The dockside of the oil terminal on the River Ness, in Inverness, Scotland

The words of Sir David King, head of the Climate Crisis Advisory Group[1], haunt me. Speaking at the launch of The Oil Machine [2]film, he explained his view on what has been taking place since 2019.

“What we have experienced in the last three years is a series of extreme weather events around the world, in particular in the northern hemisphere. This can be related to is what has happened in the Arctic Circle region. Over the last 15 years the Arctic Circle has suddenly been heating up at a rate of about four times the rate of the average for the rest of the planet … the weather systems of the world are already in transition…. I would see that none of the climate scientists predicted the rate of the loss of the ice in the Polar Region. Greenland is now losing its ice irreversibly. Ice on land when it gets lost puts water into the ocean, and that will raise sea levels globally eventually by 7 meters, 24 feet. So what we are doing is changing the map of the world, and losing cities sitting on coastlines around the world.”

If sea levels are to rise by 24 feet, then what does that mean for Inverness[3], where I’m attending a screening of The Oil Machine at Eden Court[4] arts centre?

Built at the northern end of the Great Glen, the city stands where the River Ness flows into the Moray Firth, that long arm of the North Sea. Inverness is the UK’s most northern city. Though it does not cast itself as ‘an oil city’ like Aberdeen, it has played, and continues to play, a vital role as a logistical hub for the exploitation of offshore oil and gas. It is a key transport node for road, rail and air. It is home to the region’s main hospital and administrative centre for The Highland Council as well as the base for an MP and MSPs of much of northern Scotland. And over the last two decades it has become seedbed for the renewables industry – onshore wind, offshore wind and wave energy.

Inverness High Street at the edge of the 24 foot tide line

I decide to walk a line through the city following the height of 24 foot above sea level. It seems harder to determine this than I had imagined. (Surely there must be an app that will tell me such a thing? I fail to find it!) I read and follow the contour lines on the most detailed OS Map as it snakes through the centre of Inverness. It passes through buildings on a curiously meandering route, but allows me to begin to sense the rise and fall of the land. Along Academy Street, the spine of the 18th century town. Down the side alley of Fraser Street running towards the River Ness swirling and pulsing between its stone embankments.

I’ve passed through this city myriad times since the age of four, but I’ve never been so aware of the lie of the land. The great escarpment on which the castle stands, and St Stephen’s Church, built looking over the town spread out on the flat land before it. My sea rise contour line takes me past Zizi and Primark, Private Eyes gentleman’s club and Esco tequila bar, Costa and M&S, Morrisons and Eastgate Shopping Centre, Mercure Hotel and the street market stalls in Eastgate. Will all of this be lost to the sea? How could  that happen?

As I’m walking, I’m wondering what does David King mean by 24 feet? Is that 24 feet above the current high tide mark? Or the mid tide mark? And then surely there’ll be days of exceptionally high tides, Spring Tides, and days of very low high tides, Neap Tides? And of course a high tide might come with a storm – the east wind driving the waves higher. Far higher than that 24 feet tide line.

The ocean crashing in. The wind howling. The town retreating behind sea walls. The valley of Millburn – now home to a Premier Inn and estates of detatched houses – becoming an inlet of the sea.

On, on, down the B865, thick with traffic pounding alongside the railway line. Will the line and the station be lost? And beyond it the Stagecoach bus terminal. That too?

I turn into Harbour Road and enter the wide zone of Longman Industrial Estate. This is a cornucopia of carbon culture. All the world’s goods are here. Or at least all the world’s cars. Showrooms full of Jaguars and Land Rovers, Skodas and VWs, Peugeots and Citroens, Mazdas and Mitsubishis, Mercedes and Audis, Hyundais and Hondas, Renaults and Dacias, Fords and Vauxhalls, Volvos and Toyotas. The list goes on.

At the end of this avenue of plate glass and polished paintwork come the petrol stations Gulf, BP and Esso. Like the forecourt at Morrisons’, these filling places are supplied with fuel. But from where? At the Gulf petrol station the helpful woman in the kiosk, when asked where the fuel comes from, replies with a single word: “Inverness”. More exploration is required.

