CONTENTS

Introduction letter 3

Topic A: The environmental impacts, and subsequent economic consequences,

of fracking 4

Introduction 4

History 4

Environmental and Economic Effects 5

Statement of the Problem 8

Current Situation 9

Bloc Positions 11

Questions to Answer 12

Conclusion 14

Suggestions for Further Research 15

Bibliography 16

Topic B: The role of oil and gas companies in the development of green

technologies 19

Introduction 19

History 20

Statement of the Problem 23

Current Situation 23

Bloc Positions 28

Questions to Answer 30

Conclusion 31

Suggestions for Further Research 32

Bibliography 34

Conference information 36

Position papers 37

Contact details 38

INTRODUCTION LETTER

Dear Delegates,

Welcome to the 15th session of the United Nations Environmental Programme at the

London International Model United Nations. At this conference, we will endeavour to use

the fresh ideas that the collective power of our young minds is capable of developing, in

order to suggest concrete measures to overcome some of the environmental risks of the

economic activity of the oil and gas industry. As future leaders of the international

community, it is up us to address the problems that previous generations have been

unable to solve.

Many of you may be taking part in an MUN conference for the first time. This conference

and the hopefully many that you will go to after this will enable you to develop the skills

that will not only help you be a successful delegate, but more importantly, a more

responsible citizen of the global community and a promising leader. These skills are those

of compromise, balanced negotiation, responsible legislation, foresight, consideration of

opinions and agendas of people you do not represent and balancing that with your own

ideals.

As we embark on the 3-day journey of debate, negotiation and the adoption of a

comprehensive and well-written resolution, and the preparation before it, my Assistant

Directors and I will be there to guide you through it all. Born and raised in Chicago,

Mehvish is reading International Politics at Brunel University. Jamie graduated with a

degree in Environmental Science from Queen Mary, University of London and is currently

working for the London-based waterway charity, Thames21. I am a German of Indian

origin, currently pursuing a Master’s degree in Aeronautics at Imperial College London.

All three of us look forward to hearing from you before the conference and working with

you and getting to know you as delegates and friends during it.

Warm regards,

Aditya Ranjan

Director of the UNEP at LIMUN 2014

TOPIC A: THE ENVIRONMENTAL IMPACTS, AND SUBSEQUENT

ECONOMIC CONSEQUENCES, OF FRACKING

Introduction

Fracking, or induced hydraulic fracturing in this context is a method of

extracting natural gas and petroleum among other fluids from deep inside

underground rock formations. Horizontal drilling coupled with the traditional vertical

drilling is used to create a well. Thereafter, a mixture of water with various chemicals

is pumped down the wellbore at high pressures in order to fracture the surrounding

rocks, thereby creating multiple fissures through which the fluid to be retrieved flows

into the well. A proppant, usually sand, is used to maintain the network of fissures.

Shale gas and tight gas are often procured using this method. While most wells

undergo fracking only once in their lifetime, multiple fracking to extend the lifetime

and increase the productivity of the well is becoming increasingly common. 1-8 million

gallons of water and approximately 40,000 gallons of chemicals are used to produce

the fracking fluid. For this reason, fracking is often associated with a significant

environmental cost. On the other hand, this method has made available once-

inaccessible oil and gas (O&G) resources, thereby increasing oil and gas production,

lowering prices and providing energy security. It is estimated that as of 2010, 60% of

all new O&G reserves were undergoing fracking. As of 2012, 2.5 million fracking jobs

have been conducted with 1 million of those being conducted in USA.

History

The primitive origins of fracking can be traced to the 1860s but it was first

conducted in its current form experimentally in 1947 and commercially in 1949. While

only 332 fracking jobs were conducted in the first year of commercial application,

production increases as high as 75% meant that 36,000 jobs were being conducted

every year by the 1950s. Drying up of conventional wells reducing supply, increasing

global energy demand and improvements in technology have prompted a sharp

increase in the fracking of O&G wells in the past 2 decades. Fracking in the current

technologically superior form was first conducted in 1999 at the Barnett Shale in

Texas, USA. USA is driving the trend in fracking, accounting for 40% of the world’s

fracked wells. The major boom behind this came after a 2004 report by USA’s

Environmental Protection Agency (EPA) concluded that fracking “poses little to no

threat” to drinking water supply (a major environmental concern before then), what is

often seen as a legislative failure in 2005 when the Energy Policy Act exempted

fracking from complying with the Safe Drinking Water Act and the Clean Water Act

and a 2009 attempt to repeal this exemption failed. The US Congress is expected to

review its policies on fracking in 2016, when an EPA study on the consequences of

fracking is expected to be completed. While the USA is expected to increase

dependence on fracking and aim to secure energy independence, France became the

first nation to ban it entirely in 2011. Tunisia has also banned it and there is

moratorium in place in parts of Canada. Most other nations where fracking is

conducted have some legislation in place to regulate it.

Environmental and Economic Effects

Fracking originated in USA and that is where it is most practiced today. For this

reason, a majority of the research done on the consequences of it also come from the

USA and are based on American geology and legislation.

