Chevron Faces Possible Brazil Drilling Ban
By Andy Rowell
Eighteen months after the Deepwater Horizon disaster, we have another country threatening to ban an oil company after a deep water spill.
It was Brazil’s turn Nov. 21 to say it might ban Chevron from drilling in its deep water oilfields as punishment for the 3,000 barrel oil spill from the company’s Frade project.
Chevron has pumped oil from Frade since 2009, spending $3.6 billion on the project so far. Like British Petroleum (BP) in the Gulf of Mexico, Chevron could have a lot to lose from this spill. Chevron is Brazil’s third largest operator.
According to press reports Nov. 22, the company could lose its status as a “class A” operator, denying it access to some of the most lucrative drilling waters in the world.
The company was fined R$50m ($28m USD) Nov. 21 by Brazil’s environmental regulator, Ibama, with “a further five or six” fines and damages planned.
The fine itself is small change to Chevron—being roughly equivalent to the value of three-and-a-half days output from the Frade field, which is producing about 79,000 barrels per day.
It's now the wider political consequences the company has to worry about.
Although Chevron has stopped the leak, the political fall-out continues, with the authorities calling the incident off the scenic coast “an environmental crime."
There are now accusations that Chevron misled the authorities about the scale of the accident, prompting a police investigation.
Moreover, like the Deepwater Horizon, it seems the tragedy should not have happened. Carlos Minc, Rio de Janeiro state’s environment secretary, said, “This accident could have been avoided. It wasn’t a lightening bolt from the middle of nowhere or a human failure.”
The leak once again demonstrates the ecological dangers of deep water drilling and comes as Brazil is gearing up to exploit the vast pre-salt reserves, that could contain a whopping 50-100 billion barrels of oil (although some of that could be industry hype).
As one of the largest oil companies in the world, Chevron can survive half a dozen fines for a relatively small spill. What it cannot survive is a ban in the lucrative waters of deep-water Brazil, where the company has invested heavily in the country’s offshore fields—not just in Frade.
“With pre-salt coming up, the government was already getting concerned after the disaster in the gulf,” Erasto Almeida, an analyst at Eurasia Group told the Financial Times. “Now, with this as well, they want to warn companies that they are going to come under a lot of scrutiny in Brazil.”
So both BP and Chevron will be under particular scrutiny now. How long will it be before we add another big oil company to the list?
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Wisdom the mōlī, or Laysan albatross, is the oldest wild bird known to science at the age of at least 70. She is also, as of February 1, a new mother.
<div id="dadb2" class="rm-shortcode" data-rm-shortcode-id="aa2ad8cb566c9b4b6d2df2693669f6f9"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1357796504740761602" data-partner="rebelmouse"><div style="margin:1em 0">🚨Cute baby alert! Wisdom's chick has hatched!!! 🐣😍 Wisdom, a mōlī (Laysan albatross) and world’s oldest known, ban… https://t.co/Nco050ztBA</div> — USFWS Pacific Region (@USFWS Pacific Region)<a href="https://twitter.com/USFWSPacific/statuses/1357796504740761602">1612558888.0</a></blockquote></div>
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Comparing rime ice and glaze ice shows how each changes the texture of the blade. Gao, Liu and Hu, 2021, CC BY-ND
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theDOCK aims to innovate the Israeli maritime sector. Pexels<p>The UN hopes that new investments in ocean science and technology will help turn the tide for the oceans. As such, this year kicked off the <a href="https://www.oceandecade.org/" target="_blank" rel="noopener noreferrer">United Nations Decade of Ocean Science for Sustainable Development (2021-2030)</a> to galvanize massive support for the blue economy.</p><p>According to the World Bank, the blue economy is the "sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem," <a href="https://www.sciencedirect.com/science/article/pii/S0160412019338255#b0245" target="_blank" rel="noopener noreferrer">Science Direct</a> reported. It represents this new sector for investments and innovations that work in tandem with the oceans rather than in exploitation of them.