The Caledonian Oil and Certas terminal at the Inverness dockside

Google maps reveals the Caledonian Oil and Certas Energy terminal, west down Harbour Road. Walk a little further and here are the great off-white tanks where the petrol and diesel is stored. An import terminal previously owned by BP. Here, behind locked gates, is the forecourt where are parked road tankers with the livery of Tesco and Certas. The flow of oil is revealed. This depot is supplied by sea tanker. The dockside just across the road, on the banks of the swirling River Ness. Long arms of the pumping system stand idle, waiting for a ship to arrive. Swiftly it will be unloaded, the fuel passing through pipelines under the road, to the oil tanks at the depot. Here the road tankers will fill up and fan out, carrying their loads across the city and across the Highlands. Petrol and diesel for the myriad cars and vans, trucks and tractors of Northern Scotland.

Who owns these road tankers? And who owns the petrol stations they deliver to? Who profits from this system of supply? This is more complex than it seems as Terry Macalister and I explore in our book Crude Britannia[5]. The petrol station with a BP logo is more likely to belong to a company such as the US based MFG than BP. The tanker branded Tesco is more likely to belong to the German multinational Hoyer than to Tesco. All of these companies, not just the oil companies and the supermarkets, have an interest in maximising consumption by the motorists at the pump.

Where exactly the fuel delivered in the sea tanker comes from is far harder to predict. Possibly from the refinery of Grangemouth, just west of Edinburgh? But it may well come from far further afield. From refineries in Rotterdam or perhaps India? Almost anywhere across the globe. There is only a small chance that this is petrol produced from crude drilled from beneath the North Sea off Scotland.

The MV Mersey Fisher – an oil products tanker that delivers to Inverness from Immingham

(Two days later, passing through the Longman Industrial Estate on a bus, I spot the bridge of a ship moored at the dockside. A quick search on MarineTraffic.com reveals it to be MV Mersey Fisher, registered in Gibraltar. She arrived at 22.45 the previous night and had departed from Immingham 47 hours earlier. There she loaded products from one of two small refineries, the Lindsey Refinery owned by Prax or the Humber Refinery owned by Phillips 66. Each of these could have been processing crude oil shipped in from anywhere in the world.)

What we can be sure of is that this sea tanker load of fuel was bought and sold on the international commodity markets – and in particular the oil markets, mainly based in Singapore, Chicago, New York and London. Traders make vast profits on the buying and selling of a tanker load of petroleum products such as those that moor at the Ness dockside and unload their cargo into the bloodstream of the Highlands. These traders too have an interest in maximising consumption by the motorists at the pump.

I think again of the words of David King. The knowledge that the seas will rise, accompanied by greater storms. That the lowest lying land around Inverness is this dockside where the river spills into the ocean. Next is the Harbour Road lined with its avenue of car showrooms. Then the shopping streets, with the big chain stores and cafés, the station and the bus terminal.

It is a painful irony that the parts of the city most embedded in the distribution and consumption of oil, most embedded in The Oil Machine, are the most under threat from the chaos of the climate.

 

Thanks to Terry Macalister, Ben Kempas, Emma Davie, Sonja Henrici, Rachel Caplan, Paul MacDonald-Taylor and Annie Brooker.

Endnotes:
  1. Climate Crisis Advisory Group: https://www.ccag.earth/
  2. The Oil Machine : https://www.theoilmachine.org/
  3. Inverness: https://www.visitscotland.com/destinations-maps/inverness/
  4. Eden Court: https://eden-court.co.uk/
  5. Crude Britannia: https://www.crudebritannia.co.uk/

Enough is Enough! march coming down Chatham High Street, Saturday 1st October 2022

 

Down the canyon of Chatham High Street comes the march. Banner of Medway Trades Council proudly to the fore. Chants and shouts echoing off the shopfronts and the buildings above. “Enough is Enough! Enough is Enough!”

Past the pound shops and the charity shops. Past the boarded up windows and the off licenses. Through the battered heart of Chatham. “Tories! Tories! Tories! Out! Out! Out!” 

The march, perhaps 150 strong, has made its way two miles from Gillingham. It turns onto the open ground of The Paddock and the rally begins. 