While fracking is widely known to have a degrading impact on the environment,

the extent of this impact is widely disputed, particularly by those within the O&G

industry. With the involvement of legislators, lobbyists, government agencies, labour

unions, local administrations and O&G companies, there is a dire lack of coherence in

our understanding of how fracking truly affects the environment. Research often

indirectly financed by the O&G industry has tainted any large-scale research that has

been conducted on the subject and research conducted by government agencies and

environmental organisations is often too narrow in its scope. The aforementioned

EPA research, for example, is only studying the effects on drinking water supply. The

New York Times reported on lobbyists putting pressure on the EPA to limit the scope

of its studies, presumably to bury evidence that could harm the case for fracking. The

American Petroleum Institute has an annual budget of $180 million for this very

purpose. Lawsuits filed by victims living near fracking sites more often than not end in

a settlement including a gag order, which prevents them ever from discussing the

experience of living near a fracking site. The lack of quality research that objectively

and conclusively discusses the effects of fracking is a major hurdle in the effective

management of the risks associated with it.

Methane is the primary component of natural gas, for which fracking is most

often done. The National Oceanic and Atmospheric Administration estimates that 4%

of the methane produced by fracked wells is leaked into the atmosphere. The EPA

estimates 1.4% and the American Gas Association, an industry trade group, claims a

leakage of 1.2%. The primary effects of the release of methane into the atmosphere

are global warming and acid rain. Elevated levels of volatile organic contaminants

such as disulphides and xylenes as well as ozone have been detected near fracking

sites. Emissions from diesel-powered equipment and transport of water, chemicals

and particles contribute to the effect of fracking on air quality. Overall, estimates of

well-to-burner emissions of fracked natural gas are between 3 and 12% higher than

conventionally procured natural gas.

Each fracking job usually uses up to 3.5 million gallons of water, with larger

projects using up to 5 million gallons. Some wells undergo multiple fracking and each

well averages 3-8 million gallons over its lifetime. This large-scale use of water diverts

resources from supplying water for drinking and irrigation of fields, in addition to

lowering the water table and drying up natural water resources. This is particularly

relevant in arid regions, such as in South Africa where farmers have formed an

organised grassroots-lobby to oppose fracking. The case of Barnhart, Texas, USA

where aquifers have run dry due in part to fracking is particularly ominous. Suggested

solutions include recycling the water and using carbon dioxide instead of water for

high pressure pumping.

40,000 gallons of 600 chemicals including carcinogens and toxins such as lead,

uranium, mercury, radium, hydrochloric acid and ethylene glycol are used to produce

the fracking fluid. Once this fluid is pumped down the well, these toxic substances are

deposited in the ground, seeping to the water table and to other groundwater

sources. Only 353 of the 600 chemicals are well-described in scientific literature and

the health effects on humans and wildlife of these chemicals is essentially

undocumented. Claims of water contamination by well owners and operates have

steadily increased over the past decade. 15-20% of the fracking fluid returns as

flowback rich in uranium, radon, radium and salt. Unsafe storage and disposal of this

water is a significant environmental hazard. Radioactivity of the wastewater is of

particular concern. Duke University found that radioactive wastewater in

Pennsylvania, USA was causing an increase of 200 times in radium levels, similar to

wastewater at licensed radioactive waste disposal plants and significantly higher than

regulated levels.

Fracking routinely causes microseismic events which can only be detected by

extremely specialised equipment. The British Columbia Oil and Gas Commission

reported on 38 earthquakes between 2.2 and 3.8 on the Richter scale that occurred in

the Canadian Horn River Basin between 2009 and 2011, attributing them to fluid

injection in the proximity of pre-existing faults.

The 353 chemicals of the 600 used in fracking fluid are known affect sight, skin,

blood, nervous response, immunity, the cardiovascular system and renal function.

Data on the probability of exposure to these chemicals based on current practices is

limited, as is the direct impact on plants and animals. Some effects of the fracking are

known while others are still being studied. Any legislative action would aim to

understand all the risks, mitigate them, and then balance them with the economic

benefits.

The International Energy Agency estimates that 208 trillion cubic metres of

shale gas, 76 trillion cubic metres of tight gas and 47 trillion cubic metres of coalbed

methane are still procurable. Fracking is enabling these resources to be recovered

from otherwise inaccessible locations and is also making the recovery economically

viable. Access to these O&G resources is providing energy security in the medium

term. The USA, once among the largest energy importers is posited to become a

major energy exporter in the coming decades because of its natural gas reserves.

German Engineering firm, Linde estimates that current and yet-to be identified

natural gas reserves made available through fracking could last between 100 and 150

years. As coal and conventional oil reserves decline, the world economy is depending

on alternate sources of energy, this being one of them. The National Petroleum

Council (USA) suggests that 70% of natural gas development in North America will

arise from fracking and that 45% of natural gas and 17% of oil reserves in the USA will

dry up in the next 5 years without fracking. IHS, an American market intelligence firm,

reported that fracking already supports 377,000 jobs directly and 2.1 million indirectly

in the USA. Cheaper gas prices will also add $3,500 on average to each American

household and $346 billion will be invested in capital between 2012 and 2025

according to it. On the other hand, investment in the development of renewable

energy is likely to reduce as a result of competition from fracked gas and oil.