</p><p>As recently as Aug. 2020, <a href="https://www.reutersevents.com/sustainability/esg-investors-slow-make-waves-25tn-ocean-economy" target="_blank" rel="noopener noreferrer">Reuters</a> noted that ESG Investors, those looking to invest in opportunities that have a positive impact in environmental, social and governance (ESG) issues, have been interested in "blue finance" but slow to invest.</p><p>"It is a hugely under-invested economic opportunity that is crucial to the way we have to address living on one planet," Simon Dent, director of blue investments at Mirova Natural Capital, told Reuters.</p><p>Even with slow investment, the blue economy is still expected to expand at twice the rate of the mainstream economy by 2030, Reuters reported. It already contributes $2.5tn a year in economic output, the report noted.</p><p>Current, upward <a href="https://www.ecowatch.com/-innovation-blue-economy-2646147405.html" target="_self">shifts in blue economy investments are being driven by innovation</a>, a trend the UN hopes will continue globally for the benefit of all oceans and people.</p><p>In Israel, this push has successfully translated into investment in and innovation of global ports, shipping, logistics and offshore sectors. The "Startup Nation," as Israel is often called, has seen its maritime tech ecosystem grow "significantly" in recent years and expects that growth to "accelerate dramatically," <a href="https://itrade.gov.il/belgium-english/how-israel-is-becoming-a-port-of-call-for-maritime-innovation/" target="_blank" rel="noopener noreferrer">iTrade</a> reported.</p><p>Driving this wave of momentum has been rising Israeli venture capital hub <a href="https://www.thedockinnovation.com/" target="_blank" rel="noopener noreferrer">theDOCK</a>. Founded by Israeli Navy veterans in 2017, theDOCK works with early-stage companies in the maritime space to bring their solutions to market. The hub's pioneering efforts ignited Israel's maritime technology sector, and now, with their new fund, theDOCK is motivating these high-tech solutions to also address ESG criteria.</p><p>"While ESG has always been on theDOCK's agenda, this theme has become even more of a priority," Nir Gartzman, theDOCK's managing partner, told EcoWatch. "80 percent of the startups in our portfolio (for theDOCK's Navigator II fund) will have a primary or secondary contribution to environmental, social and governance (ESG) criteria."</p><p>In a company presentation, theDOCK called contribution to the ESG agenda a "hot discussion topic" for traditional players in the space and their boards, many of whom are looking to adopt new technologies with a positive impact on the planet. The focus is on reducing carbon emissions and protecting the environment, the presentation outlines. As such, theDOCK also explicitly screens candidate investments by ESG criteria as well.</p><p>Within the maritime space, environmental innovations could include measures like increased fuel and energy efficiency, better monitoring of potential pollution sources, improved waste and air emissions management and processing of marine debris/trash into reusable materials, theDOCK's presentation noted.</p>
theDOCK team includes (left to right) Michal Hendel-Sufa, Head of Alliances, Noa Schuman, CMO, Nir Gartzman, Co-Founder & Managing Partner, and Hannan Carmeli, Co-Founder & Managing Partner. Dudu Koren<p>theDOCK's own portfolio includes companies like Orca AI, which uses an intelligent collision avoidance system to reduce the probability of oil or fuel spills, AiDock, which eliminates the use of paper by automating the customs clearance process, and DockTech, which uses depth "crowdsourcing" data to map riverbeds in real-time and optimize cargo loading, thereby reducing trips and fuel usage while also avoiding groundings.</p><p>"Oceans are a big opportunity primarily because they are just that – big!" theDOCK's Chief Marketing Officer Noa Schuman summarized. "As such, the magnitude of their criticality to the global ecosystem, the magnitude of pollution risk and the steps needed to overcome those challenges – are all huge."</p><p>There is hope that this wave of interest and investment in environmentally-positive maritime technologies will accelerate the blue economy and ESG investing even further, in Israel and beyond.</p>
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