To date, nine cities have
sued the fossil industry for climate damages. California fisherman are going after oil companies for their role in warming the Pacific Ocean,
a process that soaks the Dungeness crabs they harvest with a dangerous neurotoxin.
Former acting New York state attorney general Barbara Underwood has
opened an investigation into whether ExxonMobil has misled its
shareholders about the risks it faces from climate change, a push current
Attorney General Leticia James has said she is eager to keep up. Massachusetts
attorney general Maura Healey opened an earlier investigation into
whether Exxon defrauded the public by spreading disinformation about climate
change, which various courts — including the Supreme Court — have refused to block despite the company’s pleas. And in Juliana vs. U.S., young people have filed suit against the
government for violating their constitutional rights by pursuing policies that
intensify global warming, hitting the dense ties between Big Oil and the state.
These are welcome attempts to hold the industry
responsible for its role in warming our earth. It’s time, however, to take this
series of legal proceedings to the next level: we should try fossil-fuel
executives for crimes against humanity.
a Reasonable Doubt
Just one hundred fossil fuel producers — including privately
held and state-owned companies — have been responsible for 71 percent of the
greenhouse gas emissions released since 1988, emissions that have already
killed at least tens of thousands of people through climate-fueled disasters
Green New Deal advocates have been right to focus
on the myriad ways that decarbonization can improve the lives of working-class Americans. But an important
complement to that is holding those most responsible for the crisis fully
accountable. It’s the right thing to do, and it makes clear to fossil-fuel
executives that they could face consequences beyond vanishing profits.
More immediately, a push to try fossil-fuel
executives for crimes against humanity could channel some much-needed populist
rage at the climate’s 1 percent, and render them persona non grata in
respectable society — let alone Congress or the UN, where they today enjoy
broad access. Making people like Exxon CEO Darren Woods or Shell CEO Ben van Beurden well known and widely reviled would put names
and faces to a problem too often discussed in the abstract. The climate fight
has clear villains. It’s long past time to name and shame them.
Left unchecked, the death toll of climate change
could easily creep up into the hundreds of millions, according to the Intergovernmental Panel on
Climate Change (IPCC), in turn unleashing chaos and suffering that’s simply
impossible to project. An independent report commissioned by twenty governments in 2012
found that climate impacts are already causing an estimated four hundred
thousand deaths per year.
Counting a wider range of casualties attributed to
burning fossil fuels — air pollution, indoor smoke, occupational hazards, and
skin cancer — that figure jumps to nearly 5 million a year. By 2030, annual
climate and carbon-related deaths are expected to reach nearly 6 million.
That’s the rough equivalent of one Holocaust every year, which in just a few
short years could surpass the total number of people killed in World War II.
All caused by the fossil-fuel industry.
Knowing full well the deadly consequences of
continued drilling, the individuals at the helm of fossil-fuel companies each
day choose to seek out new reserves to burn as quickly as possible to keep
their shareholders happy. They use every possible tool — and they have many —
to sabotage regulatory action.
That we need to instead strip fossil fuels from the
global economy isn’t up for debate. Without the increasingly distant-seeming
deployment of speculative, so-called negative emissions technologies, coal
usage will have to decline by 97 percent, oil by 87 percent, and gas by 74
percent by 2050 for us to have a halfway decent shot at keeping warming below
1.5 degrees celsius. That’s what it will take to avert pervasive, catastrophic
climate impacts that will destabilize the very foundations of society. (Keeping
warming to a more dangerous 2.0 degrees celsius will require decarbonization
that’s almost as abrupt.)
A recent report by
Oil Change International detailing the climate costs of continued drilling lays
the problem out in simple terms: either we embark on a managed decline of the
fossil-fuel industry, or we face economic and ecological ruin. Simply put, the
business model of the fossil-fuel industry is incompatible with the continued
existence of anything we might recognize as human civilization.
Barring a major course correction, that business
model — and more specifically, the executives who have designed and executed it
— will be responsible for untold suffering within many of our lifetimes, with
the youngest and poorest among us bearing a disproportionate burden, along with
people of color and residents of the Global South.
As recent research and reporting have documented,
some of the world’s biggest polluters have known for decades about the deadly
threat of global warming and the role their products play in fueling it. Some
companies began research into climate change as early as the 1950s. These days,
none can claim not to know the mortal danger posed by their ongoing extraction.
