Tuesday 29 July 2008

Extracted from tar-soaked shale or sand, unconventional oil is an energy and resource intensive product - creating up to eight times as many CO₂ emissions as conventional oil production does, using three barrels of water to produce just one barrel of oil, and destroying large tracts of forests in the process. Scientists have predicted that, if fully exploited, the emissions from these oil sources could accelerate climate change to levels that would threaten species extinction on a huge scale.

WWF and CFS are therefore calling for a global halt to the licensing of new unconventional oil sources. They also want strong legislation - similar to the emissions standard currently in force in California - to be introduced in North America and Europe, prohibiting the sale of fuels with higher emissions than traditional oil.

"Unconventional fuel sources may seem attractive in the short term but ultimately the environmental and economic costs are unthinkable," warns WWF's senior policy officer, James Leaton. "The solution is to develop alternatives, such as renewable energy, rather than continue to indulge our addiction to oil."

Climate-hostile fuels

More than C$125 billion of oil sands projects have been announced for development by 2015. High energy, labour and material costs mean that developing an oil sands project is up to 20 times as capital intensive as conventional oil projects.

In addition to investing heavily in the development of US oil shales, Shell has announced an intention to produce 670,000 barrels of oil daily from Canadian oil sand by 2020, while ExxonMobil and BP are also both hoping to produce several hundred thousand barrels each per day.

"Our long-term future and economic stability depends on the development of a low-carbon economy within our lifetimes. We intend to use this report as the basis of our shareholder engagement with oil companies, and will be working with our 6.5 million customers to ensure that the UK and the EU have a robust legislative framework in place that will prevent these climate hostile fuels from entering the domestic market," said Head of Social Goals and Sustainability at CFS, Paul Monaghan.

WWF's Leaton added: "Companies and investors claim to recognise the need to tackle climate change and support international efforts such as Kyoto. In oil sands we have an activity that is going against this imperative and undermining Canada's Kyoto commitments, so it is time for investors to challenge this strategy."

Co-operative Financial Services is a UK group of businesses that includes The Co-operative Insurance, The Co-operative Investments and The Co-operative Bank.