Corporate capture?

THIS is a tale of Big Oil and how the Scottish Environment Protection Agency (SEPA) was captured by corporate interests. The moral of this tale is simple: if Scotland is to meet its climate change targets, SEPA needs to be reformed root and branch and its pro-big business board replaced immediately.

The beginning of February 2020 saw yet another repeat episode of intense “flaring” at the Shell-Exxon petrochemical complex at Mossmorran, near Cowdenbeath in Fife. Flaring occurs when the run-down plastics-making plant malfunctions and its natural gas feed from the North Sea has to be burned off into the atmosphere. This in turn lights up the night sky in Fife like bright sunshine and pumps CO2 into the atmosphere in vast quantities.

A damning SEPA report in November 2017 listed the Mossmorran monstrosity as the third biggest emitter of CO2 in Scotland (after INEOS at Grangemouth and the now-closed Longannet power station). At that point, the plant hit a 14-year high for CO2 emissions, unnecessarily pumping 885,580 tonnes of greenhouse gasses into the atmosphere. Shell’s separate operation at Mossmorran added another 200,000 tonnes of CO2 discharge, taking the total to 1.1 million tonnes.

As Scotland missed its 2017 emissions target by 2 million tonnes, half of that failure is down to Shell and Exxon at Mossmorran.

The 2017 SEPA report also showed that CO2 emissions from the Mossomorran plant had risen more than 25 per cent in just four years. Reason: the plant’s boilers are obsolete and constantly breaking down, resulting in the gas supply being flared off. This in turn results from years of inadequate investment in the plant by its corporate owners, Shell and Exxon. Both companies are desperate to sell of their local onshore and offshore assets and reinvest in more lucrative energy developments elsewhere on the globe.

SEPA claims that air quality and other standards are not being breached in the latest flaring episode, but that is just another way of saying SEPA standards are crap. The agency also claims that it has forced Exxon to upgrade the plant to reduce breakdowns. Indeed, SEPA (acting as corporate cheerleader for Exxon and Shell) says the recent flaring is a by-product of the upgraded plant being returned to full operation. We will see.

BIG OIL ON THE SEPA BOARD

Just who is SEPA? Its oversight board is appointed by Scottish ministers. Let’s see who they appointed. We’ll start with Nicola Gordon, who joined the board in January 2018 (just after that damning SEPA report on Mossmorran). She represents Big Oil on the SEPA board. Gordon spent over three decades with Shell, where she led teams running the giant Brent field and also Norway’s Ormen Lange development, which still supplies 20% of UK gas demand. Ms Gordon played a key role in creating global warming. Today, she is chair of the Scottish Energy Forum, which brings the energy industry together to plot strategy. Her SEPA register of interests is quite bold in admitting she still hold shares in Shell.

The presence of Nicola Gordon on the SEPA board represents an extraordinary potential conflict of interest – especially when we take events at Mossmorran into account. The Fife plant lies at the heart of Shell operation in Scotland and the North Sea. It receives natural gas liquids via a 220km underground pipeline from the Shell St. Fergus Plant near Peterhead, which processes gas from the UK and Norway. The Mossmorran complex separates these liquids into commercial products – propane, butane, ethane and gasoline – and exports them via the Braefoot Bay Marine Terminal to international customers.

How can SEPA properly retain independence to regulate such an industrial nexus with a Shell equity owner and former exec at its heart? This is not to accuse Ms Gordon of any impropriety – thought her judgement in agreeing to take a seat on the SEPA board seems unsound. The point is more that the SEPA board cannot be seen as impartial in these circumstances.

FRACKING FOR SCOTLAND

We are not finished. Also on the board of SEPA is Nick Martin, formerly Head of Corporate Development at The Weir Group PLC in Glasgow. Martin is a serious player. He is the guy behind Weir Group transforming itself into a global engineering conglomerate, which in a decade saw the company’s market value increase eightfold. Weir Group is now Scotland’s largest industrial company and remains a staunch opponent of independence. Nick Martin’s key strategy was to position Weir Group as a major supplier of pumping equipment in the US hydraulic fracking industry and the world’s premier supplier of this technology.

Fracking releases methane, the most virulent destructive greenhouse gas. Methane doesn’t stay in the atmosphere as long as CO2. But while it’s up there it traps heat at roughly 84 times the rate of CO2. Around 25 percent of current global warming is caused by methane. This is the legacy of Nick Martin. Weir Group, by the way, has now moved into mining in a big way.

Again, I make no specific charge against Mr Martin. I just think it is outrageous that a figure so central to the global fracking industry should sit on the SEPA board. It sends the wrong message except to Big Oil and Gas, who must see the Scottish Government as either a patsy or a covert ally. How can SEPA be seen as an independent regulator when it has key representatives of the global energy industry on its board? How would people react if Rupert Murdoch’s important executives were appointed to Ofcom, the broadcasting regulator? Well that’s the equivalent of what the Scottish government has achieved with SEPA.

The chair of SEPA since 2016 is Bob Downes. He is a former senior exec at BT and the iconic architects Conran-Roche – which sounds pretty innocuous even if it puts him squarely at the heart of UK big business. However, Mr Downes is a specialist in the shadowy world of satellite Big Data and its manipulation for corporate purposes. Between 2012 and 2017, he was chair of an Edinburgh-based company called Global Surface Intelligence. GSI uses real-time satellite and drone intelligence products “to answer questions about the state, condition, value and sustainability of both natural and man-made assets anywhere in the world”. GSI can map your forest assets including canopy height, tree species and “merchantable volume”.

We could go on. No Scottish public agency would be complete without a representative of finance capital. SEPA has Ms Julie Hutchison, from Aberdeen Standard Capital, the discretionary investment arm of Aberdeen Standard Investments. It is registered in Jersey, as a tax dodge and to hide its private clients. ASI offers investors participation in so-called Exchange Traded Funds (EFTs); i.e. tracker investment funds linked to movements in the price of oil, gas or other commodities. For instance, ASI has an ETF called by the mouthful: Aberdeen Standard Bloomberg WTI Crude Oil Strategy K-1. This invests in oil assets. Ms Hutchison advises charities where to invest.

CONCLUSION

SEPA is supposedly conducting a fresh investigation into unnecessary flaring and other violations at Mossmorran. This investigation was meant to be completed by November 2019, but three months on nothing has been published. Despite some light SEPA admonition last August, the plant continues to pump CO2 into the Fife sky.

During the December 2019 election campaign, the SNP’s Joanna Cherry, voiced her support for an independent inquiry into Mossmorran. Such an independent inquiry is long overdue. However, we also need to reform SEPA. For starters, the SEPA board has to be cleared of corporate representatives and restructured. In addition, the new SEPA should be given powers to directly prosecute and fine delinquent companies who break environmental regulations – powers which the English Environment Agency already has.

Meanwhile, Climate Camp Scotland has selected Mossmorran as the site for its 2020 camp, in July. Let’s hope the Scottish Government gets the message. Back in 2017, Environment Secretary Roseanna Cunningham turned down a request from Labour’s Alex Rowley for an independent investigation into Mossmorran, on the dubious grounds that she “must remain distant” from questioning regulatory decisions made by SEPA, because ministers might have to take a role in any subsequent appeals.

Three years on – with the flaring still taking place – such political insouciance puts a strain on public confidence in the Cabinet Secretary.