway to the Navigator terminal mirror the tunnels dug to resist the Newbury Bypass in 1993. The ‘broken down car’ at Marble Arch recalls the cars used to block roads and occupy the space for a street party by Reclaim the Streets in the late 1990’s. The Scientist Rebellion pasting their reports to the windows of the Department of Business echoes Climate Camp at Heathrow in 2007 marching under a banner reading ‘We are armed … only with peer-reviewed science’.

Banner of the Climate Camp at Heathrow, August 2007

And Crude Awakening blockaded the entrance of the Coryton Refinery in 2010 just downstream from the Navigator terminal.

Crude Awakening activists blockade Coryton Refinery in Essex 2010

All these echoes of the past, but it feels that few weeks have seen protest that has been so multi-headed and involving a spectrum of society. These days seem to echo the movement around CND in the 1980s.

It echoes CND in another key aspect – in the attempt to include the future. Again and again the appeal of statements and banners is to ‘the children’, or ‘my children’s future’ or ‘the future of the more-than-human on this planet’.

Like CND this may be a long haul. (Even after seventy years the battle against nuclear weapons based in the UK is as difficult as ever.) It may be full of highs and lows. Like CND there is the unspoken limitation of a ‘unilateral declaration of no fossil fuels in UK’? If we end oil and gas licensing in the UK North Sea, if we end the financing of fossil fuels in the City of London, there is no guarantee that oil and gas extraction and investment will not take place out of Moscow, or New York, or Beijing, or the Gulf States. But as with CND, a principled stand must be taken somewhere and from that ‘multilateralism’ can be built – as is embodied in the campaign for a Fossil Fuel Non-Proliferation Treaty.[21] (Although progress on these matters maybe substantially hindered by the wider impact of the Economic War surrounding the war in Ukraine – as we explored in an earlier blog.[22])

But it seems this movement is growing and becoming more focused. These sixteen days took place under a banners that called to ‘stop fossil fuels’, as opposed to the wider XR demand to ‘tell the truth about climate change’. And with this focus, XR and Just Stop Oil become more closely part of a wider movement, within a spectrum that includes the campaigns of #Stop Cambo and #Stop Jackdaw, the Divest Fossil Fuels movement, Fuel Poverty Action, and Greenpeace UK, Friends of the Earth, Global Witness and other NGOs.

Powerful events are underway. Powerful forces within UK business and politics will throw up massive obstacles, but there is a growing momentum for change. And it won’t be stopped.

*

Many thanks to Terry Macalister, Rob Noyes and Ben Lennon.

*

[1][23] https://www.theguardian.com/environment/2022/apr/14/just-stop-oil-protesters-scale-fuel-tanker-to-block-m4-access-in-west-london

[24]

[2] https://www.theguardian.com/environment/2022/apr/15/just-stop-oil-protesters-arrested-staffordshire-essex

[3][25] https://www.theguardian.com/environment/2022/apr/15/just-stop-oil-protesters-arrested-staffordshire-essex

Endnotes:
  1. Just Stop Oil: https://juststopoil.org/
  2. [1]: #_ftn1
  3. Navigator terminal: https://www.resurgence.org/magazine/article5820-a-century-long-traffic-jam.html
  4. Extinction Rebellion: https://extinctionrebellion.uk/
  5. UK Tar Sands Network: https://www.no-tar-sands.org/
  6. #Stop Cambo: https://www.stopcambo.org.uk/
  7. Divest Fossil Fuels: https://gofossilfree.org/divestment/what-is-fossil-fuel-divestment/
  8. Kick Fossil Fuels out of Footbal: http://www.fossilfreefootball.org/
  9. Greenpeace UK: https://www.greenpeace.org.uk/
  10. Friends of the Earth: https://foe.scot/
  11. Global Witness: https://www.globalwitness.org/
  12. Fuel Poverty Action: https://www.fuelpovertyaction.org.uk/
  13. [2]: #_ftn2
  14. [3]: #_ftn3
  15. Zena Edwards: https://writersrebel.com/are-we-the-endangered-species-zena-edwards-at-the-antidote/
  16. Lab of ii,: https://labo.zone/?lang=en
  17. Art Not Oil: https://www.artnotoil.org.uk/
  18. Liberate Tate: https://liberatetate.wordpress.com/
  19. Crude Britannia: https://johnsandoe.com/product/crude-britannia-how-oil-shaped-a-nation/
  20. Writers Rebel: https://writersrebel.com/
  21. Fossil Fuel Non-Proliferation Treaty.: https://fossilfueltreaty.org/
  22. an earlier blog.: https://platformlondon.org/2022/04/04/tectonic-shifts-the-energy-crisis-and-the-leap-beyond-the-economic-war-part-4/
  23. [1]: #_ftnref1
  24. : #_ftnref2
  25. [3]: #_ftnref3

Opening image of ‘Offshore’ – Platform’s documentary film on just transition in the UK North Sea

Shell declares it may go back into Cambo and the oilfield’s exploration license is extended by two years. The British government pushes for renewed drilling in the UK North Sea. There is public outcry at the Chancellor’s failure to defend households from the attack on living standards driven by price inflation. The Russian government announces that ‘unfriendly states’ will need to pay for gas imports in roubles. The global oil price rises again to $120 per barrel. Could these distinct events be indications of a tectonic shift in the politics of oil and gas?

It is well understood that the energy systems of the Industrial World have undergone repeated shocks and transformations in the last century, could we be in the midst of another? Can we use this as the springboard to leap beyond fossil fuels?

On March 19th as war raged around Kyiv and Mariupol, at a community centre in Torry, part of Aberdeen, Platform and Friends of the Earth Scotland were showing the new documentary, Offshore[1]. As one viewer tweeted: ‘Climate Change is a disaster … that requires a clear response to achieve a Just Transition. This film can be an inspiration for the way!’ A fine response for the beginning of the film’s tour to communities across the UK. It may seem that Ukraine is a world away from this film and North East Scotland, but the Just Transition out of oil and gas production in the UK will only take place in the context of global politics of energy and will inevitably be impacted by shocks within it.

Maybe we can learn from the oil crises of the past. Both 1973 and 1979 are held up as years in which shocks altered the geopolitics of energy.

Cars queue for petrol in the ‘Oil Crisis’ of 1973

During the 1973 ‘Oil Crisis’, sparked by the Arab-Israeli War, the price of crude jumped from $22 to $61 per barrel[1][2], cars queued in the Petrol Panic, and the cost of energy fatally wounded the Social Democracy of Post-War Britain. This economic disruption assisted those aiming to attack the political settlement built on the Welfare State and nationalised industries that drove rising equality in the UK. Oil exploration in the North Sea became a security priority as the British government feared being ‘held to ransom’ by the oil producing states of OPEC. And on the back of oil prices remaining high, drilling offshore in the UK sector became profitable for British and US oil corporations, assisted by the highly beneficial tax arrangements made by the state.

Troops in trenches at the front line of the Iran – Iraq War 1979

In 1979, the Iranian Revolution and the subsequent Iran-Iraq War, once again led to a doubling in the cost of crude[2][3], but this time it generated a radical increase in British state income from the UK North Sea. The higher oil price provided the tax revenues that enabled the Thatcher government to ride out mass unemployment as it implemented radical economic polices – most dramatic of all being the battle against the trades unions and the closure of the coal mines. Within the energy industry, the new crisis enabled oil and gas traders come into their own. The establishment of the London International Financial Futures Exchange in 1982 symbolised this new phase, founded on the trade in financial instruments linked to oil rather than purely the trade in physical barrels of crude. Meanwhile the oil corporations also changed, embracing financialization and becoming bastions of the Neoliberal model that underpinned the Conservative and then the New Labour governments.

In Crude Britannia[4] we explore these shifts, and the key characters in the oil business and politics that drove them, from Peter Walters CEO of BP, to Prime Ministers Margaret Thatcher and Tony Blair, and back to John Browne another CEO of BP.

The war in Ukraine is now a month old, and it may well be far too soon to draw predictions that later prove to be fatally wide of the mark. But it seems necessary to consider the wider implications and so this piece is written in the spirit of debate, with a desire to engage in discussion. It has arisen from exchange between several of us focused on energy matters and we are keen to hear your reflections.

The indicators that suggest tectonic shifts, on a scale that might echo 1973 and 1979, are multiple:

The brutality of the war, the unexpected strength of the Ukrainian resistance, and the slowness of the Russian advance, imply that these battles may be long and drawn out. It is possible that the process of peace talks will halt the fighting, but the conflict will remain intense for some time. As NATO is understandably reluctant to engage in direct military conflict, the importance of sanctions – of the Economic War – grows ever stronger.

The speed and scale of the corporate withdrawal from Russia, led by BP putting its 19.7% stake in Rosneft up for sale, shocked many financial analysts and media commentators. Such action is extremely rare in the history of the oil industry. After the Russian annexation of Crimea in 2014, the US and EU sanctioned Rosneft, but BP held on. So why now? It is possible the companies are playing for time, that they are hoping that peace will come speedily and they will soon be able to return to the assets that they declared they would sell.

But if the war is prolonged, and the brutality of it makes Western governments and civil society shun Russia over the longer term, then any return to those ‘lost’ oil and gas fields will be far harder to achieve. In the meantime, Russia has banned foreign investors selling their assets, although finding buyers at present will be hard. It is possible that Russia will expropriate these assets, including BP’s 19.7% stake in Rosneft.[3][5] A former BP executive told the Financial Times in mid March that the withdrawal marks ‘the end of an era, “a complete geopolitical reset”, that could cut off much of the world from Russian resources, business and culture for a generation’.[4][6]

Larry Fink, CEO of BlackRock asset management corporation

On 24th March, Larry Fink CEO of BlackRock, one of the world’s largest private finance institutions with $10tn under management, issued his annual letter to shareholders[5][7]. Fink solemnly declared: ‘The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades. We had already seen connectivity between nations, companies and even people strained by two years of the pandemic.’ He spelt out the role of corporate finance in this struggle: ‘The invasion has catalyzed nations and governments to come together to sever financial and business ties with Russia. United in their steadfast commitment to support the Ukrainian people, they launched an “economic war” against Russia… Capital markets, financial institutions and companies have gone even further beyond government-imposed sanctions.’[6][8]

Fink’s words have immense power to influence the markets and indeed the corporations in which BlackRock holds substantial shareholdings. Significantly the institution holds 8.8% of the shares of BP[7][9], making it the oil company’s largest shareholder[8][10]. It is reasonable to assume that the board of BP discussed with asset managers at BlackRock before deciding to sell out of Rosneft. BlackRock also owns 7.3% of Shell.[9][11]

Perhaps Russia will become a ‘pariah economy’ to Western nations and be largely shut out of globalised trade with them, whilst maintaining its exchange with China, India and a range of other nations? Arising from this prospect there are already clear tensions between the US and China, and indeed UK and India. Whilst elsewhere the conflict is creating new rapprochements: between the UK and Iran, as indicated by the release of British citizen, Nazanin Zaghari-Ratcliffe[10][12], and between The States and Venezuela, with the release of US citizen, Gustavo Cárdenas.[11][13]

The results of the voting on the UN resolution on the war in Ukraine

At the key resolution in the UN on March 2nd when 141 nations voted against Russia’s aggression in Ukraine, it was notable that China, India, Iran and Venezuela abstained or had no vote recorded. Also among that group was Algeria, Angola, Botswana, Burundi, Central African Republic, Congo, Equatorial Guinea, Ethiopia, Eswatini, Ethiopia, Guinea, Guinea-Bissau, Madagascar, Mali, Morocco, Mozambique, Namibia, Somalia, South Africa, Sudan, Togo, Uganda, Tanzania and Zimbabwe. The sheer range of African states is striking and illustrates that the nations of this continent are not necessarily allied to the western powers. The Russian state, aided by mercenaries such as the Wagner Group, directly supports a number of governments such as in Sudan and Mali[12][14]. It may well be that oil and gas extraction by key exporters such as Nigeria, Mozambique, Algeria and Angola becomes a greater source of conflict.[13][15]

A debate rages within the EU as to whether there should be an embargo on Russian oil and gas, as has been repeatedly requested by the Ukrainian government and is being enacted (albeit partially and slowly) by the US, Canada and UK. (See our earlier blog on actions by dockworkers on Merseyside and the Thames.) An embargo on Russian gas would have a profound impact on the economy of Germany and other states, possibly triggering a recession across the EU. However Germany, which is dependent upon Russia for 52% of its gas and 34% of its oil, has announced its intent to cease all gas and oil imports from Russia by mid 2024.[14][16] Poland has declared a similar intention. These are remarkable geopolitical decisions even if implementing them proves extremely challenging. It is possible that the decisive act on gas exports may be taken by the Russian government. The declaration that gas purchases must be paid for in Roubles from April (and the battle over this that is currently underway) and the dramatic rise in Liquid Natural Gas exports from Russia to China, maybe the first signs of Russian action. However to loose that the European export market would pose huge challenges for Russian gas industry and the state.

As the Financial Times reported, Konstantin Simonov, head of the National Energy Security Center in Moscow, says he expects Russia to speed up the construction of gas pipelines to China, boost oil sales to Beijing and lean on existing Chinese co-operation in oilfield services. “It is clear that China will try to take advantage of this situation here, too. There are no illusions,” he says.[15][17] However Simonov may not be the most trustworthy commentator on these matters, and for Russia to export gas from the West of Urals fields to China may not make economic sense.

It is possible that Russia is moving into a closer relationship with China (although China is being reticent), but it is certain that there is a parallel process among western states. After the chilling of relations between the EU and the US during the Trump Administration, there is now a far warmer relationship between the two blocs, as both parties cleave to NATO and explore ‘energy security’ measures together. Germany may have announced its desire to come off Russian gas, but in the same breath there are moves to strengthen dependence on the importation of LNG from states such as the USA. In the US there has been a long struggle against LNG and the gas fracking that underpins it, and these geopolitical shifts will undoubtedly make that battle harder to win.

Should an official embargo on Russian oil and gas be imposed, or the Western corporations cease to buy it (witness Shell’s intense embarrassment over Russian oil purchases), the hydrocarbons of the world’s largest gas exporter and second largest oil exporter, may be shut off from parts of the global market. (Significantly it may not be blocked from China, India and the many African states noted above.) This will strengthen the hand of other oil producers such as Saudi Arabia, Canada and the US[16][18], and may lead to an easing of embargos on Venezuela and Iran. By all accounts it is likely to ensure oil and gas prices remain high for the duration of the war in Ukraine, and if Russia is kept as a ‘pariah economy’ by western states, then for far longer. A month before the invasion of Ukraine the global oil price stood at $80 a barrel, since that point it has hit around $120 a barrel twice.[17][19] These rises in fuel cost need to be understood as combining with soaring food prices, especially in wheat and sunflower oil. This could have huge impacts across the Middle East and Africa.

If these events are the signs of a tectonic shift, then how might that play out in the UK?

Map showing the location of the Cambo oil field 100 miles west of Shetland

In the immediate term the war strengthens the hand of the oil and gas companies, and the financial institutions behind them, that have long argued for a continuation of exploration in the UK North Sea. The notion that the development of oil fields such as the controversial oilfield Cambo will get Britain out of being ‘held to ransom by Putin’ is laughable. The UK only imports 4% of its gas and 8% of it oil[18][20] from Russia, Cambo will take several years to produce oil and there is no requirement that its output should be sold to British refineries rather than onto the global market.

But in the short term the war and its impact on prices allows the UK and other western governments to call for renewed drilling. The weight of state support to the oil companies has meant, at the very least, that the exploration license for Cambo has been given a two-year extension by the Oil & Gas Authority (recently renamed the North Sea Transition Authority[19][21]). It is clear that the war has similarly revived the calls for the UK to lift the moratoriums on fracking, which may result in Cuadrilla stopping its planned capping of fracked gas wells in Lancashire[20][22].

On the opposing side, the rise in fuel prices, the cost of living crisis and the obvious link between fossil fuels and war strengthens the hand of those calling for the UK to make a bold leap out of gas and oil and into renewables. Prime Minister Johnson has felt obliged to call for a renewed drive towards wind power, both offshore and onshore, and to lift planning restrictions on new nuclear plants. The latter proposal, like that on offshore drilling, neglects to reveal just how long it will take to have nuclear energy systems on line and providing electricity, whilst there are continuing concerns around the degree to which schemes such as that at Hinkley Point and Sizewell C make the UK dependent on Chinese capital.[21][23]

But as the author Nick Robins has pointed out, the ‘Oil Shocks’ of 1973 and 1979 did not only thrust Britain ever deeper into oil and gas – with the massive ramping up of UK offshore production and the building of the national gas grid – they also empowered the birth of ‘Alternative Energy’.

