South Africans are standing up to Big Oil

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WILD COAST, South Africa — The public notification from Shell, the oil giant, was clear: In one month it would send a ship to conduct a seismic survey, using deafeningly loud sound waves to map more than 2,300 square miles of geology beneath the deep waters off this stretch of South Africa’s coast.

Shell says that there have been 35 seismic surveys conducted offshore near South Africa over the past decade, each one lasting about three months. Shell senior vice president of deepwater exploration Bill Langin stated that “our assessment was that it would be possible to conduct a similar acquisition in safe and responsible fashion.”

But this time was different. Both Black and White joined forces to preserve the coast that is home to the legendary migrations between whales, dolphins and sea turtles. They took the London-based multinational corporation to trial in December. Shell had hired the seismic survey vessel, Amazon Warrior.

Shell had argued that the complaints about harm were “of a speculative nature,” but G.H. Bloem, a judge on one of South Africa’s 13 regional high courts, declared “The expert evidence establishes that there is a reasonable apprehension of real harm to marine life.” He added that the court had “a duty to step in” and protect people’s constitutional right to be consulted.

After decades when the promise of economic development drove decisions about when to permit drilling and exploration — especially in the developing world — the outcome was a victory for the people living along the South Africa coast who opposed the exploration. It was also a defeat for Shell, at a moment when climate change concerns have made it more difficult for big oil and gas companies that want to exploit new drilling possibilities. The International Energy Agency last year said that “there is no need for investment in new fossil fuel supply in our net zero pathway,” if the world is going to stick to the goal of limiting global warming to 1.5 degrees Celsius (2.7 Fahrenheit) above preindustrial levels.

Shell and the South African government have said that oil or gas production would bolster the country’s energy security and economic development, including local job opportunities.

“This is the least developed province,” Gwede Mantashe, a longtime ANC stalwart who is now the country’s energy minister, said in a phone interview. “If we’re too open about development, investors won’t wait and we will stay poor,” he said in a phone interview. He also opposed an international plan that would shut down the coal-fired power stations and make way for renewable energy.

But those arguments have failed to persuade people living along the Wild Coast, the country’s poorest province, where few, if any, have the skills required to work in the oil sector.

Instead, most residents fear the end of fishing and tourism as their livelihoods. Though Shell says seismic surveys would be 12.5 to 44 miles offshore, residents envision oil spills riding the undersea current here — the world’s second swiftest — down the coast and into nutrient-rich Antarctic waters in one of the planet’s last truly untouched places.

“This ocean is our life, so it is nothing less than that which Shell would destroy,” said Zingisa Ludude, 62, who protested the blasting by writing slogans in the sand along the beach where she harvests mussels for a living. “Everything we need comes from the ocean.”

Shell has long been one of the world’s top oil companies. Built in the late 1800s by a tightknit family from east London, Shell now operates in 70 countries. Shell has survived many market shocks, world wars, and pandemics. Recently, it stated that it may write off $5 billion to exit Russia.

Shell produces about 2.4 million barrels a day of oil and natural gas equivalents. This has kept planes flying and a lot of people alive. When prices rise and consumers suffer, however, the oil industry thrives; in 2021, Shell earned $19.3 billion, and it still trailed ExxonMobil.

The fight in South Africa echoes a larger debate about how fossil fuel companies should reduce and eventually eliminate their carbon emissions — and the implications for regions that have benefited from drilling. According to climate activists, the oil companies could still earn a lot of money by not drilling for new resources.

“Shell can make money. “No one is stopping them being a good citizen,” Desmond D’Sa said, the coordinator of South Durban Community Environmental Alliance which trains unemployed fisherman. “We just don’t think they should be drilling for oil and gas.”

But Shell’s chief executive, Ben van Beurden, said activists overlook key factors in the current petroleum arithmetic. If Shell is going to reach net-zero emissions by 2050, he said, it will need to use money from its oil and gas business to fund a transition to a new type of enterprise based on renewable energy and carbon capture and storage.

Van Beurden also said that during that transition, demand for oil and gas will remain high. Van Beurden also stated that there will be a struggle to supply oil and gas in order to meet the demand. On the last quarter’s earnings call, he stated that a significant struggle for supply to keep up with demand was looming.