Statement of the Problem

While fracking is likely to transform the energy industry through security and

lower costs, fracking is associated with environmental degradation. The first problem

is that of a lack of objective and conclusive data on the subject. The expected effects

include contamination of groundwater, pollution of air, health concerns arising from

exposure of humans, flora and fauna to toxic chemicals, water shortage and seismic

events. The environmental effects need to be better understood by the global

community. These risks need to be weighed with the economic benefits and these

risks need to be managed effectively, either through balanced regulation or by taking

the extreme step of banning the method of fracking entirely.

Current Situation

The fast paced development of society and the exponential growth of the

global population have increased the amount of energy required to sustain the

changing lifestyles. This pushes states to find resources that would help meet those

demands in the most efficient and cost effective way possible. Most states have

decided to continue using non-renewable conventional resources (fossil fuels, nuclear

energy) for electricity and gas production as it is cost effective for the state and the

technology is there to efficiently yield high amounts of energy from those resources,

it accounts for nearly 81% of world energy usage (Peduzzi, 2012: 1). Other states

have tried to incorporate renewable resources to meet energy demands (sunlight,

wind, geothermal heat, water, biomass) but it is a not rapidly developing like non-

renewable energy. It is more expensive as the technology has not been fully

developed to efficiently yield large amounts of energy from these resources.

Moreover, the benefits to using renewable resources are seen on a long term scale

mainly due to the expenses involved in developing it within the state.

With this in mind, the unconventional technique of collecting gas and oil from

shale is becoming a controversial issue, because some states want to adopt the

practice to meet energy demands and decrease the electric and gas bills for their

citizens. On the other hand, some states are against the practice entirely due to its

impact on the environment. There have been discussions and research into the

implications as well as the benefits for hydraulic fracturing. This technique would

help many states become energy independent but at what cost will they gain this

independence. For this reason, fracking has caused a number of public protests

around the world due to the implications it has for the environment and public health

(CTV News Staff, 2012). The protests have led to many states holding a moratorium

for scientists to look into the environmental impacts of fracking and possible ways to

innovate the current technology to make it environmentally friendly and efficient in

extracting shale gas and oil (Galbraith, 2013). A few examples of the environmental

issues are the use of chemicals in the water to break the shale which may contaminate

local water wells. The degradation of the natural landscape to build the wells needed

for hydraulic fracturing. Also, the amount of water resources wasted in the process of

breaking the shale is problematic in a time when there is a clear water quality and

quantity issue worldwide. Another reason is the possibility of methane and other

greenhouse gases being released into the atmosphere in greater proportion

accelerating climate change (Peduzzi, 2012: 2, 5-6).

On the economic side, according to recent studies, a good number of countries

on each continent excluding Antarctica have the potential for hydraulic fracturing of

shale and coal beds (US EIA, 2013). The United States long history with fracking has

stirred a fracking revolution to use shale and coal gas to meet the world’s energy

demands. This fracking revolution has caused mixed reactions across the globe,

states in Indo-Pacific region like India, South Korea, and Japan want the United States

to increase their capability for hydraulic fracturing and soon make it readily available

in a liquid state to trade in large quantities for a cheaper price. Meanwhile, China,

Indonesia, and possibly Malaysia want to pursue fracking to become energy

independent and make a profit. Australia is using hydraulic fracturing themselves to

boost their economy but for coal beds not shale beds while Argentina is quickly

becoming a fracking leader in South America (Wolfgang, 2013; Campbell, 2013; Cain,

2013). In Europe, some states have banned the practice while others have placed it on

moratorium until research is completed on the technology and measures that could

be taken to make it efficient and environmentally friendly, but then there are a few

states that are enthusiastic about pursuing it but do not have enough shale gas to

export commercially (Economist, 2013; Alexeev, 2013). In Africa, the economic boost

is the major factor that states like South Africa and Botswana are trying to use

fracking, but they are not fully able to due to the lack of finances and resources to

develop the technology needed to pursue fracking (Barbee, 2013).

Bloc Positions

This section does not showcase permanent official bloc positions on the issue of

hydraulic fracturing but rather an overview of possible bloc positions that can form in

the debates.

Europe (not just the European Union)

Not a unified position with a few states who have banned the practice altogether to

other states that have placed it on moratorium. Europe cannot pursue fracking

because of the large amount of protests that have occurred over the environmental

implications, but also that some states cannot produce enough shale gas to export

and meet international energy demands.