Crime Against Humanity
Technically speaking, what fossil-fuel companies do
isn’t genocide. Low-lying islands and communities around the world are and will
continue to be the worst hit by climate impacts.
Still, the case against the fossil-fuel industry is
not that their executives are targeting specific “national, ethnical, racial,
or religious” groups for annihilation, per the Rome Statute,
which enumerates the various types of human rights abuses that can be heard
before the International Criminal Court. Rather, the fossil industry’s behavior
constitutes a Crime Against Humanity in the classical sense: “a widespread or
systematic attack directed against any civilian population, with knowledge of
the attack,” including murder and extermination. Unlike genocide, the UN
clarifies, in the case of crimes against humanity,
it is not necessary to prove that there is an
overall specific intent. It suffices for there to be a simple intent to commit
any of the acts listed…The perpetrator must also act with knowledge of the
attack against the civilian population and that his/her action is part of that
Fossil-fuel executives may not have intended to destroy the world as we know it. And climate change may not look like the kinds of attacks we’re used to. But they’ve known what their industry is doing to the planet for a long time, and the effects are likely to be still more brutal if the causes are allowed to continue.
Energy Reporters posting an article on Libya’s oil chief being bullish amid his country’s chaos that does seem to be wanting to end.
aims to more than double its oil production to 2.1 million
barrels per day (bpd) by 2021 provided security and stability are boosted, said Mustafa Sanalla, the chairman of
the state oil company, the National Oil Corporation (NOC).
The war-torn state produces 953,000 bpd, compared
to its pre-war capacity of 1.6 million bpd, according to Sanalla.
The oil boss demanded increased security at El Sharara oil field to ensure the
315,000 bpd site – which on December 8 was overrun by tribal activists, protesters and
security guards demanding unpaid wages – could return to production.
El Sharara, around 750km southwest of the capital Tripoli, is the country’s
largest oil field. Until recently it was producing about 270,000 barrels of oil
per day, more than a quarter of Libya’s daily oil production.
The oil activists demanded the rebuilding of cities and towns affected by
post-2011 armed conflict and providing liquidity for banks in the south to
boost recovery efforts.
“What happened in El Sharara discourages foreign companies,” said Sanalla, who
announced a visit to China in early 2018 to discuss oil investment
“The legitimate and rightful concerns of the southern Libyan communities are
being hijacked and abused by armed gangs, who instead of protecting the field
to generate wealth for all Libyans, are actually enabling its exploitation and
looting,” said Sanalla.
He also confirmed the improved security conditions in the Sirte basin in
central Libya which would enable the launch of production at the Farigh gas
field to 24 million cubic feet per day in three months, with an eventual output
goal of 270 million cubic feet per day, Sanalla said.
Prime Minister Fayez al-Serraj (pictured) recently agreed to set up funds in
excess of US$700 million for the development of southern Libya, which has
suffered from decades of neglect after talks with the El Sharara militants. The
talks followed a warning from Sanalla that the government should not encourage
the militant groups at El Sharara with concessions as this would set a
dangerous precedent for other direct action.
Despite security problems, the NOC said it expected full-year revenue to surge
by 76 per cent to US$24.2 billion for 2018.
Prime Minister Fayez al-Serraj. Libya’s oil
producers struggle with security challenges, making the war-torn state an
unreliable member of Opec. Picture credit: Wikimedia
Although Qatar’s exit from OPEC does not
affect much OPEC’s oil production power since the Emirate contributes only 2
percent to the cartel’s production capacity, it does pose serious questions on
the future of the organization and the role it is expected to play in global
Qatar’s decision to pull out of OPEC may
well be driven by political considerations; however, it also reflects the
growing signs of discontent among OPEC’s members with how the organization is
governed and how its production policies do not necessarily align with those of
some member states.
Structural shifts of oil markets and the
existence of major imbalances of the needs and policies of OPEC’s members pose
a serious challenge to the organization’s unity and its ability to continue to
abide by its mandate to “coordinate and unify the petroleum policies of its
member countries”. OPEC, as an organization, is likely to continue to exist,
but its role has already been weakened and will continue to dissipate as
differences among its members become more pronounced and other producers like
Russia and the United States increase their market share.
What is OPEC and how it is governed?
OPEC, which stands for Organization of the Petroleum Exporting Countries, can be understood as a club of some of the oil producing countries that is primarily mandated with protecting the interests of its member states and ensuring “a steady income to producers”. At the time of its inception in 1960, OPEC was seen as a “revolt” against private oil companies that seemed to ignore the interests of the producing states.
