During 2010, ShareAction worked with investors and NGOs to challenge the development of "tar sands" deposits by oil & gas companies.
Tar sands (also known as ‘oil sands' or ‘extra heavy oil'), are a type of naturally occurring bitumen deposit, requiring a complex, energy-intensive, and high emission-producing process to produce oil in a useable form. The world's largest deposits occur in Canada and Venezuela. The Canadian and Venezuelan deposits contain about 3.6 trillion barrels of oil, compared to 1.75 trillion barrels of conventional oil worldwide. ShareAction is focusing on the most developed location of tar sands extraction in Alberta, Canada, which covers about 140,000 square kilometres (more than the total area of England and Wales).
The size of tar sands deposits, combined with their unusually high greenhouse gas emissions, mean that they threaten to be a major contributor to climate change. Roughly three barrels of natural gas are consumed to create one barrel of tar sands oil. Every day the extraction process uses enough natural gas to heat 3.2 million Canadian homes for a day . Tar sands are a significant factor in Canada's failure to meet its Kyoto protocol targets.
Tar sands also have impacts on the health and human rights of people over wide areas. Approximately 11 million litres of contaminated water leaks into surrounding rivers and groundwater each day, containing arsenic, mercury, and various carcinogens - which have already been linked to elevated rates of cancer in downstream communities. Exploiting tar sands involves widespread deforestation and wildlife loss; and First Nations communities have already begun legal proceedings citing breaches of constitutional rights.
Investors and industry analysts increasingly raise concerns about the long-term profitability of tar sands, specifically pointing to the very high operating costs, expected carbon price rises, oil price volatility, expected fluctuations in demand, regulation of greenhouse gas emissions, and the legal and reputational risks arising from environmental damage and human rights cases. Deutsche Bank concluded that "The value of... Canadian heavy oil sands... could be far lower than the market currently expects."
Investors have already expressed concerns to oil companies: during 2009, The Co-operative Asset Management led 44 institutional investors backed by $3 trillion of assets in a letter to 19 tar sands companies arguing that the industry had failed to justify the financial prudence of oil sands developments, given present costs and externalities soon to become additional costs, like carbon and land remediation.
In late 2009, ShareAction began co-ordinating efforts to secure the 100 shareholders necessary to bring a resolution to the Annual General Meetings (AGMS, shareholder meetings) of BP plc and Royal Dutch Shell plc, challenging the companies about their involvement in tar sands. We succeeded in persuading 142 shareholders in Shell and 120 shareholders in BP to co-file the resolutions. Investors sponsoring the resolutions include fund managers, pension funds, foundations and faith groups.
The resolutions sparked international interest and debate, with coverage in the UK including the Financial Times, Daily Telegraph, and Guardian. Coverage also appeared in Bloomberg, Het Financieele Dagblad (Netherlands) and the Canadian National Post.
ShareAction then turned its attention to persuading investors to vote for the resolutions. A significant percentage of Shell and BP shareholders supported the resolutions, sending a powerful message to those companies.
ShareAction's campaign actions were focused on the April and May AGMs of BP (results here) and Shell (results here), but you can get involved in campaigning on tar sands in other ways too. To find out about other campaigns on tar sands, visit our Tar Sands Links.
Above all, the tar sands campaign has laid the groundwork for pension fund members to really get engaged with their funds on other issues of concern, and we will continue to work to support people in making their voice heard. We hope you will join us - find out more on how to get involved.