Yet Shell and other companies are facing mounting legal and regulatory challenges in a growing number of countries.

Shell still has nearly two dozen major exploration and production developments worldwide, but it has dropped plans to invest in the Cambo oil field off the Shetland Islands in Scotland for regulatory reasons. Shell has invited bidders to purchase its Nigerian onshore oil fields, which have been a source of rich petroleum for over six decades. In 2017, Shell sold its interests in Canada’s oil sands, considered among the most greenhouse gas-intensive oil grades in the world.

The most jarring setback of all, however, came on May 26, 2021, when a Dutch court said that by 2030, Shell must reduce its reported worldwide emissions by 45 percent over 2019 levels. The court — responding to a class-action lawsuit brought in 2019 by Friends of the Earth Netherlands, six other Dutch nongovernmental organizations and about 17,000 individuals — said Shell’s climate plans were insufficient to prevent serious climate change, leaving the company in danger of “imminent breach” of the reduction order.

“This decision marks the first time any court in the world has imposed a duty on a company to do its share to prevent dangerous climate change,” said a memorandum by the respected law firm Cleary Gottlieb. Shell intends to appeal this decision but it had to comply immediately. Cleary Gottlieb attorneys warned that similar companies must expect to follow the same rules.

The information data provider IHS Markit, a subsidiary of S&P Global, said in a research note that oil companies in Africa “faced increasingly insistent challenges from civil society and constraints on financing due to climate concerns.” Friends of the Earth, an environmental activist group, last December challenged British government’s financial backing of Mozambique’s liquefied natural gas facilities. A letter signed by 263 civil society organizations last year called on banks not to finance Uganda projects.

In South Africa, local activists won a temporary stay of Shell’s seismic survey by declaring that they must be properly consulted and their consent given before any large-scale economic project can take place. A judge ruled that Shell’s costs could not be outweighed by the value of their constitutional right to consult.

“I stay here, I belong here, I have a right to responsibly live here as a person,” said Ludude, echoing a sentiment the courts here ultimately found compelling. They must consult us if Shell wishes to move here. That must be the basis for economic development, not a decree from somewhere.”

The political argument for oil development on the Wild Coast put forward by the South Africa’s governing party, the African National Congress, was simple: Shell will bring economic development to a place that badly needs it.

The hills here are dotted with impoverished villages and split by rivers that gush through ravines to the sea. The coast can be reached by several hours on foot from the nearest road. It isn’t a popular holiday spot like other parts of South Africa’s coastline.

But this region is famous, too, for bucking against power. Its people rose up against the apartheid government in the 1950s and won a homeland, Transkei, that did not abide by the most oppressive strictures of White rule. That inspires Sinegugu Zukulu, 51, a tour guide, local plant expert and activist who has led movements here against strip mining, a toll road and now Shell.

“This is one of the last coastlines in the world that belongs to Indigenous people,” he said on a recent morning while visiting a remote stretch where the Msikaba River empties into the ocean. We are being forced to live in poverty because of it. These projects are about shareholders. These projects are about shareholders.”

When Mantashe came to the region, he was booed and heckled, part of a broader controversy roiling South African politics.

The former president, Jacob Zuma, is on trial for corruption so egregious it has been termed “state capture.” Vast swaths of the economy were allegedly signed over to cronies or companies who outbid on contracts through both legal and under-the-table means.

The ANC received a $1 million donation in the third quarter last year from the Batho Batho Trust, according to the Electoral Commission of South Africa. In the same quarter, donations were also received by ten other parties. The trust owns 47 percent of Thebe, founded by ANC leaders in 1992 to start buying up chunks of a wide variety of companies just as apartheid was ending. One of Thebe’s many investments in 2008 was a 28 percent stake in Shell’s refining and marketing operations in South Africa.

Recently, South Africa’s deputy chief justice, Raymond Zondo, referred Mantashe for criminal investigation into alleged misconduct including the acceptance of security upgrades at three of his properties. Local newspapers report that Mantashe denied all claims.