Enough is Enough! rally on The Paddock at the heart of Chatham, Kent – Saturday 1st October 2022

Mic in hand, RMT branch secretary Ivor Riddell, bellows at the crowd with a cheeky smile. Shouting “Enough is Enough!” Back comes the defiant response “Enough is Enough!” 

There are banners and organisers here from the trade unions – the RMT and CWU – railway staff, BT workers, Posties. There’s a message of solidarity from the train drivers – ASLEF. Later the crowd is addressed by Labour MP Barry Gardiner[1] and Vince Maple,[2] leader of the Labour & Co-Op Group on Medway Council.

This demonstration is part of a co-ordinated wave of similar actions in over 50 cities across the UK, in Glasgow, Edinburgh, Luton, Plymouth, Brighton, Norwich, Liverpool, even Ramsgate. The main event is in London where a crowd of around 10,000 gathered outside Kings Cross Station to hear speakers such a Mick Lynch, General Secretary of the RMT.

As those that take the mic at the heart of Medway spell out, the Enough is Enough! campaign[3] has five demands to tackle the Cost of Living Crisis:

  1. Slash energy bills
  2. A real pay rise
  3. End food poverty
  4. Decent homes for all
  5. Tax the rich

The march and rally in Medway is smaller than hoped. It seems the truly dedicated and organisers from the major unions and the local branch of the Labour Party are here. But it is a significant event – a show of strength in a town that seems to rarely show its muscle.

It reminds me of demonstrations in the 1980s. And the closer I look at the days we are going through now, the more they bear instructive comparison to that decade.

Much has been made of (now former) Prime Minister Liz Truss’s evocation of Margaret Thatcher. In dress sense, in iconic photo opportunities and in her attempt to show resolute determination.  Trying to emulate the spirit of ‘The Lady’s not for turning.’ And many spoke of (now former) Chancellor Kwasi Kwarteng’s ‘mini-budget’ as being an echo of the 1980s –  tax cuts for the very wealthy, and welfare spending slashed further. Many of the ideas behind what became know as Thatcherism arose from the work of ‘think-tanks’ such as the Institute of Economic Affairs, whose policies were nurtured and financially assisted by the likes of Peter Walters, Chairman of BP – as we explored in our book Crude Britannia[4]. The same think tanks are behind ‘Trussonomics’ fifty years later.

Sir Peter Walters, chairman of BP and trustee of the Institute of Economic Affairs – close ally of Margaret Thatcher.

But the dissimilarities with the 1980s are clear too. Not just in Truss and Kwarteng’s now infamous U-Turns, and subsequent downfalls, nor in the degree that the Conservative MPs and Truss’s Cabinet itself are so clearly riven by factions. 

Deeper than this, when the Conservatives won the 1979 General Election they did so with a landslide. Thatcher had the mandate of a majority of 44 seats and 13.7 million votes from the entire British electorate. Truss had no such mandate, having gained her position on the back of 57.4% of Tory Party members – a mere 81,326 votes. (Rishi Sunak has been chosen by around 200 MPs out of a potential 365.) Truss came to power after 12 years of the Conservatives having been in government. Thatcher came to power after five years of Labour rule and the infamous ‘Winter of Discontent.’

And the shape of the economy is utterly different. The Conservatives in 1979 had a huge base of state owned assets to sell, in particular in the energy sector – from the CEGB (the monopoly electricity generator), to British Gas and BNOC (the state oil & gas company). The sale of these corporations brought the state an income of billions. Alongside this, North Sea oil & gas production was rapidly coming on stream and the level of revenue to the Exchequer was steadily rising. Much of the radical social and political change instituted by the Conservative government was enabled by finance from oil & gas assets. As has been said from many quarters, Thatcherism may well have been impossible without North Sea oil.

Nothing like that exists now. There are precious few state owned assets for the government to sell – certainly none in the energy sector. Production of oil in the North Sea is a fraction of what it was, and the tax revenues from this oil are negligible. Indeed the state is underpinning production with subsidies rather than reaping revenue. A state of affairs brilliantly explored by Uplift. [5]  

If part of what made Thatcherism possible was money from North Sea oil, then perhaps part of what made Trussonomics impossible was a lack of money from North Sea oil? 