Cover of EF Schumacher’s ground breaking book – ‘Small is Beautiful’.

Key works in the environmental movement were published in the early ‘70s : The Ecologist’s ‘Blueprint for Survival’ (1972), The Club of Rome’s ‘The Limits to Growth’ (1972) and EF Schumacher’s ‘Small is Beautiful’ (1973). Whilst the Centre for Alternative Technology in Machynlleth, Wales was established in 1972. All of these were the seeds of much of the world that we now live within. Fuelled by the same movement, Vestas launched its first commercial wind turbine in 1979. It has taken far, far too long for this technology to be truly embraced but forty years on, Denmark draws around 46% of its electricity from wind over the year, and the UK draws approximately 27%.[22][24]

It is inevitable that the oil and gas industry will utilise the crisis to drive us deeper into fossil fuel extraction, as the examples of Shell’s drive for Cambo and Cuadrilla’s push to reopen wells show, but might the crisis also be used by those who are pushing for a democratically controlled, publically owned renewable energy system? Whilst in the 1970s renewable energy systems were in their infancy, considered ‘alternative’ energy, now in the UK we have an array of mature technologies – including wind, solar, energy efficiency, heat pumps – and the widespread public acceptance of the pressure of climate chaos.

The Just Transition was never likely to be a smooth shift from oil and gas to wind and solar, might a future generation look back at the current crisis as being the jolt that pushed the UK to make a bold leap? The ‘leg’ of Net Zero has emphasised the low carbon emissions of renewable energy, but this current crisis illustrates a second ‘leg’ of fossil fuels being unstable in supply and volatile in price. Might we use both of these limbs as we jump forward?[23][25]

Action by Greenpeace at the UK Treasury as part of ‘Get Off Gas’ campaign

There are positive signs of this. Greenpeace UK has launched its Get off Gas campaign. An array of Opposition MPs, including Jon Trickett, John McDonnell, Mick Whitley[24][26] and campaigning groups such as We Own It, have called for the establishment of a public energy company. Whilst Caroline Lucas MP has called for a nationwide programme of home insulation[25][27], a central demand of campaigners at Fuel Poverty Action and the direct action group Insulate Britain. Whilst the government could tackle the rising costs of domestic fuel by ensuring the energy companies bear the burden of price rises, as has happened in France.[26][28]

In the realm of finance, Sean Kidney, head of the Climate Bonds Initiative[27][29], has highlighted the potential for ‘freedom bonds’ – similar to the Liberty Bonds issued by the US Government to finance its transformation of the American economy during World War II. Meanwhile the war has catalysed the movement to push pension funds to divest from fossil fuel stocks, not least by revealing just how many local authority pension schemes hold shares in Russian oil companies[28][30].

Larry Fink also declared that the search for alternatives to Russian oil and natural gas “will inevitably slow the world’s progress toward net zero [emissions] in the near term”. But in the “Longer-term, I believe that recent events will actually accelerate the shift toward greener sources of energy” because higher prices for fossil fuels.[29][31] The challenge will be how to redirect capital – especially ‘workers capital’ in the form of pension funds – towards projects that assist a Just Transition and phase out fossil fuels, rather that schemes focused purely on capital return.

There is no doubt that that shift from oil and gas production in the UK, coupled with the vast undertaking to implement Zero Carbon plans in cities across Britain, will require a massive leap by civil society, political bodies and financial institutions. For communities such as Torry, Aberdeen to shift from half a century of being entwined in the offshore industry and avoid the impacts that the threatened Energy Transition Zone (being valiantly fought by the Friends of Saint Fitticks Park), will require the whole of British society to undertake a jump into new energy economy. This brutal war, and the oil and gas shock that we are currently experiencing, might unwittingly provide the catalyst for that jump. Now is the time for a radical reduction in our dependency of fossil fuels.

*

This piece was built from busy exchange with Simon Pirani, Emma Hughes, Andy Rowell, Ben Lennon, Nick Robins, Rob Noyes and Kolya Abramsky. It draws from the work of Terry Macalister, Gaby Jeliazkov, Rosemary Harris and a forthcoming piece by Nick Robins. Many thanks to them all, and in the hope of much further discussion.

*

[1][32] https://www.macrotrends.net/1369/crude-oil-price-history-chart

[2][33] https://www.macrotrends.net/1369/crude-oil-price-history-chart

[3][34] https://www.ft.com/content/e9238fa2-65a2-4753-a845-ce8129f93a0c

[4][35] https://www.ft.com/content/e9238fa2-65a2-4753-a845-ce8129f93a0c

[5][36] https://www.ft.com/content/0c9e3b72-8d8d-4129-afb5-655571a01025

[6][37] https://www.blackrock.com/corporate/investor-relations/larry-fink-chairmans-letter

[7][38] https://fintel.io/so/us/bp/blackrock

[8][39] https://simplywall.st/stocks/gb/energy/lse-bp./bp-shares/news/bp-plc-lonbp-is-largely-controlled-by-institutional-sharehol

[9][40] https://fintel.io/so/gb/rdsb/blackrock

[10][41] https://www.irishtimes.com/news/world/uk/iran-releases-british-iranian-woman-nazanin-zaghari-ratcliffe-1.4828408

[11][42] https://www.bbc.co.uk/news/world-latin-america-60675469

[12][43] https://blogs.lse.ac.uk/africaatlse/2022/03/21/how-russia-is-pursuing-state-capture-in-africa-ukraine-wagner-group/

[13][44] https://www.theguardian.com/world/2022/mar/28/cold-war-echoes-african-leaders-resist-criticising-putins-war-ukraine

[14][45] https://www.politico.eu/article/germany-aims-to-be-nearly-free-of-russian-oil-and-coal-by-years-end/

[15][46] https://www.ft.com/content/e9238fa2-65a2-4753-a845-ce8129f93a0c

[16][47] https://www.ft.com/content/df47949a-380a-43ca-9286-dfa89ed9016e

[17][48] https://tradingeconomics.com/commodity/crude-oil

[18][49] https://www.gov.uk/government/news/uk-to-phase-out-russian-oil-imports#:~:text=Russian%20imports%20account%20for%208,%2C%20Saudi%20Arabia%2C%20and%20USA.

[19][50] https://www.nstauthority.co.uk/

[20][51] https://news.sky.com/story/climate-change-cuadrilla-ordered-to-plug-and-abandon-shale-gas-fracking-wells-in-lancashire-12538040

[21][52] https://www.ft.com/content/95524dfc-6503-48c7-85ad-a116bdf2c9ed

[22][53] https://inews.co.uk/news/storm-eunice-turbines-generate-almost-50-per-cent-of-uk-electricity-needs-during-gale-force-winds-1470963

[23][54] See also the work of Nigel Topping – High Level Champion for Climate Action at COP26 – https://www.linkedin.com/pulse/power-freedom-net-zero-nigel-topping-1e/

[24][55] https://www.birkenhead.news/birkenhead-mp-calls-for-energy-sector-to-be-brought-back-into-public-hands/

[25][56] https://www.greenparty.org.uk/news/2022/02/03/caroline-lucas-mp-response-to-ofgem-announcement-on-energy-price-cap/

[26][57] https://www.theguardian.com/business/2022/jan/14/france-edf-cap-household-energy-bills

[27][58] https://www.climatebonds.net/about/speakers-bureau/sean-kidney

[28][59] https://bylinetimes.com/2022/03/25/profiting-from-putins-russia-quarter-of-council-pension-funds-invested-in-russian-firms/

[29][60] https://www.ft.com/content/0c9e3b72-8d8d-4129-afb5-655571a01025

Endnotes:
  1. Offshore: https://offshorefilm.org/Trailer
  2. [1]: #_ftn1
  3. [2]: #_ftn2
  4. Crude Britannia: https://johnsandoe.com/product/crude-britannia-how-oil-shaped-a-nation/
  5. [3]: #_ftn3
  6. [4]: #_ftn4
  7. [5]: #_ftn5
  8. [6]: #_ftn6
  9. [7]: #_ftn7
  10. [8]: #_ftn8
  11. [9]: #_ftn9
  12. [10]: #_ftn10
  13. [11]: #_ftn11
  14. [12]: #_ftn12
  15. [13]: #_ftn13
  16. [14]: #_ftn14
  17. [15]: #_ftn15
  18. [16]: #_ftn16
  19. [17]: #_ftn17
  20. [18]: #_ftn18
  21. [19]: #_ftn19
  22. [20]: #_ftn20
  23. [21]: #_ftn21
  24. [22]: #_ftn22
  25. [23]: #_ftn23
  26. [24]: #_ftn24
  27. [25]: #_ftn25
  28. [26]: #_ftn26
  29. [27]: #_ftn27
  30. [28]: #_ftn28
  31. [29]: #_ftn29
  32. [1]: #_ftnref1
  33. [2]: #_ftnref2
  34. [3]: #_ftnref3
  35. [4]: #_ftnref4
  36. [5]: #_ftnref5
  37. [6]: #_ftnref6
  38. [7]: #_ftnref7
  39. [8]: #_ftnref8
  40. [9]: #_ftnref9
  41. [10]: #_ftnref10
  42. [11]: #_ftnref11
  43. [12]: #_ftnref12
  44. [13]: #_ftnref13
  45. [14]: #_ftnref14
  46. [15]: #_ftnref15
  47. [16]: #_ftnref16
  48. [17]: #_ftnref17
  49. [18]: #_ftnref18
  50. [19]: #_ftnref19
  51. [20]: #_ftnref20
  52. [21]: #_ftnref21
  53. [22]: #_ftnref22
  54. [23]: #_ftnref23
  55. [24]: #_ftnref24
  56. [25]: #_ftnref25
  57. [26]: #_ftnref26
  58. [27]: #_ftnref27
  59. [28]: #_ftnref28
  60. [29]: #_ftnref29

Roman Abramovich disgruntled at a Chelsea FC game

Roman Abramovich under sanctions! Chelsea up for sale! Scandal engulfs Everton FC as a key donor Alisher Usmanov is added to the UK government’s list of ‘named Oligarchs’. The Economic War has opened a new front on the pitch. Football is pulled into the Russian invasion of Ukraine just as Western corporations and the oil and gas docks of Tranmere and Grain before them.

The public outcry over the role of Russian billionaires in the British economy and politics howls from the front pages. There’s a clear public delight in seeing the super-rich brought down. The stories of yachts being impounded brightens our days. And ‘Anarchist Squatters’ in Belgravia are feted as liberators in the Tabloids. The world turned upside down!

The forced sale of Chelsea FC and the disgracing of Usmanov at Everton, might seem like collateral damage in the conflict, as though football has nothing to do with the forces that lie behind the shelling of Kyiv and Kharkiv.  As Amanda Staveley, who facilitated the purchase of Newcastle FC said: “This world is never not going to have problems. It’s really hard, and I’m really sad today that someone is going to have a football club taken away because of a relationship he may have with someone.”

However, we cannot help but understand how oil and gas play a key role in this brutal battle and that means that football too is implicated, for football and fossil fuels are intimately entwined.

The profits from the oil and gas industry have underpinned the revenues of the Russian state and have underpinned the wealth of Russia’s oligarch elite. And that oligarch elite has underpinned the financing of football in the UK and beyond. There is a direct line of roubles and dollars and sterling, passing through the hands of Abramovich and Usmanov, that links to funding of Chelsea and Everton to the oil wells of Sibneft (1) and the gas pipelines of Gazprom.(2)

This is not unique. The twist in the Economic War, in which the governments of the West turn on the Oligarchs of Russia, only serves to reveal the long marriage of oil and football since the early 1930s.

This November the World Cup is to be hosted by Qatar. The richest state per-capita on Earth as a result of it accounting for 13% of global gas reserves. Qatar is the largest liquid Natural Gas (LNG) exporter in the world. The Qatar Petroleum company owns the majority of the South Hook Terminal LNG on Milford Haven in Wales feeding gas into the UK grid. South Hook is the largest LNG plant in Europe and the UK’s apparent ‘fall back’ as the embargo on LNG from Russia is imposed.

 

The gas grid around the Severn Estuary – gas pumped in from the South Hook LNG terminal at Milford Haven

This year’s World Cup will be held near the gas and oil fields of a Gulf State. Fittingly, football was introduced to Qatar by British riggers working for the Anglo Persian Oil Company. This corporation, now known as BP, obtained the concession to drill for oil in Qatar in 1935, whilst the state was a British Protectorate, effectively part of the Empire. In 1951, Qatar’s first competitive football tournament (the Ezz Eddin Tournament) was organised by Qatar Petroleum Company, two years after the country began to export oil to the UK.

Fossil fuels and football became evermore entwined as the consumption of oil and natural gas has grown rapidly in the last 70 years. For example, Inter Milan’s most successful period as a club was in the 1950’s, when they were bought and invested into by the oil magnate Angelo Moratti, who passed ownership down to his son. It was in the family until 2016, when it was sold to a privately owned Chinese company – Suning Holdings Group.

We can see football and oil are threaded together by a set of stands.

Firstly through direct ownership of clubs. Not only Chelsea FC, but also Man City, Newcastle, Bournemouth are all owned by the investment companies of oil states or businessmen that made their money in oil. The same goes in other countries. For example in France, Paris St Germain and Nice are owned by oil. Whilst it is no surprise that the biggest Russian football team,  Zenit St. Petersburg,  is owned 100% by Gazprom.

Secondly, through oil states hosting major international tournaments. Qatar’s World Cup 2022 follows Russia’s World Cup in 2018. Whilst Guinea hosted the Africa Cup of Nations in 2015 at a time when 81% of Guinea’s state expenditure was funded by hydrocarbon revenues.

Vladimir Putin giving the Order of Friendship to Fifa President Gianni Infantino

Then there is the third strand, where oil money infiltrates the formal structures of the management of the game. The most obvious example being President of Fifa, Gianni Infantino’s, close relationship to Vladimir Putin. Infantino infamously received the Order of Friendship from his friend in 2019, a year after proudly proclaiming at the 2018 World Cup that Fifa and Putin’s Russia were ‘a team’, who together were forging what he called ‘a new image of Russia’.

 

Gazprom sponsoring Shalke 04 – they also sponsored, until recently, the Champions League.

And finally through the sponsorship deals between oil companies, major clubs and tournaments. Gazprom sponsored the Champions League, the World Cup, and Euro 2021. Total has sponsored the African Cup of Nations since 2016.

But the sponsorship of football by fossil fuels extends beyond oil companies to include the banks that finance oil projects and thereby drive forward climate chaos, cutting sponsorship deals. These include Barclays Bank sponsoring the Premier League and Standard Chartered sponsoring Liverpool FC.

The Economic War has swung the spotlight onto the oil plutocrats who own British clubs, and in eight months time the World Cup will open in an oil state. What is to be done? How can football break its link with the finances that fuel the machine at war in the Ukraine and the machine that drives climate chaos? After all, the two are one and the same.

The last two decades have seen a powerful campaign to end the sponsorship of arts and science institutions by oil and gas companies, as we explore in Crude Britannia.[1] Starting with the group Art Not Oil[2] protesting outside the BP sponsored National Portrait Gallery in 2002, through the rebellious performances of the Laboratory of Insurrectionary Imagination[3], Liberate Tate [4]and BP or not to BP?[5], to the sustained brilliance of Culture Unstained [6]– and supported by a host of other groups such as Platform, Greenpeace,[7] UKSCN[8] and XR[9] – this campaign has had a run of victories. As an image produced by BP or not to BP? Illustrates, the last decade has seen oil sponsorship links broken at Tate, National Gallery, National Portrait Gallery and a number of other institutions.

 

Image from BP or not BP? illustrating just how many contracts between the oil companies and the cultural institutions have been broken

This shows what can be done, now is the hour for the newly launched Kick Fossil Fuels Out of Football[10] to take the field and rid the beautiful game of its sticky centre. In so doing, can football fans possess the focal point of their passion again? In the coming weeks, Platform’s Kick Fossil Fuels Out of Football campaign will start in Liverpool, ora workshops for fans to run a local campaign from. We’ll hear more from those fans in coming months, as they start their journey.