“The ANC is a sellout party,” said Wanda Ludude, 33, Zingisa Ludude’s son. They see this as a wonderful deal. They don’t want us to be colonized. It is like being colonized.”

Scientists were up in arms, too. Kevin Cole has been studying the Wild Coast’s marine environment for over 40 years. He obtained a copy from Shell and was shocked by the lack of details.

“It was basically a rubber stamp,” he said. “It used whaling data from the 1960s to approximate current populations. The strong upwelling current that we have in this area means it is impossible to contain or even avoid the catastrophic effects of an oil spillage here. The whole ecosystem could implode.”

Shell says that last year when it bought half interest in offshore blocks held by a company called Impact Oil and Gas, that it had also acquired Impact’s permits, which were issued in 2014.

Seismic blasts took place for a month before a court ordered a stop. Cole discovered fish with flared nostrils and beaked whales on the beach during that time. Whales are one of the least well-studied animals in the world. They live mostly in deep waters and seldom wash up onshore. Cole doesn’t believe it was an accident.

The seismic work temporarily blocked by the South African court is common, but still controversial. This happens before any actual drilling. An array of air guns is attached to cables, and then dragged behind the boats. Air guns fire compressed air, which creates sound waves that echo off the ocean floor. These images can be three-dimensional thanks to new technology. They make it easier to drill dry holes and wells that are too small for economic viability. In 2020, there were 325 surveys done worldwide, Shell says.

Shell’s Langin said the company takes precautions. Each seismic ship working for Shell has a 500-meter exclusion zone (or about a third of a mile) so that if any marine mammal is seen inside that zone, the seismic shots stop for an hour after the zone is empty. He also stated that Shell doesn’t acquire data at breeding and migration times.

“We avoid those in all areas where we work, and it’s no different in South Africa,” Langin said.

But environmental groups have not been persuaded.

“For whales and other marine mammals, life is a symphony of sound,” said the Natural Resources Defense Council, which is opposing seismic tests off U.S. coasts. They use sound to navigate across the ocean and find their food, mates, and also for navigation. To them, a seismic blast is like a bomb repeatedly going off in their home every 10 seconds.”

“For marine mammals that depend on sound communication for their social interactions and survival, seismic surveys are the equivalent of blinding entire human communities,” said Enric Sala, a conservationist and explorer-in-residence at the National Geographic Society who has led a Pristine Seas campaign.

It remains unclear what will happen here, especially since so much of the South African coast has been leased to companies such as TotalEnergies and Shell. The government has issued 20 exploration licenses on tracts along much of the country’s 1,740-mile coastline, according to the South African Oil & Gas Alliance. Not counting Prince Edward Island, 5 percent of the country’s oceans are protected by 41 marine protected areas.

TotalEnergies last year shelved its drilling plans.

“We will talk to Shell and convince them to come back,” said Mantashe, the minister. Every mining or oil project must be subject to an environmental assessment. It is not clear what the court based its decision. We will respond fully and put experts in the boxes.”

On April 20, TotalEnergies said it would hold consultations that would cover geophysical data, exploration wells and subsea infrastructure for production. TotalEnergies said it wants to pursue two “significant” discoveries of light liquid hydrocarbons it made in 2019 and 2020.

Kenneth Creamer, an economist at the University of the Witwatersrand, said that other international companies are running into trouble in South Africa. Amazon recently stopped a large investment in Cape Town due to claims by descendants of the Khoisan that Amazon was building facilities on ancestral land.

In both the Shell and Amazon cases, “the South Africa economy, which has been flagging for the past 10 years, sorely needs the growth, investment and job creation that would likely flow from these business activities,” Creamer said. Eventually the project might be given a “green light,” he said, “but there is always a risk that by that time investors might have moved on to less litigious jurisdictions.”

Zukulu, the activist and tour guide who was the lead complainant in the court case against Shell, said he was not going to celebrate the court ruling, which was temporary and governed only the right to consultation.

“We say you don’t celebrate while you are still in the forest,” he said. This is an interim interdict and Shell is supported by a party which isn’t going anywhere. They would trash our ocean for short term gain. This government is trying to take our coast. Our government, the Black government doing this year after year. They would trash our ocean for short term gain.”

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