Indo-Pacific Region and South Asia

Asia has been developing at a very fast pace but it needs more energy resources to

fuel their development. Some states are trying to develop their own fracking

industries, while others are depending on the United States

The Americas

A few states have a large potential for fracking and are developing it as fast as they

can to support their own energy demands as well as international demands. Again,

not everyone is embracing fracking in the continent but the few who are show great

potential to control the fracking market in the future.

Africa and the Middle East

Primarily in the African states, a couple of them have pursued fracking but have come

to complications with the lack of resources and money needed for drilling. Also, the

legal issues concerning permits and regulations have halted the states from fully

pursuing fracking.

Questions to Answer

1. If your state is against hydraulic fracturing:

a. How do they meet their energy demands?

i. Do they use renewable resources?

ii. Or do they rely on conventional methods of extracting fossil

fuels?

iii. Or do they use nuclear power?

b. Why are they against fracking? It may seem like there is an obvious

answer but some states are against it for environmental reasons, others

because they are not capable of pursuing it. Figure out the reason for

your state, it will help you in debating your position in the conference.

2. If your state uses hydraulic fracturing:

a. Figure out how much of the state’s energy demands does it meet, like if

it only meets 20% of it while the other 90% is met by electricity and gas

produced by conventionally extracted fossil fuels.

b. Why is your state capable of using the fracking method?

c. What is your state’s reason for using this method? Is it to becoming

energy independent from another state for fuel resources? Or is it

because they are running out of fossil fuels from the conventional

method for extraction?

d. Is the decision to use fracking a decision made by solely by your

government or has there been unrest among the general public about

this technique?

i. Have there been protests, legal actions, etc against fracking?

e. Has your state placed fracking under a moratorium to review the risks

and problems that could stem from this technique?

3. Solutions

a. Which states have the potential for hydraulic fracturing?

i. Are they spread relatively evenly across the continents that they

can regionally and/or internationally export the shale gas?

ii. How should the UNEP become involved to oversee that states

commit themselves to responsibly use fracking without

compromising the environment?

iii. Does hydraulic fracturing endanger the lives the citizens who are

unaware of the affects? Is this a breach of their human rights for

access to water, arable land for farming, etc? What can the UNEP

do to fix this situation if that is the case?

iv. What can states do at the grassroots level to educate citizens

about hydraulic fracturing?

v. Can a timeline or roadmap be implemented for all states to use

hydraulic fracturing as a means of moving towards renewable

resources for energy?

1. How to use the profits from fracking to possibly fund the

development and research of green technology?

Conclusion

Hydraulic fracturing of shale and coal beds is seen as a possible way for gaining

an economic boost and accelerating a state’s socio-economic development but it is

still an unconventional method for extracting a non-renewable resource which has

environmental and economic implications that need to be dealt with. There have

been discussions that this new age of natural gas from shale and coal beds could help

states gradually transition from non-renewable resources to renewable ones. Plus,

the international market for energy resources will change with new states taking

control once they extract enough shale or coal gas for commercial distribution.

However, it is not just the economic benefits that should be discussed nor just

the environmental implications. Right now, the situation is that it is only the ‘Elite’

(the government, the oil and gas companies) who have the extensive knowledge of

hydraulic fracturing and make the decisions on where and when to do it. This topic is

about understanding hydraulic fracturing and it is our job as delegates in the United

Nations to uphold our duty to think of the citizens first and foremost. Many of the

people in this world do not understand what fracking is but they end up being the

victim of it in some shape or form. In this conference, we need to think about how to

better educate our citizens about fracking so that they can make their own decisions.

There are a few examples where in various states, once the people learned about

fracking they made their own decision on whether it was, to blatantly state it, good or

bad. This is what the United Nations is for, to promote better relations between the

people and those who govern them, to help them have a voice on matters that can

affect their lives. Delegates should think about what is best for their people as well as

their state as a whole in relation to fracking.

Suggestions for Further Research

Before this goes into the suggestions concerning fracking, it should go without

saying that we are hoping for a productive weekend with a fruitful and intellectual

discussion on this very important issue. For this reason, it is HIGHLY recommended

that if you do not already have prior experience or knowledge of the environment,

this is a helpful list of areas you should familiarize yourself with so that you can be

able to contribute to the debates.

1. Know what are non-renewable and renewable resources

2. Understand the difference between conventional and unconventional gas and

oil (hydraulic fracturing from shale is an unconventional form)

3. Look into the environmental issues that are caused by using fossil fuels

Fracking Research Suggestions

1. Check the costs of obtaining natural gas and oil from hydraulic fracturing in

comparison to the cost of extracting fossil fuels through the conventional

method.

2. Research which regions and/or specific states have the potential for fracking

3. Read the Golden Rules for the Golden Age of Gas to understand what

researchers have put forth as solutions if states are to pursue fracking

4. Read the Geopolitics of Natural Gas: Report of Scenarios Workshop of Harvard

University’s Belfer Center and Rice University’s Baker Institute Energy Forum to

learn of the different scenarios that can occur in international politics in

relation to fracking as politics does play a major factor in this issue

5. Read UNEP Global Environmental Alert System Publication, Gas Fracking: Can

we Safely Squeeze the Rocks, for the fracking process and environmental

implications.