With Qatar’s exit, the organization
currently lists 14 members including Saudi Arabia, Iran, Iraq and Venezuela,
who are also founding members of OPEC. In 2017, OPEC members produced around 42
percent of the total global oil supply — more than 39 million barrel per
day — with Saudi Arabia, alone, contributing about a third of OPEC’s
production. In terms reserves numbers, OPEC members host 70 percent of global
proven oil reserves.
On paper, OPEC’s governance and decision
making requires the agreement of all member states; however, Saudi Arabia is
the de facto leader of OPEC due to its market share and spare capacity that
could be utilized to implement OPEC’s policies. Effectively, Saudi’s ability to
substantially vary its production and thus directly impacting oil markets made
it a price setter.
OPEC’s destabilizing factors
Infighting and cheating: Despite being oil
producing countries, OPEC members have different political, social and economic
realities. These differences translate into different needs at different times
and consequently, and naturally, creates tension and discontent within the
group. These different needs are manifested by the “budget break-even” price of
oil that each member states requires to fully cover its budgetary expenses (see
The numbers shown in the chart above are
largely dependent on the production in each country. For example, Venezuela’s
very high break-even price is due to its diminished production share of just 4
percent of OPEC’s basket — 500,000 barrel per day below its OPEC output target. Libya is also in
similar situation where it is looking to increase production to meet its
Because of these imbalances, OPEC members
continue to cheat to maximize their gains. Cheating is particularly rewarding when
production cuts are made and prices are elevated as countries with low
compliance eat into the market share of other oil producers. Iran, Iraq, Libya
and Nigeria have all attempted to cheat their way to produce more than they are
supposed to do.
Cheating has been reported in the academic literature as
the one of the main reasons that lead to cartels’ eventual collapse.
Shale oil: It was in 2014 when, driven by
Saudi Arabia’s interest in putting pressure on US
shale companies, oil supply exceeded demand, despite resistance of other
OPEC members with lower tolerance thresholds. The resulting glut sank oil
prices below $30 per barrel. Although many US shale companied filed for
bankruptcy, the industry emerged much stronger after the crisis due to
better adaptation to lower
prices, cost cutting measures, and technological efficiencies.
What makes shale oil a destabilizing factor
for OPEC is its relatively quick response to oil prices, limiting OPEC’s
ability to manipulate prices. The many independent shale companies in the US
can gradually increase their supply in response to higher prices, which would
eventually exert a downward pressure on prices.
Additionally, advancement in shale
technologies and reduced costs of offshore exploration and production allowed
new counties to become oil and gas producers, reducing their reliance on
Is OPEC still relevant?
Yes, but its power is diminishing. OPEC remains a dominant player in the global oil markets with production flexibility to smoothen price volatility. Additionally, OPEC members still have a major cost of production advantage compared to non-OPEC and shale rigs in the United States. However, market shifts such as increased share of unconventional oil and gas, especially in big oil consuming countries, and the increasing use of natural gas in power production are increasingly limiting OPEC’s ability to manipulate oil prices as it used to do. Now, shale producers are carefully watching prices and stand ready to react accordingly.
Other entities can only affect the traders’ bidding decisions. These influencers include the U.S. government and the Organization of Petroleum Exporting Countries. They don’t control the prices because traders actually set them in the markets.
The oil futures contracts are agreements to buy or sell oil at a specific date in the future for an agreed-upon price. They are executed on the floor of a commodity exchange by traders who are registered with the Commodities Futures Trading Commission (CFTC). Commodities have been traded for more than 100 years. The CFTC has regulated them since the 1920s in the US and by equivalent institutions in every developed and / or developing country. It is also function of the following:
The eight factors determining the price of oil
According to the September monthly report of the International Energy Agency (IEA), in August 2018, for the first time, the bar of 100 million barrels produced per day was crossed. World oil consumption represented 97.4 million barrels per day (MBJ) in 2017 (including 57 MBJ by non-OPEC countries), equivalent to 1,127 barrels or 179,000 liters per second. Also, despite the commitments of the Paris Agreement (COP21) of December 2015 (entered into force in November 2016), global awareness for the climate does not seem to reach the oil sector. A list of eight reasons that determine the current course.