 

UK North Sea oil & gas production and revenues from 1973 to 2019

 

What of the relationship between the oil & gas sector and the Truss government’s Libertarian turn? The CEO of Shell, Ben van Beurden, gained some media coverage from his comments that appeared to criticise the Prime Minister and Chancellor’s move to cut taxes on the wealthiest.

Speaking at the Energy Intelligence Forum in London on 4th October he said:

“One way or another, there needs to be government intervention… that somehow results in protecting the poorest. And that probably means governments need to tax people in this room [of energy company executives] to pay for it – I think we just have to accept [that] as a societal reality.”

And van Beurden foresaw rising energy prices and volatility saying:

“You cannot have a market that behaves in such a way … that is going to damage a significant part of society”

Such a direct and public intervention by a head of an oil corporation in UK domestic politics is rare. So why now? Why did Shell choose to speak out at this point? 

Ben van Beurden – CEO of Shell

It is instructive to look at how the oil & gas corporations might have been impacted by the Truss government’s intention to reduce taxes on the wealthiest while cutting spending on welfare and – at best – freezing them on education and the NHS. We can almost be guaranteed that all of those in the Energy Intelligence Forum gathering van Beurden spoke to were above the much talked of £155,000 per annum wage level and so stood to benefit from the tax cuts. (Van Beurden’s salary in 2021 was £6 million. He and Bernard Looney, CEO of BP, were set to save a combined £640,000 from the planned tax cuts, as revealed by Global Witness.[6])

Whereas in the 1980s BP and Shell (in a joint venture with Exxon) were the dominant players in the UK North Sea, they are very much smaller today. Shell sold many of its assets to Harbour Energy (now the UK’s largest producer) and BP represented less than 9% of the UK’s oil production in 2020. BP has larger assets in Azerbaijan, Mauritania and Senegal than in the UK.

Shell, BP and all the smaller corporations extracting oil or gas offshore have very few directly employed staff in the UK, and therefore these companies are cushioned from the impacts of decline in the condition of the UK’s health service and social provision. 

Van Beurden’s concern about the impact of price hikes on UK citizens might seem self-serving and be driven by a concern that gas consumption or petrol sales to business and households will impact on Shell’s sales and profits. But the scale of Shell’s gas sales – both wholesale and retail – into the UK market is a fraction of its global sales. The same can be said of petrol. Despite there being 1,100 branded Shell service stations in the UK, the vast majority are not company-owned and the fuel they sell is mostly not delivered or even refined by Shell. Thus the rising prices of petrol at the pump, due to inflation or the collapse in the value of the pound, will not impact Shell.

The key value of the UK to Shell and BP today is as a place of oil trading. The site of their wealth extraction in the UK is not on the forecourt, nor the household gas bill, nor the refinery or the offshore platform, but in the City of London. If Azerbaijan, Angola or the Gulf of Mexico are oil & gas production nodes in the global production networks of BP and Shell, then London is a finance and trading node alongside New York and Singapore.

The Chancellor’s mini-budget on 23rd September was derided in the press as ‘a bankers budget’ in that it was set to reward those working in finance. (Indeed, although there has been a U-turn on the 45p tax rate, to date the new Chancellor Jeremy Hunt has not lifted the limits on ‘bankers bonuses’.)  

If the mini-budget (and most likely whatever replaces it with on 31st October) aimed to reward those working in finance and encourage the growth of the finance sector (or at least defend it in a ‘Post-Brexit World’), then this will place greater emphasis on financial trading in the UK economy. And this is a direction of travel that neatly coincides with the priorities and desires of the likes of BP & Shell when they look to the UK.

And this direction of travel brings us back to the 1980s. For it was in that decade, especially though the abolition of exchange controls in October 1979 and the removal of structures of finance in The City through ‘Big Bang’ in October 1986, that arguably kept London as a global finance hub. The City changed, but it maintained (and reinforced) its dominant position in the UK’s economy. Elsewhere in Britain, regions changed, but have never recovered.