Bibliography

Alexeev, I. (2013). Shale Projects and Gas Fracking in Eastern Europe, Montreal: Centre

for Research on Globalisation.

Barbee, J. and Dutschke, M. (2013). Botswana Faces Questions Over Licenses for

Fracking Companies in Kalahari, Johannesburg: The Guardian.

Cain, G. (2013). Will Asia’s Economies Benefit from Fracking, Daegu: Global Post.

Campbell, C. (2013). Indonesia Embraces Shale Fracking-But At What Cost, New York:

Time.

CTV Staff. (2012). Thousands Protesting Fracking in 150 Cities, Five Continents,

Toronto: CTV News.

Economist. (2013). Frack to the Future: Unconventional Gas in Europe, New York:

Economist Group.

Environmental Information Administration. (2012). Technically Recoverable Shale Oil

and Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside

the United States, Washington D.C: U.S. EIA.

Galbraith, K. (2013). Some in Europe are Rethinking Opposition to Fracking, New York:

New York Times Company.

Healy, D. (2012). Hydraulic Fracturing or ‘Fracking’: A Short Summary of Current

Knowledge and Potential Environmental Impacts, Aberdeen: Environmental

Protection Agency.

International Energy Agency. (2012). Golden Rules for a Golden Age of Gas, Paris: IEA.

Lee, R. (2013). UN Debate on Fracking As Part of SDGs, Johannesburg: Open Society

Initiative for Southern Africa.

O’Sullivan, M. and Jaffe, A. (2012). The Geopolitics of Natural Gas: Report of Scenarios

Workshop of Harvard University’s Belfer Center and Rice University’s Baker Institute

Energy Forum, Cambridge: Harvard Kennedy School.

Peduzzi, P. and Harding, R. (2012). Gas Fracking: Can We Safely Squeeze the Rocks,

Sioux Falls: UNEP Global Environmental Alert System.

Wolfgang, B. (2013). Fracking’s Rise in U.S. Inspires the World, Washington D.C:

Washington Times.

All websites were accessed in December 2013:

http://en.wikipedia.org/wiki/Hydraulic_fracturing 1 and 2

http://www.dangersoffracking.com

http://www.what-is-fracking.com/what-is-hydraulic-fracturing/

http://www.bbc.co.uk/news/uk-14432401

https://www.asme.org/engineering-topics/articles/fossil-power/fracking-a-

look-back

http://energywithjr.quora.com/The-History-of-Fracking-A-Timeline

http://www.nytimes.com/2011/03/04/us/04gas.html

http://www.eenews.net/stories/1059961204

http://www.ipsnews.net/2013/08/govt-energy-industry-accused-of-

suppressing-fracking-dangers/

http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html

http://serc.carleton.edu/NAGTWorkshops/health/case_studies/hydrofracking_w.html

http://www.scientificamerican.com/article.cfm?id=shale-gas-and-hydraulic-fracturing

http://www.netl.doe.gov/technologies/oil-

gas/publications/EPreports/Shale_Gas_Primer_2009.pdf

http://www.nytimes.com/2011/12/31/world/south-african-farmers-see-threat-from-

fracking.html?_r=0

http://www.theguardian.com/environment/2013/aug/11/texas-tragedy-ample-oil-no-

water

http://www.psehealthyenergy.org/data/Bamberger_Oswald_NS22_in_press.pdf

http://www.cbc.ca/news/canada/british-columbia/fracking-causes-minor-earthquakes-

b-c-regulator-says-1.1209063

http://www.ohiodnr.com/Portals/11/pdf/wastewater-fact-sheet.pdf

http://www.theguardian.com/environment/2013/oct/02/dangerous-radioactivity-

fracking-waste-pennsylvania

TOPIC B: THE ROLE OF OIL AND GAS COMPANIES IN THE

DEVELOPMENT OF GREEN TECHNOLOGIES

Introduction

Energy security has been very topical, particularly in the past decade where the

importance of the Intergovernmental Panel on Climate Change has been recognised,

and public awareness has led to wide coverage of Environmental Summits.

As populations are projected to increase and economies grow, there will be

great pressure on the energy industry in meeting energy demand. Energy

consumption is estimated to grow by 56% between 2010 and 2040 (EIA 2013).

However, from recent climate reports, it is with great urgency that energy is delivered

in a sustainable, environmentally friendly and “greener” manner at a much greater

scale than previous UN targets state.

Oil and gas companies such as BP and Royal Dutch Shell have a pivotal role in

every part of the energy supply chain. Since fossil fuels (oil, gas and coal) account for

~80% of global energy, oil and gas companies have a lot of stake and power in energy

issues (REN21 2012, EIA 2013).

While oil and gas companies suggest that their business objectives are long

term and “sustainable” for future generations, there is increasing concern that global

oil production has already reached its peak (Lloyd and Subbarao 2009). While coal has

shown a general trend of being phased out (REN21 2012), there has been controversy

surrounding further gas exploration operations (particularly fracking).