The first reason, as noted in international reports would be a recovery of growth for 2018, but with a slowdown forecast for 2019 and 2020. Many international experts, as well as international institutions such as the IMF and the World Bank, foresee a possible global crisis horizon 2020/2025 in case of acceleration of protectionist measures between the US and Europe, as well as between the US and China. Moreover, the latest report of the IEA of October 2018 warns the countries dependent on the oil revenues, due to a change in the trajectory of growth based on a new configuration of the global energy demand (Energy efficiency, renewable energies, hydrogen inlet horizon 2030 all based on the Knowledge economy) that will impact the demand for traditional hydrocarbons.
The second reason is respect for the quota of each member of the OPEC as decided upon in December 2016 in Vienna with notably Saudi Arabia representing 33% of OPEC’s. It is worth noting that OPEC in its entirety represents 33% of global marketing, even though the current tensions between Iran and Saudi Arabia can lead to a disagreement between unsatisfied OPEC’s members.
The third reason is the agreement between OPEC’s Saudi Arabia and non-OPEC Russia; these two countries producing each more than 10 million barrels per day. Moreover, any different decisions from these two countries would impact the price of hydrocarbons downwards.
The fourth reason is the political situation in Saudi Arabia, the world not seeing yet evident in the action of the kingdom’s Crown prince, with the fear of internal political tensions, but above all the sale of 5% shares of the country’s largest company ARAMCO, to maintain its shares at a high level; sale that has been postponed.
The fifth reason is the tension in Kurdistan (this area producing about 500,000 barrels/day), declining Venezuelan production, socio-political tensions in Libya and Nigeria.
The sixth reason is the American president’s speech on the US having second thoughts on the agreement on Iran nuclear deal; with sanctions beginning to be applied on November 5th, 2018. This would certainly be mitigated by the European position that decided to set up a barter system to circumvent the transactions in Dollars, and the Chinese market or the Iranians can get paid in Yuan.
The seventh reason is the weakness of the Dollar in relation to the Euro.
The eighth reason is the decline or rise of US stocks, while not forgetting the Chinese stocks.
In the short term, the above eight reasons may influence the price of oil either upward or downward, with some factors being more predominant than others. The Minister of Energy of Saudi Arabia reported on October 30th, 2018, under American pressure to raise its oil production to 12 million barrels per day against 10.7 million currently, to fill in for the Iranian production and in this case, it will be followed by Russia that does not want to lose market share. In this hypothesis, the price of Brent should, except for a significant global crisis where the prize could fall below 60 Dollars, fluctuate between 65 and 75 Dollars, 70 Dollars a barrel, being the price of equilibrium in order not to penalise either the consumer countries or the producing ones. The oil price went lower than $60 mainly as consequent to the massive entry of U.S. shale oil and gas with a production exceeding 10 million barrels/day.
In August 2018, according to the US Energy Information Agency (EIA), the US has even turned into the world’s leading producer of oil, in front of Russia and Saudi Arabia, with 10.9 million barrels per day and this production should even exceed 11.5 million barrels per day in 2019.
“We should start drilling at the beginning of next year,” Abdelmoumene Ould Kaddour told reporters on the side-lines of a signing ceremony with TOTAL for a petrochemical plant that will produce 550,000 tonnes of polypropylene per year.
“The potential is huge. We have gas in the east around Skikda, and oil in the west around Mostaganem,” he added.
SONATRACH and TOTAL have also agreed to invest $406 million to boost the output of the gas field named Tin Fouye Tabankort Sud.
“Our partnership with TOTAL is good and it allows us to implement our long-term strategy,” Ould Kaddour told reporters.
TOTAL Chairman and CEO Patrick Pouyanne said in a statement earlier on Oct. 7 that TOTAL and SONATRACH had signed new agreements, including a contract to develop the Erg Issouane gas field.
In the meantime, here is the same event as reported by the francophone local media: Algeria is officially embarking on offshore oil exploitation. The CEO of SONATRACH, Abdelmoumen Ould K, confirmed that the first offshore drilling would be launched in the first half of 2019.
For Algeria, these new drillings have become more than an alternative to oil extracted onshore. It is important to know that the recurring increase in crude oil and technological advances in offshore operations offer more opportunities and margins for petroleum companies.