Demonstration against the proposed closure of Chatham Dockyard – 1981

Those shifts are graphically demonstrated in the Thames Estuary and particularly in the area around the Medway. When the Thatcher Government came to power, 16,000 worked in Chatham Royal Navy Dockyards. It was a massive industrial complex underpinned by oil. Indeed the complex included both a terminal for North Sea gas and an oil refinery – the BP Kent Refinery on the Isle of Grain. This plant’s large workforce lived in the towns and villages on the Hoo Peninsula and in Medway. They were part of the great army of staff across Britain working directly for BP, as well as Shell and other oil & gas companies, whose livelihoods were underpinned by the UK’s welfare state, its schools and hospitals, its unemployment benefits and elderly care.

On 25th June 1981, barely two years after the Conservatives came to power, news was leaked that Chatham Docks would be shut. Eleven days later 4,000 dockworkers were joined by thousands of residents from Medway Towns in a demonstration against the planned closure. But the process of deindustrialisation was not halted. Perhaps the most significant foundation stone to go was BP’s Kent Refinery, shut down on August 27th 1982 by the then Chairman of BP, Peter Walters. Soon after the rest of the industrial edifice of Medway crumbled. The Docks were closed in 1984. 

The rapid change was a huge blow to the regional economy – industry was leaving the area behind. And it has still not recovered. Medway Towns, with a population of 270,000 currently has 8 food banks. Medway was listed as the 93rd most deprived local authority in England out of 317. And it has fourteen neighbourhoods ranked among the 10% most deprived neighbourhoods across the country. 

These are statistics gathered in 2018, long before the current Cost of Living Crisis, so the situation is undoubtedly worse today. No wonder there are calls that Enough is Enough!

There is a particularly bitter twist in the fact that households that once had family members who worked in refinery now struggle to pay energy bills. For so many in Medway, things have gone backwards since the days of the dockyards.

In 2017 we talked to former workers at the Coryton Refinery, across the Thames Estuary in Essex, who remembered the Grain Refinery flare on the horizon being doused over thirty years previously and the shock wave that it sent through the region. More than a generation has been living with the impacts of an unjust transition.

Can we imagine that the call of Enough is Enough! is not only an act of resistance to cuts and the radical fall in the value of real wages, but also part of a step out of several decades of economic decline?

*

Thanks to Kolya Abramsky, Lena Šimić, Terry Macalister and Annie Brooker

Endnotes:
  1. MP Barry Gardiner: https://www.barrygardiner.com/
  2. Vince Maple,: https://twitter.com/vincemaple
  3. Enough is Enough! campaign: https://wesayenough.co.uk/
  4. Crude Britannia: https://www.waterstones.com/book/crude-britannia/james-marriott/terry-macalister/9780745341095
  5. Uplift. : https://upliftuk.org/
  6. Global Witness.: https://www.globalwitness.org/en/

Resident at a Moray West wind farm community consultation event

The North Westerly gale billows and shakes the heavy white pvc of the marquee on the Portsoy harbourside, Aberdeenshire. Festival goers drift from stall to stall, under the pallid light of sun through plastic, dithering over the t-towels and pots of honey. At one end of the tent, a wall is taken up by a row of roller banners printed with text and logos, maps and images. A man in his twenties with an alert haircut stands eager to do battle on behalf of the Moray West community consultation team.

Facing a half-interested audience sheltering from the wind, his task is to explain the great benefits that stand to accrue on the back of the Moray West wind farm that is moving towards construction far out in the Moray Firth, east of Inverness. All the data, it seems, is on display in the exhibition. Off the coast of Caithness, in 150 feet of water, 65 turbines will be erected over 110 square miles of seabed – an area the size of Bristol. They will generate 860 megawatts of electricity, enough for 30% of Scotland’s energy needs (according to the exhibition), powering up to 640,000 homes and saving 1.1 million tonnes of CO2 every year. It will employ 60 personnel working out of its port base in Buckie, to the east of Portsoy where this tent stands. Everything is clear, apparently, about this bright future.

As a visitor to this, the Scottish Traditional Boat Festival, I  listen in to the community outreach officer and scan the text and diagrams that cover the 6 foot high panels. It is hard to find out who’s behind this scheme. Who owns it? It would be easy to assume that Moray West was being undertaken by Moray West, that the company is the project, or the project is the company. Closer inspection of a handout reveals that the initiative is undertaken by Ocean Winds, but quite who they are is unclear.