The Kyoto Protocol (1992) and the consequent environmental summits since

have proven climate science to be credible. Greenhouse gas (GHG) emissions,

primarily from the extraction, processing and burning of fossil fuels contribute heavily

to environmental pollution and global warming (OECD 2012a). The consequences of

further pollution were acknowledged of having negative effects to people’s health,

the economy, and resilience of current infrastructure and technology (Harrison 2006,

UNEP 2012).

Making a transition to sustainable and renewable energies such as wind, solar,

biomass and hydropower was of priority for the UNEP as this would decrease GHG

emissions and combat the effects of global warming- as well as having many other

positive impacts. The UNEP stated its hopes for a “Green Economy,” where energy

would be low carbon emitting, resource efficient, socially inclusive, minimize loss of

biodiversity and comply and provide with “ecosystem services” (UNEP 2012).

History

It is often believed that the oil and gas industry (O&G) tends to ignore long-

term sustainability and prioritise short-term monetary gain, circumvent regulation the

best it can and abuse the high dependence of the entire world economy on it for

energy. This tendency is responsible for various major environmental disasters.

Millions of barrels of oil have spilled into the ocean in the past 10 years alone. The

Deepwater Horizon or BP Oil Spill refers to the explosion and sinking of the

Deepwater Horizon oil rig in April 2010 and the spillage of 4.9 million barrels of oil as

the well remained uncapped for 87 days. BP has paid some $42.5 billion in

settlements but this figure is not even significant compared to the environmental

cost. The Oil Spill Commission cited “a rush to completion” and the lack of “a culture

of safety” as the root causes of the spill. BP as well as the operator, Transocean, and

contractor, Halliburton were determined to have aimed to cut costs to unreasonable

extents, thereby triggering a blowout. This is the latest of many incidents that are

evidence of a systematic failure of the O&G industry to prioritise environmental

safety and sustainability.

The development of green technologies related to the O&G industry has been

in two forms: the development of alternative sources of energy and the development

of technologies to replace energy inefficient or environmentally degrading methods

of procuring oil and gas. While data on how O&G companies are making their value

chains more environmentally sustainable is limited, BP is known to have invested $7

billion in alternative energy between 2005 and 2012, ExxonMobil has invested $600

million in developing technologies to convert algae to oil while Shell is investing

heavily in biofuels in Brazil. While these figures are only a fraction of what Big Oil

could be investing in these technologies, the $71 billion invested by it in low emission

technology makes it among the largest investors in the industry. $7 billion of this is in

renewable energy while the rest is within the existing value chain.

The aforementioned investment in existing value chains has clearly yielded

good results. As shown by the adjoining figure, which shows environmental data

released by Shell for its own operations, there has been a slow but generally steady

decrease in emissions over the past decade, despite an increase in production.

As with any changes which affect the entire world economy, adoption of newer

standards by the entire industry is a slow process. Any changes in the industry need to

be supported by steady investment, research, training, etc over a period of time and

all markets do not respond as quickly as others. This is evident from the adoption of

ultra-low-sulphur diesel, which started in Europe, is happening in North America and is

yet to be done across the board in Asia, South America and Africa.

The O&G industry has shown versatility in its operations in terms of the

products it offers and in which markets when the economic viability has been clear.

When the administration of Delhi, India legislated that all public and commercial road

transport had to run on Compressed Natural Gas (CNG), partnerships with Indian O&G

companies ensured that demand was met. The same goes for Brazil where major O&G

companies have contributed heavily to the biofuel supply. A similar model whereby

legislative action provides for the creation of a market for a product at a specified

time in the future, allowing for supply to adapt at a comfortable pace can be

replicated.

A paradigm shift that can inspire one in the O&G industry is that of the

emergence of electric cars. While large Automobile firms were reluctant to invest in

alternative technologies, smaller firms aimed at early adopters pioneered the

technology behind electric cars. The first electric car to become commercially

available at a large-scale was manufactured by the silicon-valley start-up Tesla. ‘Big

Auto’ or firms such as Toyota and BMW have responded to the competition after the

market for electric vehicles opened up. It is not unreasonable to expect that

supporting smaller firms working with alternative energy will provide the competition

and create the market which will encourage Big Oil to follow suit.

Lobbying based on short-term strategies and the various loopholes in

environmental regulation and taxation that O&G companies can easily abuse by virtue

of their size and global presence acts as a barrier to a long-term shift in energy policy.

It is cheaper and more economically viable in the present business climate to maintain

current practices rather than radically shift their value chain. It is this characteristic of

the global energy market that needs to be changed in order to encourage investment

in green technology. The O&G industry is among the largest in the world with revenue

of $4.5 trillion in 2013 and the key to nudging to act a certain way lies in a large-scale,

coordinated global effort.