With Abramovich forced out ofChelsea, Gazprom knocked out of the Champions League, and the World Cup being hosted in an oil state, now is the time for fans across the World to line up together and kick fossil fuels out of football, once and for all!

*

With many thanks to Rob Noyes and Terry Macalister.

*

1. Roman Abramovich, together with his then ally Boris Berezovsky, built much of his wealth through the corrupt acquisition of Russian state-owned oil company Sibneft in the mid 1990s.

2. From late 1990s to 20214, Alisher Usmanov was General Director of Gazprom Invest Holdings – investment subsidiary of Russian state-owned gas company.

For further reading see: https://worldat1c.org/fossil-fuels-and-football-44cd6c216d3

Endnotes:
  1. Crude Britannia.: https://johnsandoe.com/product/crude-britannia-how-oil-shaped-a-nation/
  2. Art Not Oil: https://www.artnotoil.org.uk/
  3. Laboratory of Insurrectionary Imagination: https://labo.zone/?lang=en
  4. Liberate Tate : https://liberatetate.wordpress.com/
  5. BP or not to BP?: https://bp-or-not-bp.org/
  6. ulture Unstained : https://cultureunstained.org/
  7. reenpeace,: https://www.greenpeace.org.uk/
  8. UKSCN: https://ukscn.org/
  9. XR: https://extinctionrebellion.uk/
  10. Kick Fossil Fuels Out of Football: https://twitter.com/KickFossilFuels

Shell’s MV Pearl LNG tanker carrying Russian gas to Wales

You can track them still on MarineTraffic.com[1] … the MV Seacod, the MV Boris Vilkitsky and the MV Pearl. Three ghost ships of the energy system, the spirits of the Economic War.

All three of these vessels broke out of the fog that normally swathes the constant trade in oil and gas. All three neared the estuaries of Britain in the days shortly after the Russian invasion of the Ukraine. As the battle raged in cities such as Mariupol and Kharkiv these ships ploughed the seas towards their planned destinations.

The first, the MV Pearl liquid natural gas (LNG) tanker owned by Shell docked at the Dragon Terminal in Milford Haven, Wales, on Thursday 3rd March a week after Russian forces attacked[1][2]. Sailing under a Maltese flag, she carried 174,000 cubic meters of liquefied gas that was piped onshore and regasified, prior to being pumped into the National Grid system and away to the cookers and power stations of Britain.

 

The gas grid around the Severn Estuary (pipelines in red) – gas pumped in from the LNG terminals at Milford Haven to the rest of the UK

There was little notice paid to this massive ship that had powered from a western Russian port, and only once it had unloaded and departed on the evening of Friday 4th March – bound for the US Gulf of Mexico – did it receive coverage in the Nation Cymru[3].[2][4] Business as usual in the world of fossil fuels. (You can follow her on Marine Traffic[5])

The second vessel, the MV Seacod did not go unnoticed. She arrived in Liverpool Bay carrying a cargo of Russian oil loaded on Tuesday 22nd February, two days before the invasion of Ukraine. Her hold was filled at the port of Primorsk near St Petersburg, which accounts for 30% of the country’s seaborne crude exports. Already, as she waited in the roads off New Brighton she made the local press, the Birkenhead News.[6][3][7] She managed to dock as planned at the jetty in Tranmere on the Wirral. It was intended that her load would be pumped ashore. The crude was to be driven through fifteen miles of pipeline, under the woods and meadows of Eastham Country Park, to the refinery of Stanlow.

 

MV Seacod oil tanker at the jetty in Tranmere – where dockworkers refused to unload her.

Amidst this array of storage tanks and flare stacks, the liquid geology of Russia was to be turned into petrol and diesel, jet fuel and tarmac, ready to be distributed across the North West of England and North and Mid Wales. The machine of the refinery dominates the southern bank of Mersey an icon that is celebrated in music – as we described in Crude Britannia[8]. The pulsing somber track by Jesu, titled Stanlow[9], includes the lines:

All the ghosts that haunt us don’t scare
We’re just too selfish to be that aware

But some were aware of the Seacod’s cargo. Soon after the press reports the dockers of Tranmere, members of Unite, refused to handle the ship’s cargo, declaring that they would

“under no circumstances unload any Russian oil regardless of the nationality of the vessel which delivers it.”[4][10]

They graphically illustrated the loophole in the UK government’s ‘sanctions regime’. Grant Shapps, UK Transport Minister, had declared that Russian owned or flagged vessels could not dock at British ports, but had not referred to Russian cargos. The Seacod is German flagged, though carrying a cargo of Russian oil most likely sold by Litasco, the trading arm of the oil company Lukoil, to the owners of Stanlow, the Indian-based Essar Petroleum.[5][11] (We covered the background of Stanlow and Essar in an earlier blog.[12])

The dockers of the Mersey, with a long history of independent and radical action stretching back to the strike against casualization of labour in 1995 and beyond, took matters into their own hands. It may well be that they received support from workers in the Stanlow Refinery, for union members there had taken action in the 1980s against Shell – who then owned the plant – over the corporation’s involvement in Apartheid South Africa. We should not underestimate the courage of their decision, given that it caused a substantial cost and embarrassment to Essar. Essar who own the refinery and the jetty, are one of the major employers in the region and sponsor the local football team, Tranmere Rovers[13]. Essar who are themselves, deeply embedded in the Russian oil world as they have had a substantial commercial partnership with Rosneft in the Indian market since 2017.[6][14]

It looks as though the Seacod’s shipment of Russian oil will be the last such cargo in the Mersey for some while. The ship herself left the Tranmere jetty on the Sunday morning of 6th March and headed North apparently still carrying her crude cargo. A day later she was in The Minch. At the time of writing she was off the coast of Norway, apparently returning to Primorsk. (You can follow her on Marine Traffic [15][7][16])

MV Boris Vilkitsky en route from the Russian Arctic port of Sabetta

The third vessel was equally unlucky. The MV Boris Vilkitsky,[17] carrying LNG from the Russian port of Sabetta had departed that Arctic city on 24th February, the day of the invasion. The gas had been extracted by Novatek, a Russian firm in which TotalEnergies owns a 20% stake[8][18]. The ship is owned by the Greek firm Dynagas and managed by the Russian company Yamal LNG OAO[9][19].

The vast tanker arrived at the mouth of the Thames Estuary in the early hours of Friday 4th March. Before she began her passage into the narrow entrance of the River Medway and reached the quay of the Isle of Grain terminal, the dockers refused to unload her[20]. Mat Lay, National Energy Organiser of UNISON said

“The workers at the National Grid terminal don’t want to touch the cargo given the tragedy unfolding in Ukraine… These staff are determined to show their support for the Ukrainian people and uphold the sanctions imposed against Russia.”

At any other moment, dockers refusing to carry out contracted duties would have been vilified in the press, now they were celebrated in the local and national media.[10][21] Workers were taking a principled stand in support of the suffering citizens of the Ukraine, and risking disciplinary action,[22] at precisely the time when the Tory government seemed to be foot dragging over implementing sanctions on Russian oligarchs.

The terminal at Isle of Grain is owned by National Grid and they have a long-term access agreement with Centrica. That company, which sells gas to UK householders and businesses (and oversaw a 44% profit increase in 2021 on the back of huge price rises) had purchased the LNG load aboard the MV Boris Vilkitsky. This was in spite of the CEO of the corporation declaring only four days earlier on 1st March:

“We are shocked by the events unfolding in Ukraine and the needless loss of life … We intend to exit our gas supply agreements with Russian counterparts, principally Gazprom, as a matter of urgency.”[11][23]

 

The gas grid in the Thames Estuary – gas pumped in from the LNG terminal at Isle of Grain.

The mighty ship had to slink back out to sea again carrying its unwanted cargo. The box bulk of it would have been visible from the seafront at Margate as it travelled east and then turned south into The Channel. The following day she docked at Montoir-de-Bretagne, 40 km west of La Zad[24], on the coast of France, owned by Engie. Perhaps her captain took orders from the vessel’s managers as to her new destination? Or maybe Centrica, as the charterers of the ship were looking for a new purchaser for the gas on board? Or did TotalEnergies direct the cargo to France – a cargo whose value was spiralling as the ship undertook its voyage?

At the French port, the MV Boris Vilkitsky was met by Greenpeace demonstrators in inflatable boats with banners on Saturday 5th March.

Helene Bourges, head of the fossil fuel campaign for Greenpeace France said:

“How many more missiles have to destroy civilian lives before we ditch fossil fuels? Putin’s invasion is yet another example of the many conflicts fuelled by oil and gas across the world.” She continued: “After helping fill the Kremlin’s pockets and fuel its tanks, the oil giants are now racing to leave Russia in a desperate attempt to protect their image. But the damage is done and despite the sanctions, ships loaded with Putin’s gas are still docking in Europe.”

By this time the news wires were beginning to hum with the observation that the world’s oceans was becoming dotted with ships loaded with Russian oil or gas looking for buyers[12][25]. Traders were concerned that other ports would follow the British example. Notably the dockers in France did not take action as UNISON and Unite members had done, but if they did, and the same took place in Germany, Italy or USA? What then?

Two days after the workers of Grain turned away the MV Boris Vilkitsky, on Sunday 6th March news broke that US Secretary of State, Anthony Blinken, was in ‘active discussions’ to ban imports of Russian oil with President Biden and US allies[13][26]. The idea clattered through the diplomatic corridors of the EU, Germany, the UK and other states as the Ukrainian President Zelensky called for it on his daily video broadcasts. The global price of oil instantly sky rocketed – hitting $139 per barrel, close to the summits that preceded the 2008 Crash.[14][27] European gas prices also jumped to a new record high of €239 per megawatt hour. A year previously the price was around €16.

The prospect of such price rises fills most of the economic ministries of the industrial world with horror and there was a notable backing away from the idea of an oil embargo in the days that followed, especially from the German government that is dependent on Russia for 49 % of it’s gas. The EU collectively receives 41% of its gas imports from Russia.[15][28] (Britain by contrast obtains approximately 3 to 4% of its gas from Russia.[16][29]) Then on Tuesday 8th March the UK announced that it would phase out all oil and gas imports from Russia by the end of 2022. And later on the same day came the dramatic announcement from President Biden that the US would embargo Russian oil. The governments of the West following the actions of the dockers of the Thames and Mersey taken five days earlier!

These weeks provide a rare window into the trade in physical oil and gas, into the dependency of economies on the transport of hydrocarbon molecules that takes place continuously. Night and day, every day of the year, with oil not only coming from Russia but also from places such as Kuwait or Nigeria, and gas coming from an array of states from Qatar to Peru. It is part of the conveyor belt that transfers carbon from deep beneath the lithosphere to high up into the atmosphere, passing through the engines of our cars or the cookers in our kitchens.

It is a conveyor belt that can and must be halted, and the dockworkers of Britain – acting for humanitarian reasons rather than climate reasons – have shown how it can be done. We need also to refuse this oil that fuels the war machine and at the same time refuse the hydrocarbons that feed the climate pyre.

As we pursue a Just Transition it is surely unlikely that this transition will come as a smooth orderly progression, rather it is set to be through a number of disruptive jolts. These shocks to Crude Britannia[8], like the storms that howl in from the Atlantic, will not come at a time or place of our choosing. What we are currently experiencing is one such shock and it is our task to support the moves to get off Russian oil and gas. But this withdrawal should not lead us to imagine we can replace it with oil and gas extracted in the UK, but use it as a stepping stone to getting off all hydrocarbons.

There is something unique about oil and LNG tankers among the systems that transport hydrocarbons, unlike undersea gas pipelines they are highly visible and these massive ships are vulnerable to acts of refusal. Might we imagine a future in which all oil and gas ships approaching UK ports are met by environmental demonstrators and turned away by Unite or UNISON members?

Thanks to Terry Macalister, Rob Noyes and Gavin Bridge

*

[1][30] https://www.thetimes.co.uk/article/ukraine-war-ship-brings-russian-gas-to-homes-in-britain-nd7pqgj5m#:~:text=The%20tanker%20carrying%20Russian%20liquefied,laws%20to%20bar%20Russian%20ships[31].

[2][32] https://nation.cymru/news/russian-gas-still-coming-in-through-welsh-port/

[3][33] https://www.birkenhead.news/tanker-with-cargo-of-russian-oil-berths-at-tranmere-oil-terminal/

[4][34] https://www.theguardian.com/business/2022/mar/06/ellesmere-port-cheshire-dockers-uk-refinery-ship-russian-oil

[5][35] https://www.theguardian.com/business/2022/mar/04/dockers-on-merseyside-refuse-to-unload-russian-oil-stanlow-kent-netherlands-ukraine?CMP=Share_iOSApp_Other

[6][36] https://www.reuters.com/article/us-india-essar-rosneft-idUSKCN1B10PL[37]

[7][38] https://www.marinetraffic.com/en/ais/home/centerx:4.8/centery:57.5/zoom:7

[8][39] https://www.energyvoice.com/oilandgas/europe/393257/greenpeace-russian-tanker-uk/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202022-03-08&utm_term=Energy%20Voice%20-%20Newsletter

[9][40] https://www.theguardian.com/world/2022/mar/02/pluto-tanker-oil-russia-uk-ban-loophole

[10][41] https://www.kentonline.co.uk/sheerness/news/russian-lng-tanker-turned-away-from-gas-terminal-263426/[42]

 

[11][43] https://www.theguardian.com/world/2022/mar/01/british-gas-owner-centrica-follows-bp-and-shell-in-cutting-russia-ties

[12][44] https://www.ft.com/content/a5ce82db-8d15-4c78-a539-403a9cab9114[45]

[13][46] https://www.ft.com/content/94b12297-b7c7-4923-9d95-86f196e90503

[14][47] https://www.ft.com/content/a44d9433-4391-44ba-ae8c-7edaadcb9fbc

[15][48] https://www.theguardian.com/commentisfree/2022/mar/09/addiction-russian-gas-putin-military

[16][49] https://www.energyvoice.com/oilandgas/europe/393257/greenpeace-russian-tanker-uk/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202022-03-08&utm_term=Energy%20Voice%20-%20Newsletter

Endnotes:
  1. MarineTraffic.com: https://www.marinetraffic.com/
  2. [1]: #_ftn1
  3. Nation Cymru: https://nation.cymru/news/russian-gas-still-coming-in-through-welsh-port/
  4. [2]: #_ftn2
  5. Marine Traffic: https://www.marinetraffic.com/en/ais/details/ships/shipid:6247977/mmsi:215573000/imo:9862346/vessel:PEARL_LNG
  6. Birkenhead News.: https://www.birkenhead.news/tanker-with-cargo-of-russian-oil-berths-at-tranmere-oil-terminal/
  7. [3]: #_ftn3
  8. Crude Britannia: https://johnsandoe.com/product/crude-britannia-how-oil-shaped-a-nation/
  9. Stanlow: https://www.youtube.com/watch?v=NnHTczRZbQw
  10. [4]: #_ftn4
  11. [5]: #_ftn5
  12. Essar in an earlier blog.: https://platformlondon.org/2021/10/04/profiting-from-the-panic-how-to-use-a-squeeze-in-the-oil-flow-to-financial-advantage/
  13. Tranmere Rovers: https://twitter.com/KickFossilFuels/status/1500057269979037696
  14. [6]: #_ftn6
  15. Marine Traffic : https://www.marinetraffic.com/en/ais/details/ships/shipid:151587/mmsi:218019000/imo:9352315/vessel:SEACOD#:~:text=SEACOD%20(IMO%3A%209352315)%20is,her%20width%20is%2032.23%20meters.
  16. [7]: #_ftn7
  17. MV Boris Vilkitsky,: https://www.marinetraffic.com/en/ais/details/ships/shipid:4068551/mmsi:212654000/imo:9768368/vessel:BORIS_VILKITSKY
  18. [8]: #_ftn8
  19. [9]: #_ftn9
  20. the dockers refused to unload her: https://www.unison.org.uk/news/2022/03/energy-workers-put-a-spoke-in-putins-war-machine/
  21. [10]: #_ftn10
  22. and risking disciplinary action,: https://www.unison.org.uk/news/2022/03/energy-workers-put-a-spoke-in-putins-war-machine/
  23. [11]: #_ftn11
  24. La Zad: https://platformlondon.org/2018/01/25/victory-at-la-zad-inspirational-resistance-through-community/
  25. [12]: #_ftn12
  26. [13]: #_ftn13
  27. [14]: #_ftn14
  28. [15]: #_ftn15
  29. [16]: #_ftn16
  30. [1]: #_ftnref1
  31. https://www.thetimes.co.uk/article/ukraine-war-ship-brings-russian-gas-to-homes-in-britain-nd7pqgj5m#:~:text=The%20tanker%20carrying%20Russian%20liquefied,laws%20to%20bar%20Russian%20ships: https://www.thetimes.co.uk/article/ukraine-war-ship-brings-russian-gas-to-homes-in-britain-nd7pqgj5m#:~:text=The%20tanker%20carrying%20Russian%20liquefied,laws%20to%20bar%20Russian%20ships
  32. [2]: #_ftnref2
  33. [3]: #_ftnref3
  34. [4]: #_ftnref4
  35. [5]: #_ftnref5
  36. [6]: #_ftnref6
  37. https://www.reuters.com/article/us-india-essar-rosneft-idUSKCN1B10PL: https://www.reuters.com/article/us-india-essar-rosneft-idUSKCN1B10PL
  38. [7]: #_ftnref7
  39. [8]: #_ftnref8
  40. [9]: #_ftnref9
  41. [10]: #_ftnref10
  42. https://www.kentonline.co.uk/sheerness/news/russian-lng-tanker-turned-away-from-gas-terminal-263426/: https://www.kentonline.co.uk/sheerness/news/russian-lng-tanker-turned-away-from-gas-terminal-263426/
  43. [11]: #_ftnref11
  44. [12]: #_ftnref12
  45. https://www.ft.com/content/a5ce82db-8d15-4c78-a539-403a9cab9114: https://www.ft.com/content/a5ce82db-8d15-4c78-a539-403a9cab9114
  46. [13]: #_ftnref13
  47. [14]: #_ftnref14
  48. [15]: #_ftnref15
  49. [16]: #_ftnref16

President Putin celebrates the start of BP’s Rosneft partnership as Bob Dudley, head of BP Russia, looks on . To the right, Igor Sechin head of Rosneft and closest ally of Putin – March 2013

Far from the terrifying realities of the shelling of civilians in Kyiv, Kharkiv and other Ukrainian cities, far from the desperation of women and children trying to board trains for Poland, far from the sickening din of armour in the streets, the guns the economic war are firing.

