Tuesday, 27 April 2010

Challenging the human misery of corporate profit

This week, reports Reuters, "the biggest U.S. and European oil companies are expected to report big rises in first-quarter profits next week on the back of a recovery in oil prices and refining margins."

This means that, "Exxon Mobil (XOM.N), the world's largest non-government controlled oil company by market value, is expected to report a 44 percent rise in net income in the quarter" and "Royal Dutch Shell Plc (RDSa.L), will likely see a 35 percent rise in first-quarter current cost of supply net income, excluding one-offs, to $3.99 billion."

According to the Financial Times, "BP has exceeded analysts’ expectations with a 135 per cent rise in post-tax profits for the first quarter, and continued to cut its debts, thanks to the rebound in oil and gas prices and an improvement in the performance of its refineries." This means that the company's "net debt continues to fall, dropping to $25.2bn at the end of March, down from $26.2bn at the end of last year."

Overall, "the oil and gas exploration and production business reported a 94 per cent rise in operating profit over the year to $8.3bn, although this was slightly lower than in the final quarter of 2009."

But such vast profit does not come without human and environmental costs. As Bruno Federico of COSPACC, a Colombian collective that works with communities in the region where BP operate for oil, points out;
BP has been operating in Casanare, eastern Colombia for twenty years. During that time, 2600 people have been disappeared, 6500 people have been killed by paramilitary groups, right wing armed groups that have institutional links to the Colombian government.

More recently there has been 100 documented cases of direct state assasinations of civilian assassinations. Community leaders were forced to flee and social organisations that challenged BP's practices were exterminated.

There has also been severe environmental damage caused by the extraction; water contamination, water depletion, landslides from seismic exploration. There has been very little challenge to BP's environmental impact due to the communities being unable to organise.
The company is also heavily involved in the Tar Sands project in Canada. Tar sands are naturally occurring mixtures of sand or clay, water and an extremely dense and viscous form of petroleum called bitumen. The damage they cause to the environment is exponentially greater than that offered by conventional oil extraction.
As the UK Tar Sands network explains;
  • Millions of barrels of oil a day are now being extracted from what is currently the largest industrial development in the world.
  • It covers an area the size of England, and the toxic tailings ponds are so huge they are visible from space.
  • Extracting oil from these sludgy deposits in the heart of Canada’s ancient forests produces three to five times as much greenhouse gas as conventional oil.
  • indigenous communities, on whose land Tar Sands extraction has been imposed, are seeing high rates of rare forms of cancer and respiratory disease.
  • Tar Sands extraction is extremely resource intensive, using enough natural gas every day to heat 3.2 million Canadian homes.
  • The Canadian Government is blocking progress in international talks to curb greenhouse gas emissions because it wants to dramatically expand Tar Sands production over the coming decades.
The Network explains that "while all this is happening in Canada, decisions are being driven from London’s financial Square Mile." And BP is not the only culprit;
Shell is heavily involved. BP is about to go into its first Tar Sands extraction project, ‘Sunrise’ – in partnership with the parent company of Superdrug. Both Shell and BP are financially backed by most major UK pension funds.

Meanwhile, London’s investment banks have helped finance a wide range of Tar Sands projects, with RBS, HSBC and Barclays being amongst the world’s fifteen biggest Tar Sands investors. RBS is a particular target because it is now 84% owned by the UK taxpayer.
But even where conventional oil extraction is involved, the effects are devastating. The Independent today reports on Shell's Opolo Epie facility, "the newest gas flare in the Niger Delta" where "millions of cubic feet of natural gas will be pumped before going up in smoke." The scene described is an apocalyptic one;
The Opolo-Epie plant is set to join at least 100 other flares burning across the swamps, creeks and forests of this oil-producing region, filling the atmosphere with toxins, seeding the clouds with acid rain and polluting the soil. 

The gas flares, some of which have been burning constantly since the 1960s, are visible from space. In a country where more than 60 per cent of the people have no reliable electricity supply, the satellite images show the flares burning more brightly than the lights of Nigeria's biggest city, Lagos. 

Medical studies have shown the gas burners contribute to an average life expectancy in the Delta region of 43 years. The area also has Nigeria's highest infant mortality rate – 12 per cent of newborns fail to see out their first year. 
In the midst of such a scene, armed and militant resistance is inevitable. Though attacked as criminals, the armed rebels of the Delta are supported by indigenous people for one quite simple reason. They get results.

As Joseph Hurstcroft, executive director of Stakeholder Democracy Network, told the Independent, "there is an obvious correlation between militancy, reduced oil production and reduced flaring." When it is near-enough estalished fact that the oil companies "will never stop gas flaring until the oil wells run dry," what else can those affected do but take up arms?

These are just the most obvious examples. All across the world, companies such as Shell and BP are reaping huge profits by ravaging the environment, stealing and destroying the land of indigenous peoples, and even driving up the prices for the working class people who serve as essentially captive markets for their products in the west.

If we want to see an end to this, then an international movement is a neccesity. Those who protest here and elsewhere in the west are an important part of the puzzle, but not the only part. Their actions need to be linked with solidarity campaigns and humanitarian efforts in the affected regions. Efforts to build sustainable communities and promote renewable energy must incorporate awareness of these global injustices into their perspective.

Most importantly, when ordinary people are willing to protest - even riot - over oil and petrol prices, the environmental movement must stand with them. If this seems contradictory, it stems from the assumption that those protesting simply want more oil and cheaper. They don't. They want to be able to live their lives, to travel to their jobs, families, and elsewhere, without being stripped of their money along the way.

If the only way they can do that is by appealing to Big Oil for more production, and more exploitation of people and the environment, then the green movement has already lost the argument.