Statement of the Problem

Oil and Gas (O&G) companies tend to base business decisions on short-term

profitability and any potential investment competes with others that offer extremely

high rates of return. While the lack of adherence to regulation and the disasters that

have followed have brought a lot of negative publicity to the industry, high

dependence of the world economy on O&G has enabled it to maintain its profits

without changing its practices. With all the financial resources the O&G companies

have available to invest in reducing the environmental impacts of their extremely

polluting products while also investing in alternative products, it is important to

change the business climate so that investing in green technology becomes directly

beneficial for these firms.

Current Situation

Environmental Impact of Oil and Gas Exploration

Since the “Towards a Green Economy” report in 2011, it has been difficult to

measure the success of governments in adopting renewable energies. Oil and gas

companies have a large stake in the deliverance of fossil fuels, especially when most

of these companies have historical principles embedded in oil and gas production.

Despite this, it has been important for gas and oil companies such as British

Petroleum (BP), Royal Dutch Shell and Exxon Mobil to project an “environmentally

friendly” image by marketing their investments in renewable technologies. Regarding

wide-spread environmental concern, oil and gas companies have been the culprits of

horrendous environmental damage during their operations (Ocean Planet 1995,

Harrison 2006, Thompson 2010). Most evidently, oil spills have sparked the public’s

concern on the ethics and conduct of these transnational companies. For example the

2010 BP Oil Spill in the Gulf of Mexico, releasing 570,000 tons of crude oil into the

ocean has had a proven negative effect on food chains and human health, similarly to

the 1989 Exxon Valdez spillage in Alaska where 40,000 tons of crude oil entered the

ocean (Harrison 2006, Thompson 2010). Such events have created a negative image,

with vast social and economic costs to these businesses. Gas leakages and fracking

have also been subject to intense environmental scrutiny, contaminating water

supplies and inhibiting ecosystem functions (Harrison 2006).

To make these truths more harrowing; most global oil and gas leakages have

either been unreported or their causes have remained unaccounted for (Harrison

2006). This begs the question of environmental transparency of energy businesses,

despite the evidence of growing environmental consciousness in the biggest energy

players (CIMA 2010, Royal Dutch Shell 2013).

Table 1: Biggest oil and gas companies in the world (Forbes 2013):

Company Production

(Barrels/day)

HQ

Saudi Armco 12.5 million Saudi Arabia and the Middle

East

Gazprom 9.7 million Russia

National Iranian Oil Co. 6.4 million Iran

Exxon Mobil 5.3 million

PetroChina 4.4 million China

BP 4.1 million

Royal Dutch Shell 3.9 million

Pemex 3.6 million Mexico

Chevron 3.5 million

Kuwait Petroleum Corp. 3.2 million Kuwait

Challenges and Opportunities:

Opportunities for Governments:

1. The term “energy” in the World Economic and Social Survey (2011) is

considered to be a “public good,” whereby governments have the power to

determine the way oil and gas companies operate as well as what kind of

energy the deliver to their country. While oil and gas firms are actually

transnational companies, 75% of all the oil and gas companies are state-

controlled including some of the biggest businesses in the industry (Table 1),

which means that global and national government policy has a direct influence

on fossil fuel production (Schweitzer 2010).

2. It is believed that the redundancy of oil and gas markets would lead to

catastrophic job losses throughout the world, the “Green Economy” is meant to

create sustainable jobs based on specialised technologies and new niches

(Matos and Hall 2007, World Economic and Social Survey 2011, UNEP 2012). It is

important for policies to highlight these economic and social opportunities and

create a better public perception of the transition of fossil fuel dominant to a

“green” economy.

3. Governments continue to supply energy companies with subsidies for fossil

fuels with an estimated USD 45 billion to 75 billion spent in OECD countries

from 2005 to 2010 (OECD 2012a). It is estimated that GHG emissions could be

notably reduced if these subsides were removed entirely. From the IPCC 5th

Assessment Report (2013), it is extremely important to dramatically reduce or

even stop further GHG emissions. If renewable and greener energies are

adopted, this could significantly lessen the energy gap that many civilians face

today (Lloyd and Subbarao 2009, OECD 2012b), which opposes the argument

that green technologies are more expensive than the conventional fuels. In

fact, these views are overturned by a report which suggests that “the

estimated annual investment to achieve universal access to modern sources of

energy is less that an eighth of the cost of annual subsidies for fossil fuels-”

(OECD 2012a).

4. It is also evident that the terms energy, new technology, climate change, “green”,

pollution and sustainability are interpreted differently by different oil and gas

companies (Schweitzer 2010), which suggests that there is no real protocol or

standardisation for environmental terminology. It is important that

governments make these terms clear.

Challenges for Governments:

1. Oil and gas companies are continuing to exploit fossil fuels, and there are plans

in place for many of these to take financial and environmental risks to explore

unconventional oil. There has already been wide-scale removal of boreal forest

in Athabasca, Canada to access the tar sands. Extracting the bitumen (hard oil)

from these soils has been proven to be a difficult and energy consuming

process, and also risky for these operations to occur in National Parks (Matos

and Hall 2007). However, hard oil or unconventional oil exploration is appealing

because of the high resource potential. In places such as the Orinoco river

basin, Venezuela, whose tar sands have more than 200 billion barrels of

resource potential, and the Arctic Ocean that has 90 billion barrels of resource

potential, there is a clear conflict between accessing energy and the potential

environmental impact. How can the UNEP encourage these companies to defer

from these explorations when there are multi-million dollar investments at

stake?