The bravery of Ukrainian citizens in resisting the tanks is astounding, and those in Russia demonstrating against the war[1] are utterly courageous. We oppose entirely the invasion of Ukraine and this brutal war, and we support the moves by western corporations to pull out of Russia. Yet it useful to explore the motivations and the history behind these boardroom decisions, behind these acts of economic war.

On Tuesday 1st March Bruno Le Maire, French finance minister said the West was using sanctions to wage “total economic and financial war against Russia, Putin and his government”. Le Maire asserted: “We will provoke the collapse of the Russian economy.”[1][2]

Dimity Medvedev, deputy head of Russia’s security council and a former Russian president retaliated “Today, some French minister has said that they declared an economic war on Russia. Watch your tongue, gentlemen! And don’t forget that in human history, economic wars quite often turned into real ones.”

If there is any truth in these statements, if these are the opening salvos of economic war, then who are the generals and where are the guns?

If one of the theatres of this war is the economy of Russia, then it is obvious that the commanding heights of the world’s largest exporter of gas and second largest exporter of oil, should be its oil & gas industry. If the economic war is to be effectively waged then it will be fought in the routes of trade and finance that surround the commodities of oil & gas. For it is these commodities that underpin the revenues of the Russian state. (It has arguably been the same in many conflicts over, or with, oil producing states, such as between the West and Iran.)

Who then are the generals and what the weapons? Since the sale of Britain’s controlling shareholding in BP in 1979, and since the privatisation of British Gas in 1986 and Britoil in 1988, the UK does not own a state oil & gas corporation. The generals in the oil war are not UK ministers but the chief executives of private corporations, such as BP, Shell, and Centrica. Government Ministers do not have control over a state corporation their power lies in persuading private capital to act in alignment with the state’s interests.

And these chief executives have taken surprisingly swift and decisive actions. Almost without precedent in their speed and scale.

Late on Sunday 27th February Bernard Looney CEO of BP announced the sale of its 19.7% share of Rosneft at a cost of $25 billion. For Rosneft is Russian state-controlled. Both Looney, and former CEO of BP, Bob Dudley have also resigned from Rosneft’s board.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said BP’s exit plan is unclear, but this was an “eye-wateringly expensive decision”[2][3]. She continued: “It looks like it will be highly difficult for the company to recover anywhere near what was considered to be the full value of the stake, estimated to be $14 billion at the end of 2021 and it will also strip BP of lucrative dividends which were due to pour in from the Russian business… Last year higher oil prices and foreign exchange tailwinds helped BP’s underlying profit from Rosneft rise to $2.7bn from $56m” BP’s share of Rosneft’s oil production amounted for about a third of BP Group’s global oil production.[3][4]

In announcing the move Looney said: “Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected. It has caused us to fundamentally rethink BP’s position with Rosneft.” Whilst

Helge Lund, the company chairman, stated: “Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region. BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change.”

BP’s move was echoed by other corporations.

The following day, Monday 28th February, Shell put up for sale nearly $3 billion of assets in Russia. CEO Ben van Beurden announced that it was selling its 27.5% in the vast Sakhalin II liquid natural gas project on the far eastern coast of Russia, as well as it’s 10% stake in the highly contentious Nord Stream 2 gas pipeline.[4][5] (The company behind Nord Stream 2 soon after declared it was laying off all its staff. We covered the role of this project in an earlier blog[6].)

“We are shocked by the loss of life in Ukraine, which we deplore, resulting from a senseless act of military aggression which threatens European security… We cannot – and we will not – stand aside.” said Ben van Beurden. Highlighting that such rapid sales would mean writing off capital he explained: “We expect that the decision to start the process of exiting joint ventures with Gazprom and related entities will impact the book value of Shell’s Russia assets and lead to impairments.”

On Tuesday 1st March it was the turn of Centrica, owner of British Gas and the UK’s biggest supplier of gas and electricity. Chris O’Shea, the chief executive, said: “We are shocked by the events unfolding in Ukraine and the needless loss of life … We intend to exit our gas supply agreements with Russian counterparts, principally Gazprom, as a matter of urgency.”[5][7]

Beyond the UK other oil corporations including Glencore, Trafigura, Equinor, ENI and ExxonMobil have followed suit. Many multinationals have declared they will cease sales in Russia, among them an array of car companies: BMW, Ford, Renault, Toyota, Mercedes-Benz, Honda, Bentley, Aston Martin, Harley-Davidson, Rolls-Royce, Volvo, Jaguar Land Rover and Volkswagen[6][8].

Meanwhile UK pension funds have responded to the UK government’s sanctions list and are divesting from Russian oil companies – at least 9 funds are doing so at the point of writing. And local authorities are asking for UK government assistance to extract themselves from gas supply contracts made with Gazprom. Arguably the most potent actions have been the US and EU sanctions against the Russian Central Bank, which restricts the banks access to many of its own reserves.

These are hugely significant maneuvers that are likely not only to impact on the Russian economy in the immediate term, but define the shape of western involvement in the Russian oil & gas industry long into the future. It seems that Russia may be being shunned, and if the military and diplomatic war continues over a long period, the economic war may shift Russia to become an ‘outsider state’ similar to Iran and Venezuela.

Bernard Looney, CEO of BP

Who made these decisions within the corporations? Who made these decisions within BP? If Looney announces the sale of Rosneft at $25 billion then it is inconceivable that this move can be agreed upon without the approval of the majority of the board. And who sits on the BP board? There’s the CEO Looney, the Chairman Lund, the Chief Financial Officer, Auchinloss and then seven non-executives. Significantly of the ten men and women (see below), only two describe their nationality as British, whilst there are four US citizens. This bears out BP’s insistence since the 1970s that it is an international corporation, not a British one. As we described in Crude Britannia[9], ever since the BP CEO refused to support Prime Minister Edward Heath during the ‘Oil Crisis’ of ’73, the board has only followed UK foreign policy moves when they suit the company.  BP’s actions may align with the UK governments view on Russia but it is not acting on behalf of the UK.

The most intriguing of the two British board members is Sir John Sawers, who joined BP in 2015, six months after having been head of MI6 for five years. Sawers made a rare appearance in the media on Wednesday 16th February[7][10] on Radio 4’s Today programme. He asserted that the risk of a ‘full-blooded’ invasion of Ukraine was never as high as it had been portrayed and had ‘receded’. He clarified that an invasion ‘would always have been a very risky course’ for Putin, and that Putin ‘will think he’s ahead on points’ by getting his security concerns back to the top of the agenda, intimidating Ukraine and reminding Europe how dependent it is on Russian gas. It seems reasonable to assume that was the view which was held by BP at that point in the crisis.

Sir John Sawers, former head of MI6, now non-executive director of BP

Just ten days later the company pulled out of Rosneft. Those ten days must have been ones of intense debate within BP as the executive team considered strategies for action. There would have been close conversation with analysts at the key institutional shareholders in BP, the top three being BlackRock, Vanguard Group and Norges Bank Investment Management. Perhaps there was sentiment among these American and Norwegian financiers to pull out? Perhaps Russian exposure had become an ‘ESG concern’ (Environmental, Social & Corporate Governance)? Certainly BP’s Investor Relations would need to ‘sell’ to shareholders the move to sell Rosneft. It could have been a hard sell to ditch such a lucrative arm of the corporation. Strong pressure from the UK government would help the company in this effort. State and corporate interests aligning.

On Friday 25th February, the day after the invasion, CEO Looney spoke with Kwasi Kwateng, Business & Energy Secretary. The breaking news from Jim Pickard at the Financial Times that evening was ‘Kwarteng summoned BP chief Bernard Looney this afternoon to explain why it owns a 20% stake in Rosneft, which provides fuel to Russian army’[8][11] Perhaps the Minister pressurised the CEO? Or perhaps the CEO informed the Minister of the decision he was coming to? Either way state and corporate interests aligned and the guns of economic war fired.

Kwasi Kwarteng, UK Business & Energy Secretary

All maneuvers in war are judgements of competing risks. BP has fought for 33 years with extreme tenacity to acquire and retain control over assets in Russia and the Former Soviet Union. As we document in Crude Britannia, Prime Minister Margaret Thatcher had a profound role in this, telling John Browne of BP in 1989 that Gorbachev – President of the Soviet Union – was ‘a man we can do business with.’ Within months BP was working to buy assets in Soviet Kazakhstan and soon after in Soviet Azerbaijan. At several points over the ensuing decades BP looked set to lose its stake in Russia at the hands of the oligarchs and the state. The company called to its defence the Blair government and in particular the skills of Peter Mandelson, a close confidant of John Browne. (Lord Mandelson had a long history of involvement in the Russian business sector, only withdrawing from being a director of the Russian conglomerate Sistema in the summer 2021[9][12].)

Arguably the most significant step was the TNK-BP deal in June 2003, signed in London between CEO John Browne and Mikhail Fridman of TNK. They were witnessed by Blair and Putin, who Browne described as the ‘godparents’ of the $8 billion investment. Browne wrote of the venture in his autobiography:

“This was huge deal – not just for BP and TNK, but for Russia and the UK. It was the largest transaction in Russian corporate history and the largest foreign direct investment in Russia. Both Putin and Blair were involved. I had already met Putin in Moscow well before he had a significant global profile. I met him again in the UK when he was staying with Blair at Chequers in December 2001. I went down to have a one-to-one meeting with him, as did the CEO from Shell. Putin was well briefed and knew a lot about BP and about me. He was very impressive. I remember thinking to myself: regardless of what this man stands for he is very impressive.”[10][13]

John Browne and Mikhail Fridman sign the TNK-BP witnessed by Blair and Putin, London, June 2003

Despite the support of Putin, five years later in the Summer of 2008, Bob Dudley, head of BP in Russia, was hounded by the state so intensely that he effectively went into hiding. And yet all through these battles, BP held onto its assets. Even when there was intense concern over the Putin government in Westminster and Washington, such as during the annexation of Crimea in 2014, BP held onto these assets. Why has the corporation relinquished Rosneft now?

The sheer gravity of the invasion, and the direction of travel for Putin’s government that it implies, can be felt in the shock behind the statements from Looney and Lund. The words of Sawers ten days earlier suggests that BP did not expect Putin to take this action. But beyond the sincerity of their sentiments, their fundamental concern is for the long-term profitability of the 7th largest corporation in the London Stock Exchange.

According to the research company Morningstar, BP’s stake in Rosneft had fallen in value from around $16.5 billion at the beginning of this year to $6bn following the invasion. For the value of Rosneft’s shares had collapsed shortly after February 11th. This was a company that was plummeting in value and any sanctions against Russia would drive its value even lower. It seems BP was leaving a sinking ship. Furthermore the longer term impact of selling $25 billion of assets at below market price can be hidden by the near term boost in profits coming from the spike in the global oil price to over $113 per barrel – a spike itself driven by the war in Ukraine. Certainly investment analysts seem to be judging that the sale is not badly impacting BP – the company’s share price dropped from 378 pence to 325 on the announcement, but within four days it had made that back entirely and was climbing higher.

Maybe the board of BP could see the writing on the wall and the possibility that the US could take out sanctions on any company trading with Russia? A rule similar to that has been applied to companies attempting to operate in Iran. Perhaps too board members feared that they could become the target of sanctions against individuals? In the manner that UK government and EU is imposing sanctions on specific Russian oligarchs. Such a prospect could be deeply embarrassing for a former head of MI6 who had been on the board of BP for seven years whilst it was one of the largest western companies in Russia.

This maneuver helps BP – and the other corporations that have followed suit – to be seen to be acting in the spirit of public opinion and governments in the West, especially important at a time when the movement against oil on the grounds of climate impacts grows stronger by the day. The Rosneft sale shows just how rapidly corporations can undertake potentially disruptive change, and in this illustrates how they have the capacity to cut loose from oil and gas production as we confront climate chaos. In selling Rosneft, BP is ditching approximately 1 million barrels of crude production a day, and a third of its global output.

Just as John Browne wrote of the TNK-BP signing –

“This was huge deal – not just for BP and TNK, but for Russia and the UK”

– the same can be said of the company’s withdrawal from Rosneft. It is a huge deal, and not just for BP, but for Russia and the UK.

*

Postscript 

A little more detail has emerged around the moments of BP’s decision to withdraw – as Tom Wilson and Jim Pickard of The Financial Times explain in a piece published 24th March:

‘Looney called a board meeting on Friday morning, where it was agreed that BP would immediately review the financial, legal and fiduciary implications of divestment. Later that day Looney had a video call with Kwasi Kwarteng, UK business secretary, on which the minister expressed his concern over BP’s Russian connections and whether Rosneft diesel was fuelling Russian tanks. Looney revealed little of BP’s plans, says a person close to the minister. “He did a lot of nodding and saying ‘yes. yes, yes, yes’.” The board reconvened on Sunday and chair Helge Lund announced BP’s exit hours later.

(https://www.ft.com/content/e9238fa2-65a2-4753-a845-ce8129f93a0)

*

Many thanks to Terry Macalister, Simon Pirani, Rob Noyes, Gavin Bridge and Grieg Aitken.