Moray West offshore wind farm and the cables running from it to the coast and beyond

 

One panel gives a detailed map of how the wind farm exports the electricity it generates. A cable will run 40 miles across the seabed, until it reaches the coast at Sandend just west of Portsoy. From here another cable, a further 20 miles long, will be run underground along the valleys of the Burn of Fordyce and Burn of Inverkindling until it meets the National Grid at the substation of Blackhillock near the town of Keith. From there the power will flow to anywhere in the UK, to the bulb that lights your room, to the battery that fuels your laptop or phone.

I step outside the marquee. The power of the wind has whipped the grey sea into white horses that ride in and break upon the arm of Portsoy New Harbour. There are clusters of anoraked visitors on the quayside. During a break in the rain they stare down at the few wooden vessels moored in the Old Harbour. The perfect lines of a Herring Fyvie and a Herring Zulu. Each of these boats is maintained with love, care and volunteers. These ships, these machines, were part of the fleet that captured in its nets the gargantuan harvest of North Sea Herring. The tools that created silver scaly mountains on docksides, mighty piles of barrels of pickled fish, and substantial profits for the owners of the Zulus in the years of the Herring Boom before the 1st World War. People have fished these offshore North Sea waters for over a thousand years, and for all but the last century and a half they used the power of the wind. The wind in flax or cotton lug sails.

A Zulu fishing boat registered to the port of Banff – c. 1904

Far out at the very horizon are the pale grey lines of offshore turbines, the rhythmic pillars of Moray East wind farm. Up and running since 2022, it’s the second largest offshore wind farm in the world, and also owned by Ocean Winds. But who is this company that owns the tools that reap the harvest of the wind across the sea?

This symbol of the new post-fossil fuel world is owned by the capital behind the existing oil & gas world. Ocean Winds is owned by EDP Renewables, which is itself owned by EDP (the Portuguese oil & gas corporation, Energias de Portugal), who are in turn owned by the China Three Gorges Corp, BlackRock Inc, Oppidum Capital SL, Canada Pension Plan Investment Board, Amundi Asset Management, Norges Bank, Qatar Investment Authority, Sonatrach, and ‘remaining shareholders’. BlackRock is one of the world’s largest investment companies that holds – among other things – the biggest single shareholding in BP and is constantly criticised for its investment in fossil fuels. Here too is Sonatrach, the Algerian state oil & gas company.

This is a pattern we see again and again in the infrastructure being constructed around Britain and elsewhere across the globe. Infrastructure that is intended to address climate chaos – witness the Viking onshore wind farm in Shetland[1] and the planned HyNet Carbon Capture scheme in Liverpool Bay.[2]

The turbines that generate profit for these shareholders must stand somewhere, but the electricity is worthless unless a cable can connect the wind farm to the National Grid. Who owns the seabed that the turbines stand upon? Who owns the farmland that the cable crosses once it reaches the shore? Neither of these things is revealed in the community exhibition.

The seabed belongs to King Charles III, or rather the Crown Estates, which accrues rental income from the lease of the rights over the seabed to Ocean Winds for the duration of the project. (The British monarch is reportedly the 6th largest landowner on Earth, so this is but a fraction of his portfolio.)

And the land through which the onshore cable runs? From Broad Craig on the rocky coast to Blackhillock substation twenty miles away to the south, approximately half the cable trench is excavated across the Seafield Estate, belonging to the 13th Earl of Seafield, Ian Ogilvy-Grant. This vital energy vein is planned to pass under the fields of Winter Barley and Spring Barley grown on undulating land, foodstuffs for malting and whiskey distilleries.

So this system that harvests the wind generates profit for international corporations and revenue for the British monarchy and the Scottish Aristocracy. These institutions are almost inherently undemocratic and a long way from being held accountable by the people in the communities through which these structures pass. For all the benefits that the community consultation team tries to persuade the visitors of  there is no attempt to explore the political realities of the project, to lay clear the differentials of power and control. As the experience of Shetlanders battling the Viking Wind Farm show, these differentials can have huge impacts on the lives of those living in the communities close projects such as the Moray West scheme.