In all likelihood, it is the Italian giant ENI who as the partner of SONATRACH for the development of its offshore activities. SONATRACH has long conducted negotiations with ENI’s to launch these explorations. These negotiations have advanced considerably since the conclusion in January 2017 of a memorandum of understanding (MoU) with the Italian company Versalis (a 100% subsidiary of the Italian group ENI) to carry out studies on petrochemical projects.
The MoU with Versalis deals with feasibility studies for the realisation of petrochemical complexes in Algeria, and the strengthening of cooperation between the two companies in the field of Petrochemicals.
It is to be noted that offshore oil exploitation has its peculiarities if compared to the conventional oil exploitation. This difference is due to the environment in which it occurs. In fact, up to 200 m in depth, it is possible to fix the operating platform. More than 200 m, pressures are increasing and becoming less sustainable. The control of operations, even though robots, is then more difficult. In these conditions, floating platforms are more appropriate. Most offshore oil farms do not exceed 500 m in depth.
The first offshore drilling will be carried out in the provinces of Oran and Béjaïa, delimited as offshore exploration zones after seismic studies were carried out in their territorial waters. The interpretation of the 2d seismic data of the 1200 km of the Algerian coasts, led the prospecting to these two provinces. In Algeria, offshore areas that are likely to hold hydrocarbons are located between 2000 and 2500 metres in depth, according to the results of the first seismic studies carried out on the Algerian offshore. As for the cost of single offshore drilling, it is close to $100 million.
Abdelghani Henni, back in January wrote that Algeria ranks third globally after China and Argentina in technically recoverable shale gas reserves with 20 Tcm, according to the U.S. Energy Information Administration. (Source: Shutterstock.com)
Developing abundant shale gas has become a necessity for Algeria to reverse its declining domestic natural gas production and safeguard its economy. Shale gas is however not for NOW. The struggle is ferocious between the French and the Americans and it is not over yet.
Meanwhile, it must be said that all the onshore and diminishing conventional oil reserves are located deep in the Algerian Sahara whereas all offshore are obviously in the country’s territorial waters of its northern shores. Shale gas on the other hand prospected pockets are mostly all located also in the Sahara but close to many inhabited oases whose populations are predominantly and adamantly against any exploration of such fossil resources.
This article is meant to be as informative about the problematics of consultation and decision making in Algeria as it is possible to muster at this conjecture. What to do with the vastness of the Saharan desert where large pockets of gas lay buried according to all known geological analyses for millennia. The strategic decision regarding the exploration or not would be the prerogatives of a small circle of civil servants that as techno-functionaries with their small private interests are more likely to weigh in more than the country’s development. The locals would certainly not look at it the same way. As for exploring the societal-economic impacts related to the extraction of shale gas and comparing their different technical-economics characteristics that any extraction of the dormant shale gas could have on local and national communities, it is indeed not for tomorrow. In any case, what do they, these so-called elite know about all this gentleman in the picture? It seems to be the typical case of Algerians; unable to manage a small professional organisation and yet to aim to steer a whole country towards the exploration of this resource. The demonstration is no longer necessary when we think of parliaments in non-democratic states, we often think of a room full of raised hands. This compelling image of unanimity conveys a simple idea: that these assemblies are stuffed with loyal servants of the ruling elite. Rather than scrutinise, challenge, amend, and block initiatives from the government, they provide guaranteed support. Rather than act as a check on executive power, they provide symbolic, merely ceremonial approval. (Russia: new research shows even authoritarian regimes …. ). Alternatively, that is how the conventional wisdom goes. Meanwhile, it is said however in London and from all mainstream US media “feedback” on shale oil production, that the benefits of fracking are more likely to be appreciated by communities in actively and highly developed countries rather than by those in low or middle-level development countries. Besides, it is reasonably well known that the potential risks and disadvantages of shale gas and its extraction are more likely to be experienced by the communities of the latter countries like Algeria than by those that are in very or very highly developed countries and that for the same reasons. However, there is no longer need for further proof that even the communities of developed countries would also be as vulnerable to some environmental and health risks. It is demonstrated by the increasingly greater awareness and consequent movements of resistance against exploitation of all fossils. From the streets to the big investors, but there are always the Big Oils monetising the defence of their careless turnovers against all attempts to demonise their short-term business plans of exploitation of shale gas. There are also these famous Algerians with their vast Sahara projects; they are rather keen to follow because they are not difficult to convince with only a small handful of Petro-Dollars. Is it worth all the trouble whereas the same vastness could easily be covered by solar and wind farming infrastructure.