 

BP Board – March 2022

  1. Helge Lund – chairman – Norwegian
  2. Bernard Looney – CEO – Irish
  3. Murray Auchincloss – CFO – Canadian
  4. Pamela Daley – non exec – American
  5. Melody Mayer – non exec – American
  6. Tushar Morzaria – non exec – British
  7. Paula Rosput Reynolds – non exec – American
  8. Karen Richardson – non exec – American
  9. Sir John Sawers – non exec – British
  10. Johannes Teyssen – non exec – German

 

[1][14] Victor Mallet – ‘Medvedev warns on consequences of economic war’ – Financial Times 1.3.22

[2][15] https://www.energyvoice.com/oilandgas/europe/390981/bp-to-offload-19-75-stake-in-rosneft-looney-to-leave-russian-companys-board/

[3][16] https://www.barrons.com/articles/bp-stock-price-oil-output-russia-rosneft-51646089863

[4][17] https://www.theguardian.com/world/2022/feb/28/shell-to-exit-joint-ventures-with-gazprom-and-pull-out-of-nord-stream-2

[5][18] https://www.theguardian.com/world/2022/mar/01/british-gas-owner-centrica-follows-bp-and-shell-in-cutting-russia-ties

[6][19] https://www.ft.com/content/0f0030d6-b8bd-4122-921d-1369be6a5027

[7][20] ‘Ex-MI6 boss dismisses invasion’ – Metro – 17th February 2022

[8][21] https://twitter.com/PickardJE/status/1497270460396015621

[9][22] https://order-order.com/2022/02/24/mandelson-sold-his-russian-shares-before-they-collapsed/

[10][23] John Browne – Beyond Business, an inspirational memoir from a visionary leader – Weidenfeld & Nicholson, 2010 – p 146

Endnotes:
  1. demonstrating against the war: https://peopleandnature.wordpress.com/2022/02/28/russians-revolt-against-putins-war/
  2. [1]: #_ftn2
  3. [2]: #_ftn3
  4. [3]: #_ftn4
  5. [4]: #_ftn5
  6. role of this project in an earlier blog: https://platformlondon.org/2022/02/01/ukraine-the-grip-of-gas-caught-in-the-machine-of-crude-britannia/
  7. [5]: #_ftn6
  8. [6]: #_ftn7
  9. Crude Britannia: https://johnsandoe.com/product/crude-britannia-how-oil-shaped-a-nation/
  10. [7]: #_ftn8
  11. [8]: #_ftn10
  12. [9]: #_ftn11
  13. [10]: #_ftn12
  14. [1]: #_ftnref2
  15. [2]: #_ftnref3
  16. [3]: #_ftnref4
  17. [4]: #_ftnref5
  18. [5]: #_ftnref6
  19. [6]: #_ftnref7
  20. [7]: #_ftnref8
  21. [8]: #_ftnref10
  22. [9]: #_ftnref11
  23. [10]: #_ftnref12

Standing in the front benches of the Opposition in the House of Commons, Rachel Reeves, Shadow Chancellor of the Exchequer, declared “Citizens Advice have said they have seen a record number of people in January … Only today Shell announced that their profits had quadrupled to 20 billion dollars. They described the results as momentous, dividends up, profits up and people’s energy bills up too” She announced Labour’s plans would be to impose a one-off windfall tax on those excess profits.

Caroline Lucas MP speaking on the fuel poverty crisis and the Green New Deal – February 2022

Caroline Lucas, Green Party tweeted “Shell’s shareholders reap huge rewards while millions shiver because they can’t afford to heat their homes. There couldn’t be a clearer case for a #windfalltax on oil & gas companies to help struggling families” and released a video featuring herself and the Labour MP Clive Lewis demanding a Green New Deal.

Earlier in the press, Ed Milliband, Shadow Secretary of State for Climate Change & Net Zero, had said it “beggars belief” that the government was opposing a windfall tax on the grounds that the corporations were struggling. Explaining that Labour’s proposal of a £1.2bn levy on producers was to help households and businesses with soaring bills.[1][1]

In response Nadhim Zahawi, Education Secretary, remarked “What Labour are putting out just doesn’t add up. A windfall tax on oil and gas companies that are already struggling in the North Sea is never going to cut it.”[2][2] Zahawi, as was pointed out in the Press, is a former executive in the Gulf Keystone Petroleum oil company. (Meanwhile one of the contenders to be next Prime Minister is Liz Truss, the Foreign Secretary. Truss – as we explain in Crude Britannia [3]– is a former Shell executive.)

It is a perfect storm. At the precise point when Westminster and media concern about the Cost of Living is reaching a crescendo, Shell released its 4th quarter Financial Results for 2021. The fact that these two events should take place in the same moment is perhaps chance, but their coincidence reveals a stark truth – the injustice of the wealthiest corporation on the London Stock Exchange[3][4] making vast profits, while millions of British citizens are thrust deeper into poverty as a result of the escalating cost of a key commodity that Shell sells – gas.

What is Shell’s role in driving up the Cost of Living?

Shell was simply following its financial calendar, set down years in advance, which led the machinery of its internal accounting system to publish on the 3rd February 2022 the profit and loss for the months of September to December 2021 and the Full Year’s Results. The audience for this release is the financial sector, in particular the handful of oil & gas analysts who study the results and advise asset managers whether to buy, sell or hold Shell shares. (Arguably the world’s largest concentration of these analysts is in London.) Tjerk Huysinga, head of Shell Investor Relations team[4][5] must have had some hand in the press release, aimed at the financial media with the intention of stoking enthusiasm for Shell shares. The declaration that the results were “Momentous” served well to their target audience, but disastrously in Westminster and the political media.

Tjerk Huysinga, Vice President, Head of Shell Investor Relations division 

The $6.4 billion profits of Shell in the last three months of 2021 are driven by a multitude of factors. For here is Europe’s fourth largest corporation generating return on capital in over 100 states across world. Key among the drivers of profit is the global oil price which in the autumn of 2021 was hovering around $70 per barrel, a massive increase on $40 per barrel the previous autumn, which indicates in part the fact that the global economy is crawling out from the Pandemic slump of 2020.

The global price of gas is essentially pegged to the price of oil. When the price of oil falls, the gas price falls, when it rises, gas rises. This general pattern is compounded by the fact that gas can be more costly to transport across sea and land than oil is, and so the markets for gas tend to be defined by continents. There is an American gas market, a European gas market, and so on. Each of these can be affected by distinct circumstances, hence the impact on the European gas market of the conflict in the Ukraine[6]. The price of European gas was particularly high in the autumn of 2021 and hence particularly profitable to Shell. As the Financial Times reported, Shell’s annual earnings of more that $19bn were ‘driven by what one bank described as “monster” profits from its integrated gas division.[6][7]

If Shell makes money from selling this commodity at a high price to power stations and domestic users, where does it get it from?

Forty-three miles northwest of Lowestoft, off the Norfolk coast stand the platforms of the Leman field, operated by Shell and owned by Shell/Esso. (Esso being the UK arm of ExxonMobil that extracts oil and gas from the North Sea.) This was among the first fields to be discovered in British waters in 1964, during the early rush to extract fossil fuels from the rocks beneath the relatively shallow waters of the Southern North Sea – in the fishing grounds off the towns of East Yorkshire, Lincolnshire and Norfolk.

Gas fields of the Southern North Sea, with the pipelines running to the Bacton Terminal on the Norfolk coast

Natural Gas – an almost magical substance, a rock that is not solid, not liquid, but floats in air and can catch fire – began to be pumped out from beneath the seabed in 1969, away to the terminal on the coast at Bacton and from there into the National Grid pipelines. Although production at Leman is now declining, for over half a century Shell has extracted this fossil fuel and pushed it through the Shell owned terminal to homes and factories across Britain. Bacton is still owned by Shell and it is still the key lock in the channel between gas field and domestic central heating system. It processes gas from a wide array of fields in the Southern North Sea and, through the SEAL pipeline, bringing in gas from the Central North Sea east of Aberdeen. Many of the fields that drain through Bacton are Shell/Esso owned, but there are range of other corporations controlling these assets, such as Total, BP and Serica.

Further North still is the Langeled Pipeline arriving at a terminal in Easington, East Yorkshire after crossing 725 miles of seabed from Southern Norway. It ships around 20% of the UK’s supply and that is almost all drawn from the Ormen Lange gas field in Norwegian waters passing through the Nyhamna terminal. Both the gas field and the terminal are operated by Shell.

Shell asserts that it produces 10% of the UK’s oil & gas, but there is much disguised by this ballpark figure. It is the 4th biggest gas producer in the UK North Sea. (Yet this figure does not include the gas produced in Norway and imported via Langeled, nor the gas imported by LNG ship to terminals in Milford Haven or the Isle of Grain.) And the percentage of the Britain’s gas (and oil) produced by Shell in the UK North Sea will vary day-by-day as extraction in fields goes up and down, or the input to the grid by competing corporations varies. Shell is a highly significant player in the British market and, as the existence of the Bacton and Nyhamna terminals show, the corporation owns key parts of the UK’s system.

Furthermore, Shell is not only a wholesale supplier of gas to UK companies who then retail it to householders and the like, but it is also has a retail arm in its own right, in the form of Shell Energy, supplying gas and ‘100% renewable energy.’ The scale of Shell’s operation has grown rapidly since 2017[7][8] when it brought the company First Utility. Not least because it has absorbed the customers of other retail providers which went bankrupt in 2021 due to the rising gas wholesale prices. These include Colorado Energy, Daligas, GOTO Energy, Green and Pure Planet.

 

Section of the Shell Energy website reveals the companies that the corporation has recently taken over

In the storm around record profits and deepening fuel poverty, Ben van Beurden, CEO of Shell, pushed back in the Press, declaring “I’m not convinced that windfall taxes, popular though as they seem, will help us with supply, nor is it going to help us with demand.”[8][9] And he went further “I understand the concerns and I understand also the need for politicians to react . . . but I would say let’s take a very close look at what caused these problems”[9][10]

In this van Beurden is correct. We need to take a closer look at what is causing these problems. One of the causes is that Shell owns key parts of the UK energy system. For example, in Autumn 2021, when gas producers and wholesalers were driving up the price of gas by exporting from the UK into the European market – as we covered in an earlier blog[11] – they were doing it through one terminal, Bacton. This terminal is not under UK state control, but is owned by Shell.

At the heart of the storm comes the revelation that UK gas prices are set to rise a staggering 54%, whereas in France – for example – they will rise only 4%. Both France and the UK exist in essentially the same Western European gas market, effected by the same external impacts such as the threat of conflict in Ukraine. So the price of gas should be roughly similar in the two countries. But whilst the French government is intervening in the market to keep down domestic gas prices, the British acts to protect the profits of the gas suppliers. Partly this is as a consequence of the state no longer owning those key parts of the energy system, and partly because the imagination of Westminster has been captured by the private oil corporations. To the point where Nadhim Zahawi can refer to those ‘struggling oil & gas companies’.

The storm brewing is not just in Westminster and the Press, nor just in the Finance sector and the corporations, but in the country as a whole. The issue of fuel poverty has been campaigned upon for decades, particularly by such stalwart groups such as Fuel Poverty Action[12]. (https://www.fuelpovertyaction.org.uk/) Now it has captured public outrage and anxiety. Across Britain there are demands coming that action must be taken. Perhaps the first big showing of these demands will be the demonstrations set for this Saturday 12th February in at least London, Manchester and Bristol[10][13]. We urge you to give your support.

Fuel Poverty Action championing the rights of the fuel poor and calling for a day of action on 12th February 2022

Central to the demand to tackle fuel poverty, must be action by the government to press taxation on the oil & gas corporations. For as Tessa Khan of Uplift[14] recently stated: “In 2020, not only did Shell not pay any tax in the UK, the only country in which it operates where it didn’t, Shell picked up nearly £100m from taxpayers in rebates. Yet, even now, the chancellor is refusing to step in and try and claw some back with a windfall tax.”

However, we need to reach deeper beyond taxation, and think about ownership.

Shell has owned significant portions of this gas machine since the 1960s. How might this be moved from private profit-driven hands to public control, echoing calls to make similar changes to Britain’s rail industry? And how do we possess the gas system in our imaginations, just as we possess the railway system or the health service?

We explore these questions in Crude Britannia, asking of the Burbo Bank wind farm in Liverpool Bay:

‘Who owns this seascape?

The millionaire who brought it or we who are possessed by it?

What does it mean to be possessed by the sea?

What does it mean to take possession of the wind turbines that dominate this western horizon?’

For if we are to evolve the coming era of wind as a common wealth then we need to possess that system being built in our collective imagination. Striving to a point where ‘The People Will Possess the Wind’

In the immediate a further question remains. In order to prevent ourselves being at the mercy of profiteering by corporations such as Shell do we need to bring those North Sea gas fields into public ownership even as we bring them through a Just Transition to a shut down? Should we not begin by understanding how those systems work, by possessing them in our imaginations?

For the People to possess the gas systems.

 

With many thanks to Rob Noyes and Terry Macalister

*

[15]

[1][16] https://www.theguardian.com/politics/2022/jan/10/tory-rejection-of-windfall-tax-on-energy-firms-beggars-belief-says-ed-miliband?bingParse

[2][17] LBC – https://www.theguardian.com/politics/2022/jan/10/tory-rejection-of-windfall-tax-on-energy-firms-beggars-belief-says-ed-miliband

[3][18] 4.2.22 – see – http://www.stockchallenge.co.uk/ftse.php

[4][19] https://www.shell.com/investors/contacts.html#team

[6][20] https://www.ft.com/content/8ca8884e-464b-4f87-9adc-d6ea6f56d532

[7][21] https://www.theguardian.com/business/2017/dec/21/shell-to-supply-energy-to-uk-households-after-takeover-of-first-utility

[8][22] https://www.theguardian.com/business/2022/feb/05/40bn-profits-for-bp-and-shell-fuel-calls-for-windfall-tax-on-energy-firms

[9][23] https://www.ft.com/content/8ca8884e-464b-4f87-9adc-d6ea6f56d532

[10][24] https://www.unitetheunion.org/news-events/events/cost-of-living-crisis-join-the-protests/

[25]

Endnotes:
  1. [1]: #_ftn1
  2. [2]: #_ftn2
  3. Crude Britannia : https://www.waterstones.com/book/crude-britannia/james-marriott/terry-macalister/9780745341095?awaid=3787&utm_source=redbrain&utm_medium=shopping&utm_campaign=css&gclid=CjwKCAiA6Y2QBhAtEiwAGHybPQoGKZNAoylNQvgVr2zvp7zXyeM54Mdi8CF1FTs51d8IZpC6DA_w8xoCN7YQAvD_BwE
  4. [3]: #_ftn3
  5. [4]: #_ftn4
  6. Ukraine: https://platformlondon.org/2022/02/01/ukraine-the-grip-of-gas-caught-in-the-machine-of-crude-britannia/
  7. [6]: #_ftn6
  8. [7]: #_ftn7
  9. [8]: #_ftn8
  10. [9]: #_ftn9
  11. as we covered in an earlier blog: https://platformlondon.org/2022/02/01/ukraine-the-grip-of-gas-caught-in-the-machine-of-crude-britannia/
  12. Fuel Poverty Action: https://www.fuelpovertyaction.org.uk/
  13. [10]: #_ftn1
  14. Uplift: https://www.stopcambo.org.uk/
  15. : #_ftnref1
  16. [1]: #_ftnref1
  17. [2]: #_ftnref2
  18. [3]: #_ftnref3
  19. [4]: #_ftnref4
  20. [6]: #_ftnref6
  21. [7]: #_ftnref7
  22. [8]: #_ftnref8
  23. [9]: #_ftnref9
  24. [10]: #_ftnref10
  25. : #_ftnref11

Image of Ukrainian soldier at the country’s border with Russia – published by BBC January 2022

The newsfeeds hiss and rumble with stories of a possible Russian invasion of Ukraine.

We are all of us left waiting.

Is this truly going to happen, a military conflict between Russia and NATO? Or is this a fevered concoction that aids the Kremlin, the US Administration, and the UK’s flailing Prime Minister? Will the Russians undertake cyber warfare against the Ukrainian state? Or indeed against the UK, as is suggested?

Like a creature behind it all, the Leviathan of the gas supply system breaks surface.

Passing through the Ukraine are two massive pipelines, Bratstvo and Soyuz built during the Soviet Union, that transfer fuel from Russia to Europe. (We explored their history in The Oil Road.[1]) Will war disrupt these gas arteries that pump exports from Siberia to the West? If supply is reduced to states such as Germany, then this has an impact on the amount of gas pumped from Europe to the UK, and the wholesale cost of it. Will Europe and the UK be hit by a massive gas price hike? Will the US, Qatar and other liquid natural gas suppliers be able to ship sufficient loads to European terminals to make up for a loss of supply?[2]

Not only the gas system of the present, but that of the future becomes a weapon of war. The US pressures Germany to declare that the new Nord Stream 2 gas pipeline, built to pump fuel directly from Russia to Germany, will be blocked from its final moment of commissioning in the event of a Russian attack on Ukraine.[3]

 

Gas pipes awaiting use on the construction of Nord Stream 2 pipeline

And we are left waiting. Waiting within the machine of Crude Britannia.[4]

As the diplomats discuss the fate of the conflict, the reliability of gas supplies becomes a key pawn in the game. Prime Minister Johnson suggests that dependence on Russian gas is blunting German resolve to stand up to the Kremlin, but by the same token the UK’s gas supply comes into focus.

