Tag Archives: water pollution

Chevron, the “Energy Link” between US and Latin America, Gamble with Corporate Reputation

Chevron is being sued for more than $11 billion by Brazilian prosecutors [for spilling at least 2,400 barrels of oil offshore Brail]Officials say they are preparing criminal charges against Chevron and its management….Eager to halt criticism from regulators, politicians and environmental groups, Chevron said last November that it “accepted full responsibility” for the incident. But federal prosecutor Eduardo Santos de Oliveira viewed that as an admission of guilt.

Chevron also faces fines of up to $121 million and has had its drilling license suspended in Brazil, where it has spent over $2 billion developing the largest foreign-run oil field.  The crisis in Brazil adds big new risks for Chevron in what could be a year of reckoning for its Latin American portfolio. It already faces an $18 billion environmental verdict in Ecuador, arising from decades of oil pollution in the Amazon region by Texaco, which Chevron acquired in 2001.  Its footing in Venezuela — where Chevron stayed after major U.S. oil companies Exxon Mobil and ConocoPhillips departed in 2007 following oil nationalizations — is also unstable.  Ali Moshiri, Chevron’s head of exploration and production in Latin America and Africa, is hailed as a “close friend” by Venezuela’s anti-American President Hugo Chavez.

Once a playground for U.S. oil investment, Latin America’s resource nationalism, toughening environmental standards, and courts have spooked Big Oil.  “Other oil majors have pulled back,” says Fadel Gheit, an oil analyst at Oppenheimer in New York. Chevron “is stuck on the ground, and a string of mishaps means things have gotten difficult.”  Despite all that, the company is proceeding with its newest Brazil project, the 140,000 barrel-a-day Papa Terra offshore field led by state-run Petrobras, scheduled to start next year….

Latin America is only a minor money maker for Chevron, whose operations span more than 35 countries. It pumps about 166,000 barrels-per-day of oil and equivalent natural gas from Brazil, Venezuela, Argentina and Colombia, or around 6 percent of its 2.67 million bpd output worldwide.  From a liability and public-image perspective, its stakes are far higher. If Brazilian litigation goes badly, Chevron may “rethink” its projects here, people familiar with the situation said.  Chevron’s worst-case scenario damages from Brazil and Ecuador could top the company’s $26.9 billion in 2011 profits.

In January, a judge in Ecuador upheld a ruling ordering Chevron to pay Amazon region plaintiffs $18 billion. Today, Chevron pumps no oil in Ecuador, but the judgment takes the case to a new phase where plaintiffs can attempt to seize Chevron’s assets around the world. One of their lawyers, Steven Donzinger, expects that process to begin within weeks.  Targets for collection may include Latin American countries where legal systems similar to Ecuador’s are seen as sympathetic.  Chevron has counter-sued Donzinger, alleging the Ecuador judgment was obtained through fraud. Since 2004, plaintiffs have leveled their own fraud charges against Chevron. Chevron had chances in past years to settle for a small fraction of the judgment. “It will have a hard time convincing plaintiffs to settle now for less than the full amount,” Donzinger said.  Chevron, which has pressed Ecuador’s government to void the verdict, is optimistic about an eventual victory, as are some analysts. Mark Gilman, an oil analyst at Benchmark in New York, said “Chevron will absolutely not settle this lawsuit.” Ultimately, he said, lawsuits against Chevron in both Ecuador and Brazil have little chance of badly hurting its finances.  But Chevron’s deputy comptroller, Rex Mitchell, warned in U.S. District Court last year that the Ecuadorians’ collection effort could “cause irreparable injury to Chevron’s business reputation and business relationships.”  Chevron may be spending $200 million per year in legal fees related to Ecuador alone, the plaintiff lawyers estimated. Chevron declined to comment on legal fees.

The risks have not stopped Moshiri, 60, a dapper Iranian-American, from jetting around the region and pressing Chevron’s board to maintain investments.  The reason is simple: South America pumps 12 percent of the world’s oil and holds more than 30 percent of its oil and gas resources, and its governments need the oil majors’ expertise.  Venezuela holds 297 billion barrels of reserves, and Brazil aims to become the world’s No. 3 producer by nearly tripling output to around 7 million barrels a day in 2020.  “Venezuela (is) too rich a prize for international oil companies to abandon,” Moshiri told U.S. diplomats, according to a June 2007 cable published by WikiLeaks. He also warned them a “vacuum” left by U.S. companies in Venezuela could be filled by Chinese, Russian and Iranian rivals.  Chevron does not break out investment plans by region, but a review of its Latin America projects suggests it could spend more than $10 billion this decade at five joint-venture oil or gas projects in Venezuela, three large offshore fields in Brazil, three gas fields in Colombia and Argentine concessions…..Moshiri has also served as a back-channel diplomat, State Department cables show. Venezuela “approached Chevron for assistance in dealing with U.S. issues,” Moshiri told U.S. diplomats in 2008. He also called Chevron “the energy link” between Venezuela and the United States, the top buyer of its exports….

Chevron did not put its “best foot forward” in Brazil, CEO John Watson told analysts.  The company initially denied responsibility for a sea surface oil sheen that led to detection of its leak. Earlier, it had experienced a pressure kick at a new Frade well. Oliveira says that Chevron drilled recklessly, allowing a surge of oil and “drilling mud” to puncture fragile rock and breach the seabed. He says Chevron knew the rock it was drilling through might not withstand the oil and gas pressure levels it could find in the reservoir. Chevron has said it took no undue risk at Frade, where its drilling plans were pre-approved by the ANP and environmental regulators.The prosecutor told Reuters the more than $11 billion civil award sought against Chevron is not based on a clear assessment of damages from the spill. The figure is meant to send a message.

