BP shareholders overwhelmingly rejected a resolution that would have required the company to report on the environmental, financial and reputational risks of developing Canadian oil sands projects. The resolution was rejected by 85 percent of shareholders voting.
The news comes as a proposed pipeline to deliver crude from oil sands in Canada to Texas passed an important environmental hurdle.
BP was one of four major oil companies involved in oil sands extraction to be targeted by such shareholder resolutions. The other three, Shell, ConocoPhillips, and ExxonMobile, have their shareholder meetings next month.
Besides being more expensive to extract, crude oil derived from oil sands, also known as tar sands, emits 20 percent more CO2 over its life cycle than oil from conventional sources.
However, the rising price of oil, combined with the prospect of a major new source in a friendly, stable nation makes such development attractive, and Canada’s tar sands contain the second largest crude oil reserves in the world after Saudi Arabia.
Emily Stone of Green Century Funds, a green investment firm that is involved in the oil sands resolutions, said that while the resolution did not garner enough votes to pass, “the fact that 15% of BP shareholders did not vote alongside management on the resolution is a strong signal that the oil sands issue remains an important one for investors. This is particularly true since BP is a UK company and shareholder resolutions are far more rare in the UK than in the US.”
Pipeline Moves Forward
In more good news for oil sands entrepreneurs, the EPA has determined in a draft environmental impact statement that a proposed oil sands pipeline from Northern Canada to Texas would have “limited adverse environmental impacts.” The DEIS gives a major boost to the project, which is scheduled to begin construction this year, and is opposed by numerous environmental groups.
The proposed pipeline, called the Keystone XL, would run from Hardisty, Alberta to terminals in Nederland, Texas, near Port Arthur. The 1,980 mile long pipeline is a project of TransCanada, which hopes to start construction this year and finish in 2012. There are approximately 55,000 miles of crude oil pipelines in the US.
Tar sands development is expected to double or triple in the next decade, according to the National Resources Defense Council.