 

Gas pipelines coming ashore from North Sea fields at St Fergus and pumping into the National Grid – including gas from West of Shetland (Maps from ‘Crude Britannia’)

As you read these words, gas is being pumped from Foinaven field West of Shetland[5] 120 miles across the seabed to the terminal at Sullom Voe, through the FUKA pipeline to St Fergus terminal north of Aberdeen, and from thence into the National Grid. (This is the route that those who promote the Cambo project, intend for its gas to follow.)

Gas grid of pipelines on Merseyside

Gas is being pumped from the fields in Liverpool Bay to Point of Ayr[6] into the grid of Merseyside, and from the gas fields of the Southern North Sea to terminals at Teesside and Bacton in Norfolk.

Gas is being pumped from the fields off Norway through the Langeled pipeline to Teeside.

Gas is being pumped from the Shah Deniz field in the Caspian Sea of Azerbaijan via the Euro-Caspian Mega Pipeline[7] through Georgia, Turkey, Greece, Albania, Italy and then the through Western European grid in France and Belgium to the Interconnector under the North Sea to Bacton.

The gas grid in the Severn Estuary – gas pumped in from the LNG terminals at Milford Haven

Gas, frozen into liquefied form, is arriving by LNG ship at the terminals in Pembrokeshire and the Thames Estuary. The SCF La Perouse recently docked at the Isle of Grain terminal coming from Lake Charles in Louisiana, USA. The SCF Mitre[8] is soon to arrive at Milford Haven from Peru.

The gas grid in the Thames Estuary – gas pumped in from the LNG terminal at Isle of Grain

All of these systems are in the hands of a few corporations. Foinaven under BP, Sullom Voe under EnQuest, FUKA and St Fergus under the Kuwait Sovereign Wealth Fund. The fields in Liverpool Bay are under ENI, much of the Southern North Sea gas is Shell’s. BP has the controlling stake in the Shah Deniz field and the Euro-Caspian Mega Pipeline. Qatar holds one of the two LNG terminals in Milford Haven. BP has the keys to the Isle of Grain’s LNG supply.

 

The Euro-Caspian Mega Pipeline – made up up SCP, TANAP and TAL – pumping gas from Azerbaijan to Italy

Into this vast machine of gas, owned by an array of private companies, we have placed much of our fuel security. Energy for the heating of homes and the fuelling of power stations that provide over half our electricity. This dependency enables the corporations that extract gas, and the companies that supply it, and the dealers that trade in it, to profit from the sale of gas. Our needs for heat and light are subservient to their private drive for profit. A clear example of this is how those companies export gas at a time when apparently Britain is starved of it.

The government’s statistics show that 31,975 Gwh of gas was exported out of the UK through the undersea pipelines between September and November last year. Exported by the corporations that extract it and supply it, going after higher prices in Continental Europe. As Richard Black[9] – energy analyst and Director of the Energy and Climate Intelligence Unit – says, this is not ‘our gas’ but ‘company gas’. This export was taking place last Autumn when the UK’s gas prices were sky rocketing, and driving many of the smaller household energy supply companies into bankruptcy. A process that has led the Treasury to just announce a ‘super tax’[10].

(There was no consideration from the oil & gas corporations to assist the UK state at this critical time. Just as they had refused to assist the British government back during the ‘Oil Crisis’ of 1973 – as we detail in Crude Britannia.)

So the conflict in Ukraine threatens to impact on supply which drives up the price of gas, which in turn drives up the cost of electricity and household fuel, which in turn drives up fuel poverty. A year ago 13% of households in England lived in fuel poverty. In some places, such as North Liverpool, the figure was double that. And the numbers will be much higher this Winter.

In Liverpool, as in most UK cities, sixty per cent of CO2 emissions come as a result of household and business fuel systems. The plan of that metropolis, just published[11], calls for the removal of gas-fired boilers from 270,000 homes. Britain’s attempt to address climate chaos will lie, in part, in the struggle to step free from domestic gas systems.

Our dependence on gas for warmth, hot water and cooking is remarkably recent. Only in the mid 1970s was much of the UK plumbed into the grid from the North Sea fields.

We have allowed ourselves to become embedded in these structures of Crude Britannia. To be dependent on this machine in which we are living, to be dependent upon this technical enterprise of climate destruction.

To step out of this machine we need not to maximise extraction of gas from UK territory – onshore or offshore – in some bid to be ‘independent’ from imported gas. Such a policy would not deliver the promised ‘energy security’ and would run directly counter to our need to reduce oil & gas production in order to have any chance of meeting our CO2 emissions goals.

Rather we need to radically cut energy demand, partly by reducing domestic gas use through insulation that will also tackle fuel poverty. And we need to increase the level of energy drawn from renewables such as wind – and do this under public ownership is a manner that builds democratic control, and removes the drive to profiteer that we see in the example of gas trading. Private energy companies have no incentive to eliminate fuel poverty. After all, as the electricity cables to Europe are laid in an echo of the gas pipelines across the North Sea, we may also be subject to renewables corporations profiteering on wind energy as much as the oil & gas companies profiteer on their commodities.

We wait for the news from the Ukraine and all the while we can hear the machine in which we are living. The hiss of the gas on the cooker’s ring. The rumble of the boiler.

Time to stop waiting, time to take further steps out of Crude Britannia[12].

 

With thanks to Terry Macalister, Darren Bennett and Rob Noyes.

Endnotes:
  1. The Oil Road.: https://www.versobooks.com/books/1502-the-oil-road
  2. loss of supply?: https://www.theguardian.com/us-news/2022/jan/25/us-europe-russia-gas-supplies-energy
  3. attack on Ukraine.: https://www.theguardian.com/world/2022/jan/28/us-and-germany-step-up-pipeline-warnings-to-russia-as-un-meeting-called
  4. Crude Britannia.: http://www.plutobooks.com/9781786806390/crude-britannia/
  5. Foinaven field West of Shetland: https://platformlondon.org/2021/12/08/cambo-a-turning-point-for-the-north-sea-shell-departs-and-leaves-many-questions/
  6. Liverpool Bay to Point of Ayr: https://platformlondon.org/2021/11/05/how-to-capture-the-future-and-store-capital-the-plans-for-ccs-in-liverpool-bay/
  7. Euro-Caspian Mega Pipeline: https://platformlondon.org/2021/11/26/from-oil-road-to-fire-road-of-oil-pipelines-gas-pipelines-and-climate-chaos/
  8. SCF Mitre: https://www.marinetraffic.com/ka/ais/details/ships/shipid:2830563/mmsi:636016378/imo:9654880/vessel:SCF_MITRE
  9. Richard Black: https://twitter.com/_richardblack
  10. super tax’: https://www.theguardian.com/business/2022/feb/01/new-super-tax-to-deter-energy-firm-owners-from-gas-profiteering
  11. just published: https://www.liverpoolecho.co.uk/news/liverpool-news/liverpool-council-aiming-lead-zero-22613178
  12. Crude Britannia: https://www.waterstones.com/book/crude-britannia/james-marriott/terry-macalister/9780745341095

Vaila Mae sixareen fishing boat under sail in Shetland

In July 1881 a fleet of Sixareen boats were working the haaf fishing grounds 30 or more miles West of Shetland in the vast North Atlantic. Each craft twenty foot long, hand built from wood, with a crew of seven men fishing for Cod and Ling. This valuable catch was taken on lines of hooks, sometimes several miles long. Their position at sea, carefully chosen, was above a depth of around 96 fathoms of water (576 feet), at the very point where the continental shelf drops away. An area rich in sea life. A place to harvest the common wealth of the sea.

The crew of the boats had rowed out from beaches such as those at Uyea, working nine hours at the oars to reach the grounds. For over half this distance they were entirely without sight of land, guided only by a single compass bearing. On that fateful day a storm arose quite suddenly. Ten of the boats were swamped, with all hands lost, while others managed to hoist their square sails and run for the coast beyond the horizon.[1][1]

What is striking about this story is how it reveals that the crews had a remarkable sensitivity to the nature of the sea and the seabed – although the latter was, in these days before echo sounding, entirely invisible to them. They had a way of thinking and feeling the sea, built up from generations of experience. These were the days at the very beginning of the Herring Boom of the 1870s that industrialised methods of fishing, and transformed the economy of Shetland. A radical transition, driven by fossil fuels, in the shape of the coal-fired steam capstans that enabled boats twice the size of the Sixareens, but with the same number of crew, to haul aboard legendary netfulls of Herring. The technology had changed. The way of harvesting the common wealth had changed. And human sensibility of the sea, the way of thinking and feeling it, underwent a radical transition.

 

The Swan – a Zulu class Herring fishing boat.

By the end of the First World War, the Herring Boom had itself come and gone. But Shetland – like many fishing villages, towns and cities along the North Sea coast – would never be the same again.

The route taken by the Sixareens in 1881 passed over seabed that today is crossed by the West of Shetland Oil Pipeline. Despite its name, this steel pipe transports gas from the West of Shetland fields to the plant at the Sullom Voe Terminal in Shetland. (We explored the history of this oil province, and the fields of Foinaven and Claire Ridge, in our book Crude Britannia.[2])

[3]

Sullom Voe Oil & Gas Terminal in Shetland

Sullom Voe is the epicentre of Shetland’s Oil Boom from the early 1970s to the present, for the terminal was built to receive crude from several North Sea fields and enable the loading of tankers that distributed it around the world. The gas from West of Shetland that now arrives at Sullom Voe is exported through further pipelines – the SIRGE and the FUKA[2][4] – to the terminal of St Fergus, north of Aberdeen, and thence into the National Grid to fuel power stations and cookers in homes across the UK mainland. Both these gas pipelines, vital to Shetland’s economy, are owned by NSMP which is a private company, largely owned by the Kuwaiti sovereign wealth fund.

The Oil Boom that came in the 1970s is now going. And Shetland has been transformed by it.

West of Shetland oil & gas fields and the pipelines running to Sullom Voe

 

It had been intended that the West of Shetland Oil Pipeline would ship gas from the Cambo field to Sullom Voe. But last December the company developing that field, Siccar Point, announced it would ‘pause the project’. It is possible that Cambo will never be developed (as we explored in a previous blog.). This defeat of Cambo, will not only be about the cessation of one oil & gas field in a particular sector of the North Sea, but may mark the beginning of a shift away from all oil & gas extraction in the UK. This shift is heralded by the arrival of new energy systems, and possibly a Wind Boom.

Shetland’s energy story continues to unfold. Ten miles south-east of the Sullom Voe terminal, on the higher hills of the Mainland island of Shetland, Viking Energy is building a vast onshore wind farm. Even on a day of snowstorms that blank out the middle distance, access roads slicing across the moorland are painfully visible. Silver scars on the buff and greens of East Kame and Mid Kame, of Scar Quilse and Whaa Field. These slopes and streams are carpeted with a rich layer of stories and memories, hopes and desires, but they are treated by the construction company as void space, as terra nullus. Just as the sea, also rich in stories and memories, was seen as void space by those that planned and built the West of Shetland oil & gas systems.

Map of the layout of the Viking Energy wind farm at the heart of Shetland Mainland

After years of public debate and local dissent Viking started constructing the scheme in 2020 in the midst of Lockdown. It is set to be completed by 2024, when 103 wind turbines will have been erected. Each will stand 155 meters high and will thus be visible across most of Shetland’s Mainland. Viking estimate that the turbines will power 475,000 homes[3][5]. The scheme was originally part-financed by the Shetland Charitable Trust[4][6].

The Shetland Charitable Trust has its roots in Shetland’s oil. It is the product of a deal that Shetlanders won after a hard struggle with a set of oil corporations, led by BP, which effectively established a ‘sovereign wealth fund’ for the islands. It was a victory for local democracy unique in the UK, echoing the sovereign wealth fund established in Norway, and it has underpinned nearly fifty years of welfare spending in Shetland. Set up in 1976[5][7] it receives income from every barrel of oil (and its gas equivalent) that is shipped through Sullom Voe. And it spawned the legend that the islands’ have the highest number of swimming pools per head of population in the UK. The gas from Foinaven and Claire Ridge fields – among an array of others – underpins the income of Sullom Voe and its contribution to the Charitable Trust. Halting the development of Cambo might, in due course, impact on the income of the Trust. This is part of the burden of Transition that needs to be confronted and carried.

The strategy of the Trust is to invest in a combined heat & power scheme – Shetland Heat Energy and Power Ltd – and SCT Renewables Limited, which had a part share in the Viking Energy wind farm. This looks on the surface, to be a fine example of a Divest/ Invest strategy, a model of taking funds generated from fossil fuels revenues and investing them in renewable energy systems, and doing so by establishing companies under local democratic control.

But all is not what it seems with Viking Energy. The ability of the scheme to generate a return on capital at a level desired by its main investor Scottish & Southern Energy plc – SSE – apparently requires it to have a larger market into which to sell its kilowatts than that provided by the 23,000 inhabitants of Shetland. So after a prolonged battle SSEN – the transmission subsidiary of SSE – is laying two High Voltage Direct Current (HVDC) cables 160 miles from Shetland to the UK mainland. From a converter station by the wind turbines at Kergord, the cable will run down Weisdale Voe and across the seabed deep beneath the Atlantic currents to Noss Head Switching Station near Wick in Caithness[7][8]. By laying this cable SSEN effectively opens up the whole of Shetland to be utilised as an onshore wind farm and further schemes beyond Viking Energy are being delineated. Among these is the tidal power system currently being researched at Bluemull Sound by Nova innovation.

There are questions raised over the reliability of long distance HVDC cables and thus the building of onshore schemes among many island communities offshore from Scotland.[8][9] However the cable, like the gas & oil pipelines and steam capstans before it, is a piece of technology that looks set to transform Shetland.

 

Graphic of SSEN high voltage cable from Shetland to Caithness and beyond

The scale of the Viking Energy scheme, designed not to provide power just for Shetland but for export (like the Herring and oil & gas), effectively forced the Charitable Trust to withdraw. The budget of the project would have absorbed simply too high a proportion of the Trust’s capital. It had already invested £10 million. Thus in May 2019[9][10] participation in the project by a local body, at a level that would have enabled a significant degree of democratic influence, ceased.

This shift came in the midst of intense opposition to the scheme growing on the islands, particularly from the Sustainable Shetland group founded in 2008. The following year 3,600 Shetlanders signed a petition calling for the project to be scrapped[10][11]. Planning consent given by Scottish Energy Minister, Fergus Ewing, in April 2012 was challenged in the courts, though unsuccessfully. Many residents felt that not only was the wind farm set to be a massive intrusion on the landscape[11][12], but with the electricity being exported by cable to the UK, Shetland would effectively be turned into a colony of an energy corporation. In a tragic twist of fate, a scheme that was initially an expression of local democratically controlled renewables, had been turned into a means for SSE plc to generate return on capital.

Protest action at Kergord, Shetland in opposition to Viking Energy wind farm – August 2020

The debate around large-scale renewables is fraught. Opposition to wind farms and extensive solar arrays is often driven by climate sceptics and those opposed to renewable energy per se. And the debate can play into the hands of those that declare that we need to maintain UK oil & gas production as we are unable to depend upon wind and solar for our energy security. But as the example of Shetland illustrates, we would do well to listen carefully to the critics and to establish such schemes in the best possible manner. For projects such as Viking Energy will exist for at least a generation and their effects will be felt for far longer as they frame the way in which we address the massive challenge of facing the climate crisis.

It seems that the challenges of wind farms lie not only in the technology, but who owns that technology, controls it and profits from it, and the sensibility that surrounds its application. Viking Energy’s scheme is under the ownership of SSE and – although Shetland will receive an estimated £2.2 million per year revenue from it[12][13] – the corporation stands to generate the greatest profit. Furthermore, the HVDC cable is entirely in the hands of SSE, and this is set to become the main artery of Shetland islands’ energy future.

SSE approaches the scheme in manner akin to an oil & gas corporation. This is ‘oil thinking’ made manifest. It is no surprise that the chair of SSE since July 2020 has been John Manzoni, formally head of BP Refining & Marketing and then CEO of Talisman oil[13][14]. Additionally, this is a corporation that has already demonstrated its resistance to public control. SSE put itself into a Swiss-based holding company prior to General Election in 2019, anticipating the threat of nationalisation under a Labour government.[14][15]

Deeply involved in the debate around Viking Energy is Roxane Permar, an artist and a long-term friend of Platform, who lives ten miles south of the wind farm. In her project ‘Landscape in Pain[15][16]’ she asks:

‘How can we achieve sustainability in our lives, and leverage renewable energies, without causing harm?’