Excerpts, By Joshua Schneyer and Jeb Blount, Analysis: Chevron’s Amazon-sized gamble on Latin America, Mar. 12, 2012

Nanotechnology and the Environment

Scientists working on the EC-funded research project Monacat,  are looking at how nanomaterials can remove water pollutants such as nitrates. “Nitrate reduction has been studied for decades; it’s very hard to do and it isn’t commercially viable,” says Alexei Lapkin, professor of chemical engineering at the University of Warwick, who works on Monocat.  Nitrates taken into the body through water can block oxygen transport. In severe cases this can starve tissues and organs of oxygen and lead to conditions including heart defects in babies. Nitrate levels are therefore strictly regulated, with an estimated €70bn–€320bn (£60bn –£274bn) spent every year across the EU removing nitrogen waste from water. The Monocat project has developed reactors coated with carbon nanotubes and nanofibres that could potentially remove nitrate pollutants at much lower costs. Lapkin says the most successful reactors will soon be chosen for patenting and further development.

Another European project, NanoGLOWA, is using nanotechnology to tackle global warming. The project aims to develop nanomembranes that can remove carbon dioxide from power plant emissions more efficiently than current methods. These membranes use nanomaterials to physically separate or chemically react with the carbon dioxide in flue gas streams.

As well as cleaning up fossil fuel use, nanotechnology is improving the viability of clean energy. Today, the most widespread photovoltaic solar cells are made of polycrystalline silicon and are relatively expensive, but nanotechnology is working to drive the costs of solar power down.  “It’s quicker and easier to grow a small crystal than a large one, and nanocrystals can be made in large quantities by simple chemical routes,” explains Jason Smith, leader of the Photonic Nanomaterials Group, University of Oxford. Photovoltaic cells made by “printing” nanoparticle inks are already commercially available.  “So far they have reached 17% efficiency,” says Smith. Normal polycrystalline silicon cells are about 20% efficient. “This is a pretty impressive achievement and demonstrates that nanomaterials can be almost as efficient as the standard polycrystalline silicon cells, while produced at a fraction of the cost.” An important next stage of the research will be to continue to improve the efficiency of these cheap nanoparticle cells…

“We will need at some point to replace internal combustion and diesel engines,” says Duncan Gregory, professor of inorganic materials at the University of Glasgow. “Hydrogen is an ideal fuel since one can extract a large amount of energy from it, and the process is green.”  However, storing hydrogen as a gas is both inconvenient and dangerous. “Solid-state storage, by which hydrogen is stored within a host solid, could overcome these problems, in principle making it possible to store a much higher amount of hydrogen in a relatively unreactive form,” Gregory says. He and his team have patented a nanomaterial called lithium nitride, similar in structure to carbon nanotubes and nanofibres, which may provide a way to store hydrogen safely inside a solid.

 

“It might be this material or similar that provides the breakthrough, or a completely different way of thinking,” says Gregory. “How soon this technology becomes ready depends on what the political will for change is. In these challenging economic times, real-terms government spending on research has fallen. Thankfully, energy remains a high UK research priority that will be essential, given all our environmental, economic and political concerns.”

New forms of glass that control the heat, light and glare passing through a surface are emerging. But these are based on nanotechnology procedures that, in some cases, have been around for decades.

Excerpt, Penny Sarchet, Essential matter, Guardian, Nov. 25, 2011

Uranium Mining v. Biodiversity in Grand Canyon

Mining has been banned within the Grand Canyon national park since President Roosevelt declared it a national monument in 1908. But since 2003, foreign companies have submitted 2,215 claims to prospect on the edge of the canyon.  Ken Salazar, the secretary of the interior, temporarily withdrew 1m acres of land from exploration in 2009 to allow time for an environmental assessment. Salazar must decide by July whether to ban “mineral entry” for two-thirds of the claims for the next 20 years…

Taylor McKinnon, campaigns director of public lands at the Centre for Biological Diversity, said the expansion of mining would threaten the park’s delicate ecosystem that ranges from desert scrub in the parched canyon to the Californian condors that wheel above the craggy outcrops.  He said: “The Grand Canyon is an international treasure and known for its breathtaking expanses. Its isolated seeps, springs and caves harbour a remarkable diversity of life, including species found nowhere else on earth. Uranium mining puts those species in the crosshairs.”

Mining companies have been drawn to the Grand Canyon area since the 1940s, because of large quantities of high-grade uranium that fuelled the nuclear weapons and nuclear power industries in the US.  But fast-paced nuclear power programmes in countries such as China and Korea are fuelling a new rush for “hard rock”, and have sent uranium prices soaring from $7.10 a pound in 2001, to $63.88 a pound in 2011.

Vane Minerals, a UK-based company, has submitted approximately 700 claims. Kristopher Hefton, the company’s director and chief operating officer, said: “The deposits are among the highest-grade deposits that you can find in the United States, so they are a good target for exploration and mining.”  Denison Mines, based in Canada, already operates one mine in the area with plans to reopen three further mines that were approved in the 1980s without being subject to the environmental review. Denison recently told investors that it will increase production by at least 10 million pounds a year by 2020, some of which will be destined for a new nuclear plant in the United Arab Emirates…

Exceprts from, Felicity Carus, Demand for uranium threatens Grand Canyon biodiversity, Guardian, Feb. 17, 2011