Beyond the question of democratic control, is it fair that the profits from this system funnel back to the Crown, the Earl of Seafield or corporations based in China, USA, Algeria, Qatar and elsewhere? The profits generated from the household bills of millions of struggling families will be funnelled, through this scheme, into the hands of the already rich and powerful. This may be low-carbon energy, but where is the justice in this system to which we are transitioning with startling haste?

Wind belongs to everyone and no-one. But the private ownership of energy systems places this common resource in the hands of those who have profited from the enclosure of the commons for centuries.

We need to make a sudden jump out of fossil fuels and into renewables in order to address climate chaos, and yet currently this leap is subservient to the short-term desire for profit by those who presently hold this resource. If the systems of wind energy were in public ownership – if not the land that they are built upon – how would that alter the development of this renewable power?

Report published by the TUC on 24th September 2022

Now, after many years of planning and dreaming, the possibility of a publicly owned renewable energy company in the UK is coming into view. The TUC published a report authored by Mika Minio-Paluello and Anna Markova, entitled ‘Public ownership of clean power: lower bills, climate action, decent jobs’. It pointed out that:

‘If the UK today had a public energy champion similar to EDF in France, EnBW in Baden- Württemberg (Germany), or Vattenfall in Sweden, a significant portion of the excess profits taken by privatised electricity generators due to soaring wholesale prices would be coming instead to the government. Government would be able to use these revenues – equivalent to £2,250-£4,400 per UK household – to reduce bills or accelerate home insulation roll-out.’

In short, if the turbines of Moray West were owned and operated by a public energy company, such as those institutions in other European countries, then the profit of the sale of electricity from the wind farm would flow into public coffers. Could such a proposal become a reality here?

Three days later, in his Leader’s Speech to the Labour Party Conference in Liverpool, Kier Starmer announced:

“We will set up Great British Energy in the first year of a Labour government… A new company that takes advantage of opportunities in clean British power”….publicly owned because this makes most sense for jobs, growth and “energy independence from tyrants like Putin”.

Kier Starmer MP, Leader of the Labour Party, announcing the idea of Great British Energy at the Labour Conference, 27th September 2022

There is a huge amount that is unclear in this statement – positive though it is. (And it has been hailed as a win by key groups such as We Own It[3]). The devil will be in the detail with Great British Energy.

Will it have the power and capital to finance the construction of renewables projects that are 100% publicly owned?

Will it be able to demand that it has an equity stake – say 10% or 25% – in any project that is privately financed?

Will it nationalise all the wind farms that are already operating or are under construction – such as Moray West?

Will it have the power and capital to do so?

What of the transmission lines, those cables that are set to run from Moray West to Blackhillock substation?

And what of the National Grid that carries the electricity from substations such as these away across Britain?

All of these things are to be struggled over, but at least the Labour commitment opens up the possibility to debate them in real concrete terms.

Such struggles are not new. There was a similar series of battles over the British National Oil Corporation in the early days of UK North Sea Oil. As we detail in our book, Crude Britannia,[4] this bold experiment in public ownership of that offshore resource was established in 1975, but after 1982 it was steadily privatised by the Thatcher government. Until it was entirely sold off to BP in 1988. We are in the opening years of a similar struggle over offshore wind. It will no doubt be a hard fight, but there is a world to win, in places such as the Moray Firth, Portsoy, Buckie, and the farmland of Aberdeenshire.

A world in which The People will Possess the Wind.

 

*

 

Thanks to Jane Trowell, Annie Brooker, Terry Macalister and Emma Hughes.

And thanks to Mika Minio-Paluello and Anna Markova for their work in the TUC – continuing to inspire Platform as they have done for nearly two decades.

*

Endnotes:
  1. Viking onshore wind farm in Shetland: https://platformlondon.org/2022/01/18/cambo-viking-energy-the-common-wealth-of-wind-in-shetland/
  2. HyNet Carbon Capture scheme in Liverpool Bay.: https://platformlondon.org/2021/11/05/how-to-capture-the-future-and-store-capital-the-plans-for-ccs-in-liverpool-bay/
  3. We Own It: https://weownit.org.uk/blog/here%E2%80%99s-why-great-british-energy-public-ownership-win-our-movement-even-if-it%E2%80%99s-not-full
  4. Crude Britannia,: https://www.waterstones.com/book/crude-britannia/james-marriott/terry-macalister/9780745341095

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