Image of Kergord Valley by the Viking Energy wind farm created by Roxane Permar as part of Landscape in Pain

In doing so she draws attention to the way in which such schemes are conceived, the sensibility that surrounds them. The manner in which all oil & gas in the UK North Sea has been extracted was deeply affected by the sensibility of how it was approached from its earliest days – as a source of private wealth not a common wealth, to be extracted at the highest profit with a low level of worker rights and ecological protection.

 

The tale of Viking Energy is sad and instructive, and an example of the teething problems of the new energy paradigm. It illustrates that the technological shift to zero carbon will not by itself make for a Just Transition, rather this requires a shift in the structures of ownership. A shift in the structures of thinking and feeling around energy, and wind itself.

The Wind Boom is underway, not just in Shetland but across the UK. (It is perfectly illustrated by the Crown Estate’s unveiling of its ScotWind licensing decisions.) It will transform so much, but the manner in which it is undertaken can still be formed. It must be approached with both a socially just and ecological sensibility. A new way of thinking and feeling, beyond ‘oil thinking’, that helps us share the common wealth of wind.

 

ScotWind offshore wind licensing areas auctioned January 2022

As Dr Alex Armitage, a paediatrician at Shetland’s hospital in Lerwick who campaigned against Cambo, recently stated “To reach net zero we must have a complete transformation of our society now.”[16][17]

This means demanding democratically owned renewable energy for all. As a basic human right.

 

Thanks to Roxane Permar, Gaby Jeliazkov, Jane Trowell and Terry Macalister.

 

[1][18] Story from Charles Sandison – The Sixareen and her Racing Descendants – Shetland Times press – Lerwick – 1994

[2][19] These are two of the key gas pipelines in the UK North Sea – FUKA (Frigg UK Association) and SIRGE (Shetland Island Regional Gas Export System) – both owned by North Sea Midstream Partners which is itself owned by the Kuwait sovereign wealth fund.

[3][20] https://www.vikingenergy.co.uk/the-project

[4][21] https://www.shetlandcharitabletrust.co.uk/[22]

[5][23] Originally it was titled – The Shetland Islands Council Charitable Trust

[7][24] See: https://www.ssen-transmission.co.uk/news-views/articles/2021/7/shetland-hvdc-link-project-onshore-cable-installation-gets-underway/

[8][25] See the study by Mark Hodgson – https://cliscep.com/2021/08/30/20000-volts-under-the-sea/#sdendnote3sym

[9][26] https://www.shetnews.co.uk/2019/05/30/sse-to-fund-viking-project-from-now-on/

[10][27] https://www.theguardian.com/environment/2009/jul/28/shetland-windfarm-protest-rspb[28]

[11][29] See: https://www.shetnews.co.uk/2020/08/07/jolly-summer-picnic-held-in-protest-against-viking-energy-wind-farm/

[12][30] https://www.shetnews.co.uk/2019/05/30/sse-to-fund-viking-project-from-now-on/

[13][31] See Crude Britannia – p 337

[14][32] https://www.reuters.com/article/uk-britain-election-sse-idUKKBN1XZ10P

[15][33] https://www.landscapeinpain.uk/about

[16][34] https://www.shetlandtimes.co.uk/2021/11/06/protesting-doctors-call-on-government-to-change-course-on-cambo

 

 

 

 

 

Endnotes:
  1. [1]: #_ftn1
  2. Crude Britannia.: https://www.waterstones.com/book/crude-britannia/james-marriott/terry-macalister/9780745341095
  3. [Image]: https://platformlondon.org/wp-content/uploads/2022/01/sullom-voe.webp
  4. [2]: #_ftn2
  5. [3]: #_ftn3
  6. [4]: #_ftn4
  7. [5]: #_ftn5
  8. [7]: #_ftn7
  9. [8]: #_ftn8
  10. [9]: #_ftn9
  11. [10]: #_ftn10
  12. [11]: #_ftn11
  13. [12]: #_ftn12
  14. [13]: #_ftn13
  15. [14]: #_ftn14
  16. [15]: #_ftn15
  17. [16]: #_ftn16
  18. [1]: #_ftnref1
  19. [2]: #_ftnref2
  20. [3]: #_ftnref3
  21. [4]: #_ftnref4
  22. https://www.shetlandcharitabletrust.co.uk/: https://www.shetlandcharitabletrust.co.uk/
  23. [5]: #_ftnref5
  24. [7]: #_ftnref7
  25. [8]: #_ftnref8
  26. [9]: #_ftnref9
  27. [10]: #_ftnref10
  28. https://www.theguardian.com/environment/2009/jul/28/shetland-windfarm-protest-rspb: https://www.theguardian.com/environment/2009/jul/28/shetland-windfarm-protest-rspb
  29. [11]: #_ftnref11
  30. [12]: #_ftnref12
  31. [13]: #_ftnref13
  32. [14]: #_ftnref14
  33. [15]: #_ftnref15
  34. [16]: #_ftnref16

 

Seven twenty in the evening of Thursday 2nd December the news breaks[1][1]: Shell announces that they are withdrawing from their joint venture with the company Siccar Point that intends to exploit oil in the Cambo field West of Shetland. The announcement is as dramatic as it is unexpected.

That same evening it is long since dark in the sea area 100 miles west of Shetland. A Force Four blowing South South West, cloud obscuring the moon. This wild space had been charted out as a place for petroleum exploration in the 1970’s and oil was first discovered in 1990 at the Foinaven Field, 35 miles south of Cambo. This cold sea lying midway between Shetland and Faroes had long been held in the human imagination as a place of birds and fish, ships and stories, a Whale Road. Following that discovery three decades ago it slowly turned, through processes of law and capital calculation, into a potential petroleum asset.

At some point in the future, perhaps we will see that Shell’s decision on the 2nd December marks a similar turning point in our imagination of this place?

Map showing the location of the Cambo oil field 100 miles west of Shetland

Shell’s announcement does not mean that the moves to extract oil from the rocks beneath those seas has stopped. The leading company in Cambo, Siccar Point, has declared its intent to continue, with the CEO stating “We remain confident about the qualities of the project”[2][2]. But the loss of Shell as a partner is possibly a lethal blow. Siccar Point could find a new partner, and is doubtlessly striving to do so now as you read this. And Shell will be endeavouring to sell its 30% in the project to another company. However it is possible that Cambo could become ‘soiled goods’ that are hard to sell on[3][3]. And possible that any new company will enter into the project on worse terms. This might mean that this venture, over its 25 year lifespan, will generate less profit. And as companies such as Siccar Point and Shell are only, ultimately, interested in profit, then the motivation to exploit Cambo is weakened.

For Siccar Point the loss of Shell is much more significant than the loss of 30% of the investment, as Shell brings to the venture things that Siccar Point doesn’t have – expertise to manage a project of this scale, and crucially social and political capital. Siccar Point is a newcomer to the UK North Sea, established only seven years ago. It may have the backing from private equity financiers Bluewater[4][4] in London and Blackstone in New York, and it may have among its staff executives who have long experience, such as CEO Jonathan Roger, who worked at Conoco for 12 years. But Siccar Point has nothing like the heft of Shell. This latter has a global reach, a market capitalisation that is vastly larger than Siccar whose finances may not be that robust – its pre-tax losses more than doubled in 2020.[5][5]

Over and above this, Shell has history and connections in Whitehall and Westminster. The company was in part born in London over a century ago, was in at the ground floor of the exploitation of the UK North Sea since 1964 and has been a dominant force in the ‘oil province’ ever since. Although the company has been steadily withdrawing from the UK over the last two decades[6][6], as we document in Crude Britannia[7], it still retains a hugely powerful position in the British polity. It can encourage the UK state to use its powers on the company’s behalf. And although Shell’s ability to do so has its limits, Siccar Point’s ability to bring in anything like that level of support is undoubtedly far weaker.

The backing of the UK state for Cambo is fundamental to the project taking place or not. It is the state that issues the drilling license and the state that approves the development plans that mark each step along the way to the carbon being pumped from beneath the seabed, onto the world market and into the atmosphere. Without the state’s approval then the project cannot go ahead. If the Oil & Gas Authority does not give its agreement to Cambo’s development plans then the project cannot go ahead. And if the UK government were to declare an end to licensing for oil exploration, then no more new fields would be exploited.

However the paradox is that the state in many respects is weaker than a corporation such as Shell, and arguably Siccar Point. It is so taken for granted that it is almost forgotten that the UK has no nationalised oil company. Since the privatisation of Britoil under Thatcher’s Conservative Government the state has no vehicle through which to raise the capital and start drilling wells. If private companies were not prepared to do this work, then the geology of the West of Shetland that has come to be known as the Cambo, one of the largest undeveloped oil fields in UK waters, would remain utterly untouched. And the corporations know this.

Jessica Uhl, Chief Financial Officer of Shell

We can speculate[7][8] for a moment about how the decision by Shell to withdraw from Cambo was made. The 30% stake that Shell held in Cambo was valued at around $800 million[8][9], so a decision not to go ahead must have been in part taken by the Chief Financial Officer (CFO) Jessica Uhl. (Shell may make losses as it tries to sell on its stake in Cambo and it is likely that Siccar Point will be able to enact a penalty clause for Shell withdrawing from the contract at this stage. The CFO will probably have to agree to a write down of capital in this way.) Zoe Yujnovich, Shell Upstream Director globally, was also surely involved as she oversees the work of Simon Roddy[9][10], head of Shell’s UK North Sea oil & gas operations. Ultimately the decision on Cambo was one with a high level of political significance and so would have been passed by the head of the company, Ben van Beurden. And the Shell UK County Chair David Bunch must have been informed.

 

Siccar Point CEO, Jonathan Roger.
Picture by COLIN RENNIE February 15, 2017.

All of these executives, meeting on line or in Den Haag, would have made this decision prior to informing their partner, Siccar Point. No doubt the news was met with dismay by the Siccar CEO Jonathan Roger – who told the press he was ‘disappointed’[10][11] – and the CFO Doug Fleming. Cambo is a tiny speck in the Shell empire – the oil field represents a fortnight’s worth of Shell’s total worldwide production and would be spread over a quarter of a century[11][12]. But it forms a highly significant asset in the oil & gas portfolio of Siccar. The failure of the project to go ahead may raise questions over Siccar Point’s viability as a company, its pre-tax losses in 2021 may well be greater again than in 2020.

However Siccar, backed by private equity is not a plc, and thus has no publicly traded shares. We cannot see the impact on confidence in the company from Shell’s decision. We can only guess at the views of Siccar’s investors at Blue Water and Blackstone. As we chart in Crude Britannia[7], decisions around capital become evermore hidden from public view as the realm of private equity grows.

(The announcement a few days after Shell’s, that Siccar was going to ‘pause’ the project, suggests that the two big investors in the company have concerns over the project’s viability, or at least the viability of the financial plan behind the project as it stands.)

Once Siccar had absorbed the news, perhaps in the week leading up to 2nd December, the rest of the world was informed. Who then in the UK government was the first to hear? And who informed them? And when? Was there direct communication to Secretary of State for Business, Energy & Industrial Strategy, Kwasi Kwateng? Or was it passed to a civil servant in his department who then briefed the minister? And when was the Oil & Gas Authority informed? Who was told first, Chairman Tim Eggar or CEO Dr Andy Samuel? What of Holyrood? When was the First Minister, Nicola Sturgeon, informed?

Inevitably these things are hard to ascertain – and will only become clear after patient pursuit of them through Freedom of Information Requests – but just a short reflection can lead us to see that the decision was made within Shell, and then within Siccar Point, and only then was the UK government informed. These are all players in a high stakes game. High stakes because the future of the whole of the North Sea province maybe impacted and especially because the UK government and Scottish First Minister had expended significant political capital around COP26 defining their positions in relation to Cambo. Johnson asserted in August that ‘we can’t just tear up contracts’[12][13] whilst Nicola Sturgeon stated after COP26 that Cambo ‘should not get the green light’. It is reasonable to assume that neither party considered that Shell would withdraw of its own accord announcing that ‘After comprehensive screening of the proposed Cambo development, we have concluded the economic case for investment in this project is not strong enough at this time.’[13][14]

The UK state has a role in establishing the ‘economic case’. Its power is to say ‘Yes you can drill in the North Sea, you can sink capital and we will endeavour to ensure that you will be able to generate return, that your investment will be sound.’ This is the capacity of the state, but the corporations have to believe that the UK has the power to deliver this assurance. Clearly Shell is unsure that the state can deliver, for perhaps civil society pressure, in the form of the #stopcambo[15] campaign and all the groups supporting it, is such that it will shift the state’s direction away from backing new oil & gas projects. The unexpected move in the position of Nicola Sturgeon over Cambo doubtless set concerns running within Shell. If the Scottish Government comes out increasingly against it, and the UK government is under pressure, then it becomes possible that the smooth progress of Cambo will turn into an extended battle. Such battles means delays, and these increase the cost of the venture. Shell alluded to this in the statement it released to the press, which talked of Cambo ‘having the potential for delays.’[14][16]

However Shell’s concerns about the UK’s capacity to deliver that desired ‘investment environment’ interplays with dynamics internal to the corporation. As Gavin Bridge, Gisa Weszkalnys and Tiago Teixeira explain in a recent piece: ‘Oil companies with multiple fields weigh up an investment case like Cambo against other possibilities for replacing reserves and reducing costs. One interpretation of Shell’s announcement is that it weighed Cambo’s potential returns against its reputational value, plus the cost of tying up capital in the long and contested process of developing a large oil project in the North Sea.’[15][17]

The news of Shell’s decision was met by calls that this was a threat to jobs in the offshore sector and pronouncements that the government and industry bodies such as Oil & Gas UK want to see a just transition in the North Sea. But the term ‘just transition’ is rapidly becoming utilised by the state and corporations to prolong ‘business as usual’ and to continue opening up new fields in spite of this being in clear contradiction of Britain’s declared commitment to keep within 1.5 degrees of global warming. Whilst Cambo would provide employment, the precarity of such jobs is highlighted by Shell’s decision – made without consultation with government or unions – and the possible insecurity of Siccar as the developer of the project over the long term. A true just transition would come from a collaboration between state and unions to ensure a level of planned investment in skills and infrastructure as we move the North Sea into a wind economy, a transition which is a managed decline and not a deferred collapse.

Meanwhile pressure on the UK state from civil society to stick to the Paris Agreement looks set to increase. Shell’s withdrawal will strengthen the resolve to push the government to halt Cambo, or at least make approval of development plans by the Oil & Gas Authority dependent on environmental safeguards that will further alter the costs of the project. On Wednesday 8th December #paidtopollute[18] saw its day of reckoning as the three plaintiffs, Mikaela Loach, Jeremy Cox and Kairin van Sweeden, took the government to court over subsidies paid to oil & gas companies extracting hydrocarbons from the UK North Sea. Pressure is building and it is possible that Siccar Point, and its’ investors Blue Water and Blackstone, will not be able to withstand civil society opposition to the exploitation of Cambo.

Perhaps as a result of those decisions made online or in Den Haag on the 2nd December, that sea space 100 miles west of Shetland will remain wild, and the rocks beneath it untouched, sleeping?

 

Log of the geology of the Cambo field

Log of the rocks in the Cambo field

Thanks to Rosemary Harris, Gavin Bridge and Terry Macalister.

Inspired by the work of Gisa Weszkalnys and Tiago Teixeira and Alex Dodge, Jake Molloy, RMT and Tessa Khan, Uplift

*

[1][19] See Platts – 19.21 – https://www.spglobal.com/platts/en/market-insights/latest-news/energy-transition/120221-shell-cancels-flagship-500-mil-barrel-uk-cambo-project-after-backlash

[2][20] FT- https://www.ft.com/content/8dd5e6d2-602a-4fcc-8cc2-2db6845b500d

[3][21] Siccar Point was on the brink of trying to sell a section of the project to another company, Neo, before Shell made its announcement.

[4][22] https://www.bluewaterpe.com/ – it should be noted that although Siccar is a relatively small company, its backers, Blue Water and Blackstone are major finance institutions and have oil & gas assets around the world.

[5][23] https://www.energyvoice.com/oilandgas/north-sea/west-of-shetland/322594/siccar-point-losses-widen-as-key-cambo-and-rosebank-decisions-await/

[6][24] Shell divested over $3.5 billion of UK North Sea assets in 2017.

[7][25] We have to speculate, for it may well be that the details of this decision will remain commercially confidential for many years hence.

[8][26] 30% of total cost of the project $2.51 billion – see: Analysis: UK North Sea’s oil and gas future darkens after Shell’s Cambo exit | Reuters[27]

[9][28] https://www.reuters.com/article/shell-moves-britain-idUSL2N2L20OP

[10][29] https://www.ft.com/content/8dd5e6d2-602a-4fcc-8cc2-2db6845b500d

[11][30] Shell: ditched Cambo project another bump on the road to net zero | Financial Times (ft.com)[31] 3.12.21

[12][32] https://www.heraldscotland.com/politics/19495173.cop26-cambo-oil-gas-field-contracts-cannot-torn-up-insists-boris-johnson/

[13][33] https://www.ft.com/content/8dd5e6d2-602a-4fcc-8cc2-2db6845b500d

[14][34] https://www.ft.com/content/8dd5e6d2-602a-4fcc-8cc2-2db6845b500d

[15][35] https://theconversation.com/why-shell-pulled-out-of-the-cambo-oilfield-173183

Endnotes:
  1. [1]: #_ftn1
  2. [2]: #_ftn2
  3. [3]: #_ftn3
  4. [4]: #_ftn4
  5. [5]: #_ftn5
  6. [6]: #_ftn6
  7. Crude Britannia: http://www.plutobooks.com/9781786806390/crude-britannia/
  8. [7]: #_ftn7
  9. [8]: #_ftn8
  10. [9]: #_ftn9
  11. [10]: #_ftn10
  12. [11]: #_ftn11
  13. [12]: #_ftn12
  14. [13]: #_ftn13
  15. #stopcambo: https://www.stopcambo.org.uk/
  16. [14]: #_ftn14
  17. [15]: #_ftn15
  18. #paidtopollute: https://paidtopollute.org.uk/
  19. [1]: #_ftnref1
  20. [2]: #_ftnref2
  21. [3]: #_ftnref3
  22. [4]: #_ftnref4
  23. [5]: #_ftnref5
  24. [6]: #_ftnref6
  25. [7]: #_ftnref7
  26. [8]: #_ftnref8
  27. Analysis: UK North Sea’s oil and gas future darkens after Shell’s Cambo exit | Reuters: https://www.reuters.com/markets/europe/uk-north-seas-oil-gas-future-darkens-after-shells-cambo-exit-2021-12-03/
  28. [9]: #_ftnref9
  29. [10]: #_ftnref10
  30. [11]: #_ftnref11
  31. Shell: ditched Cambo project another bump on the road to net zero | Financial Times (ft.com): https://www.ft.com/content/c457f627-23b5-4409-b3a9-b42c00eaa275
  32. [12]: #_ftnref12
  33. [13]: #_ftnref13
  34. [14]: #_ftnref14
  35. [15]: #_ftnref15

Platform is looking for a Communications Manager

Communications Manager is a new role in Platform. You will lead our organisation’s comms across all platforms including digital and press, helping us develop sharp messaging, a strong online presence and effective communication systems. You will work closely with project staff to create effective project comms and will also be required to take on some of the core tasks needed to keep our small, non-hierarchical organisation running e.g.sitting on the Management Group, relevant fundraising etc.

Job purpose To coordinate and support Platform’s communications work across all projects including digital comms and press work across all projects. To support Platform’s campaigns by carrying out communications work and supporting other staff in communications work.

Hours 4 days 32 hours per week based on a 40 hour week (open to 3 day per week applications).

Contract Permanent, subject to 6 months’ probationary period.

Salary Circa £34,650 per annum pro rata, depending on circumstances (see Terms & conditions below). Please note we are working towards a 4 day week with full time pay.

Location London / remote.

Post lockdown staff are now able to work in the London office again but are not required to. All staff will be expected to attend 8 in-person meetings per year. Most of these will be in London but some will happen elsewhere in the UK (travel will be paid for those outside of London). This is subject to review and if the Covid pandemic worsens meetings will switch to online.

Closing date 10am 28th February 2022

What we are looking for
Platform needs a Communications Manager who is great with words, media savvy and confident talking to journalists, a skilled social media user and a patient teacher of those who aren’t.

We’ve just finished writing Platform’s strategy for the next five years, and we’re excited to share our new ideas. Your first task will be to help us figure out how to communicate that strategy – both the framing and how we promote it. During your first year you will also coordinate the creation of a new Platform website, lead an overhaul of our communications systems and work with project staff to pinpoint how they can use comms to meet their project aims and deliver exciting and engaging content.

We are looking for someone who can demonstrate a clear aptitude for this type of work and the ability to develop the knowledge and skills where required. Please cite examples from outside of the formal employment if they are most relevant.

We would particularly like to encourage applications from people of colour / Black and Minority Ethnic (BME) people and/or people who identify as working-class/ from low-income backgrounds or who have done so in the past. This is because these groups are currently underrepresented in Platform. Where two or more candidates are judged to be of equal merit, priority may be given to a candidate who belongs to a less well represented group..

Let us know if there’s any reasonable adjustments you’d like us to make in the application and interview process in view of a disability or health issue.

For more information please download the pack here:

Platform Communications Manager 2021-2[1]

 

 

 

 

 

 

We are currently recruiting for new Trustees[2].

Endnotes:
  1. Platform Communications Manager 2021-2: https://platformlondon.org/wp-content/uploads/2022/02/Platform-Communications-Manager-2021-2.pdf
  2. new Trustees: https://platformlondon.org/2021/06/16/we-are-recruiting-for-new-trustees-at-platform/

Wildfires at Manavgat, Antalya, Turkey – 1st August 2021

Authored by James Marriott of Platform drawing on the collective experience of so many others in Platform and the multiple organisations we’ve collaborated with.

Prompted by an invitation from the Climate Cultures Festival[1] in Berlin to speak about Crude Britannia[2] and The Oil Road,[3] co-authored with Mika Minio-Paluello, I returned to the Baku-Tiblisi-Ceyhan Oil Pipeline and the Euro-Caspian Mega Pipeline[4].

Platform was among a host of groups and individuals – including The Corner House[5], Re:Common[6], Bankwatch[7], Friends of the Earth,[8] Green Alternative,[9] Kurdish Human Right Project[10] and Amnesty International[11] who worked hard to prevent construction of these pipelines between 2001 and 2017. We got close to stopping the Baku-Ceyhan pipeline, closer than we knew at the time. And we did ensure that some changes to the engineering and legal construction took place. But in the end this oil machine running through the mountains was opened in June 2006.

I took the chance to link up with allies Manana Kochladze in Georgia,  and Elena Gerebizza in Italy, and reworked a passage describing the journey of oil from the Caspian to Germany:

Map of The Oil Road – showing the passage of oil from Azerbaijan to Germany

 

‘DEUTSCHE TRANSALPINE OELLEITUNG GMBH’, proclaims the sign on the chain-link gates of a compound just north of the city limits of Ingolstadt, Bayern. This is the property of DTO, based in Munchen – one of three companies that own the Transalpine pipeline that runs from Italy, through Austria to Germany. The seven massive oil tanks of the Lenting depot were visible from some distance as we’d cycled here, nestled alongside the area’s third refinery, known as Kosching and owned by the Swiss company Petropolus[1][12].

The sun is hot on the surrounding fields of winter wheat. Despite the rumble of the nearby E45 autobahn, the noise of passenger jets passing overhead and the roar of the gas flare from the refinery, we can hear Skylarks singing.

There is no one at the entrance cabin of the Lenting depot, but somewhere on this site somebody is watching one of the meters that register the flow of the river that runs from the middle of the Caspian Sea to Southern Germany. At precisely this time, as we idle on the roadside, other people are watching meters in other control rooms in Sangachal – Azerbaijan, Ceyhan – Turkey and San Dorglio – Italy.

It takes minutes for the pressurised oil from the Pliocene sandstone layer to move up the riser to the drill deck of the Central Azeri platform in the Caspian Sea. Within the next few hours the oil has passed through the pipe across the seabed to the Sangachal Terminal on the coast of Azerbaijan. Here it is joined by oil that has been pumped in from Kazakhstan and Turkmenistan. A further ten days sees it move through the Baku-Tbilisi-Ceyhan pipeline, through the deserts and mountains, fields and villages of Azerbaijan, Georgia and Eastern Turkey. At Ceyhan it is loaded onto tankers. Four and half days aboard the ship and thousands of barrels are moved across the Aegean, Ionian and Adriatic seas. If this load is not delayed at the tank farm of San Dorligo near Trieste, it takes three days for the heavy liquid to be pumped over the Alps at the Plockenpass and the Hohe Tauern to Lenting. From the depot in front of us the crude passes to a refinery such as Kosching. Over a period of two days it will be broken down into heating oil, petrol or diesel – products that are then pumped and trucked onwards to factories, homes and petrol stations. Some of the crude is refined into aviation fuel and supplied to airports such as Munchen, where it might fill the tanks of a 747 bound for India. 

It takes twenty-two days for this process to run its course – for the oil to travel over 5,000 kilometres across the Earth’s surface, and for it to move from 5 kilometres below sea level to 10 kilometres above sea level; twenty-two days for geology laid down 4 million years ago to be incinerated into gas. The energy of those rocks takes seconds for the jets engines to burn. It is as though we are consuming time itself.

This machine drives forward minute by minute, hour by hour, a vast system transferring carbon from the lithosphere to the atmosphere.  

It has been fully operational for over fifteen years, since the Ceyhan terminal opened in June 2006. In that time the terminal has loaded five and half thousand tankers, carrying over three and a half billion barrels of oil, equivalent to over a billion tonnes of carbon dioxide.

A sizable proportion of those tankers have been aimed at Italy and the carbon has been released into the atmosphere over Germany.

 

[13]

Wildfires on Rhodos, Greece – on 1st August 2021

 

What struck me as I read this was how the world had changed since the terminal opened and The Oil Road was published in 2012.

Here was a project that was conceived during the last year of the Thatcher government, guided into reality under the Major government and was opened under the third Blair government. As we describe in Crude Britannia, BTC was fundamentally the child of BP CEO John Browne[2][14], but part-financed by a host of public and private banks in Europe, the USA, France and Germany.[3][15]

In the fifteen years since it opened many of the achievements of those UK governments have largely been discarded or forgotten. And attitudes to fossil fuels have shifted. For example on 3rd November 2021 at COP26 the UK, the US and 18 other nations signed a statement committing to end funding for foreign oil, gas and coal projects.[4][16]

But the BTC pipeline, the oil wells that fill it from Azerbaijan, Turkmenistan and Kazakhstan, and the tankers that fan out from Ceyhan – they all continue to operate. And they are planned to operate until 2047.

Alongside this Oil Road has been built a Gas Road. The Euro-Caspian Mega Pipeline[5][17] has been laid across Azerbaijan, Georgia, Turkey, Greece, Albania and Italy to pump gas into the Western European system – fuel for domestic stoves and power stations from Italy to Germany and beyond. Despite bitter opposition[18] – especially by citizens of Melendugno,[19] Southern Italy[6][20] – the last section of the pipe was opened only 11 months ago and is planned to drive fossil fuels into the European economy for several decades.

There are signs that the oil & gas industry is being forced to turn away from its impulse to continually expand – witness the civil society and now governmental pressure against new fields in the UK North Sea and the launch of the Beyond Oil & Gas Alliance [21]at COP26. But meanwhile this actually-existing oil system of BTC – like so many others – is set to continue to pump its carbon load into the atmosphere for another twenty-five years. The oil machine lumbers on.

And the impact of that carbon load is showing itself ever more clearly. Manana Kochladze explains to me: ‘Georgia becomes really sensitive due to climate change, in the last two years we have some fires in forests even in winter due to lack of water and snow’. In the Summer of 2021 there were wildfires throughout the regions through which the oil from the Caspian is passed on its way to Germany – in southern Turkey, Greece, southern Italy. It is as though the Oil Road is being turned into a Fire Road.

Wildfires at Otranto, Italy – 12th August 2021

How long will this continue? Will the ever-growing wild fires impact on the infrastructure itself? Or will they press so hard upon civil society and governments that they in turn will push for the system to be put out of use prior to its planned point of closure? Will there be a Just Transition to step back from The Oil Road and The Gas Road? How will it be decommissioned before its end of use? Will the pipelines be unearthed from the meadows and forests, the fields and villages, brought back into the daylight and discarded?

 

In honour of the work of  Elena Gerebiza, Nick Hildyard, Petr Hlobil, Emma Hughes, Manana Kochladze, Greg Muttitt,  Jo Ram, Sarah Shoraka, Antonio Tricarico and many others. And thanks to Ben Lennon, Mika Minio-Palluelo and Terry Macalister.

 

[1][22] The Kosching Refinery belonged to Petroplus when it went bankrupt and filed for insolvency on 24th January 2012 – after The Oil Road had been written. Kosching was acquired by the Swiss-based oil trading company, Gunvor on 24th August 2012.

[2][23] John Browne was CEO of BP from 1995 to 2007. He had previously been the head of BP Exploration & Production and was at the forefront of trying to obtain oil assets in Soviet Union just before its dissolution. After being forced to resign from BP, Browne went onto to be appointed by the Cameron-Clegg government to Lead Non-Executive Director of the Civil Service. In this role he oversaw the infamous Higher Education inquiry known as the Browne Review.

[3][24] Public banks: EBRD, World Bank/IFC, Hermes, ECGD, OPIC. Private banks: RBS, Societe Generale, Citibank, Hypovereinsbank, West LB

[4][25] https://www.worldoil.com/news/2021/11/3/cop26-us-uk-commit-to-stop-financing-foreign-oil-projects-china-abstains

[5][26] Also known by its constituent parts as the SCP, TANAP and TAP – see: https://bankwatch.org/project/southern-gas-corridor-euro-caspian-mega-pipeline

[6][27] The opposition was led by the No TAP alliance and several activists are facing court cases and requesting support for their legal costs. Please support them: https://www.facebook.com/MovimentoNoTAP

Endnotes:
  1. Climate Cultures Festival: https://www.planet-festival.de/
  2. Crude Britannia: https://www.waterstones.com/book/crude-britannia/james-marriott/terry-macalister/9780745341095#:~:text=Crude%20Britannia%3A%20How%20Oil%20Shaped%20a%20Nation%20(Hardback)&text=Taking%20the%20reader%20on%20a,soaked%20past%2C%20present%20and%20future.
  3. The Oil Road,: https://www.versobooks.com/books/1502-the-oil-road
  4. Euro-Caspian Mega Pipeline: https://bankwatch.org/project/southern-gas-corridor-euro-caspian-mega-pipeline
  5. The Corner House: http://www.thecornerhouse.org.uk/about/why-we-do-what-we-do
  6. Re:Common: https://www.recommon.org/en/about-us/
  7. Bankwatch: https://bankwatch.org/about/who-we-are
  8. Friends of the Earth,: https://friendsoftheearth.uk/
  9. Green Alternative,: https://greenalt.org/en/who-we-are/
  10. Kurdish Human Right Project: https://www.khrp.org/
  11. Amnesty International: https://www.amnesty.org.uk/?&utm_source=google&utm_medium=grant&utm_campaign=BRD_GEN_brand&utm_content=amnesty%20international
  12. [1]: #_ftn1
  13. [Image]: https://platformlondon.org/wp-content/uploads/2021/11/1.8.21_Fires-rhodes-credit-giannis-Ntellakis-facebook.webp
  14. [2]: #_ftn2
  15. [3]: #_ftn3
  16. [4]: #_ftn4
  17. [5]: #_ftn5
  18. opposition: https://counter-balance.org/news/trials-of-unequals-in-italy-over-the-trans-adriatic-pipeline
  19. Melendugno,: https://www.facebook.com/MovimentoNoTAP
  20. [6]: #_ftn6
  21. Beyond Oil & Gas Alliance : https://beyondoilandgasalliance.com/
  22. [1]: #_ftnref1
  23. [2]: #_ftnref2
  24. [3]: #_ftnref3
  25. [4]: #_ftnref4
  26. [5]: #_ftnref5
  27. [6]: #_ftnref6