2. The Extractive Industries Transparency Initiative (EITI) records how much oil,

gas, and mining companies pay to the government and how much the

government receive. This is a tool that means to combat corruption in the

industry (OECD 2012b, EITI 2013). Many countries and companies choose not to

be transparent in their operations and geopolitical issues that involve the oil

and gas industry continue to occur. The greatest oil spill recorded was in

Kuwait, where 800,000 tons of crude oil was spilled as a military strategy during

the Gulf War in 1991 (Harrison 2006, Thompson 2010) is an example of these

geopolitical tensions. OPEC (Organisation of Petroleum Exporting Countries) is

a cartel that controls the costing and vast majority of oil and gas resources in

the world, and therefore at the forefront of geopolitics. Regarding how

political tensions in these countries can contribute to energy price volatility,

the main challenge for the UNEP is to consider what changing to “greener

technologies” would mean for price stability. In addition, without an agreed

level of transparency, it would be difficult to measure the success of oil and gas

companies in incorporating green technologies.

3. Strengthening the government’s role in the energy market would ensure

better investments and further experimentation and development of green

technology. It is understood that more mature green energies need to be

utilised in specific locations, i.e. solar energy would be more useful in countries

that have long sun exposure and stronger radiation (REN21 2012). This

committee needs to think about how they can make a resolution where they

can integrate all governments to invest and develop green energies while also

being specific to locations. Delegates should also take an economic perspective

on the issue, and think about how renewable energy would affect the current

market (Matos and Hall 2007, Lloyd and Subbarao 2009, CIMA 2010). Since the

energy sector is a dynamic market, it is very important to consider and agree

upon technological intelligence rights and patents that could hinder universal

affordability and access to energy that widen the energy gap (Lloyd and

Subbarao 2009). Remember that energy companies also have an influence on

governments and spend vast amounts of money lobbying government policies

(Schweitzer 2010).

Bloc Positions

OECD countries have an important role in global economic markets. They

continue to supply oil and gas corporations with subsidies, which helps them to

maintain the exploitation of fossil fuels. Non-OECD countries, particularly emerging

economies and super-economies such as the BRICS are projected to consume a lot

more energy and also emit more GHGs, while OECD consumption may stabilise (EIA

2013).

OECD (Organisation for Economic Co-operation and Development) Member

States: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark,

Estonia, Finland, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan,

Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland,

Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, UK and

USA

OPEC is an oil cartel that has a pivotal role in oil pricing. A high percentage of their

economy is reliant on oil and gas exploration and also the reason for their economic

growth and geopolitical power. Countries that have been mentioned in Table 1 also

have a large stake in the oil industry, and also for poorer countries such as Azerbaijan

whose economies have grown as a result of their oil reserves (OECD 2012b).

OPEC (Organisation of Petroleum Exporting Countries) Member States:

Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,

United Arab Emirates and Venezuela

The infrastructure of high oil consuming countries may be dependent on conventional

technologies, which means that a dramatic transition to “greener” energies may be

difficult.

Highest oil consuming countries (2010): USA, China, Japan, India, Saudi

Arabia, Germany, Canada, Russia, South Korea and Mexico

Compared to fuels like coal, that have been phasing out, natural gas exploration has

been growing as it is deemed to be the “cleanest” or “greenest” of the fossil fuels. It

may be in the national interest of the countries that have the highest proven gas

reserves to increase natural gas output.

Countries with the highest proven gas reserves: Russia, Iran, Qatar,

Turkmenistan, USA, Saudi Arabia, Venezuela, Nigeria, Algeria and Australia

Highest natural gas consuming countries (2011): USA, Russia, China, Iran,

Japan, Canada, Saudi Arabia, UK, Germany and Italy

Countries that are already producing renewable energy at a large scale can already

utilise “green technology.” They may have high technological and scientific

investments to research and develop renewables.

Highest renewable energy producing countries: China, USA, Brazil, Canada,

Russia, India, Germany, Norway, Japan and Italy

Highest renewable energy consuming countries: Denmark, Iceland, Portugal,

Spain and Germany

It is important to state that all countries have an environmental interest to see a

transition from fossil fuels to predominantly renewable energies.

Questions to Answer

1. Understanding Your Country’s Stance on Energy Security and the Consequent

Environmental Impacts

What is your country’s energy matrix/energy use?

a) How much and of what type of fuel does your country’s industries make up?

b) What percentage does domestic energy use amount to in your country’s overall

energy use?

(i) Does this give you an idea on who your environmental policies should be

aimed at?

Consider the Bloc Positions section (above).

a) Does your country produce/consume a lot of oil and gas?

b) How is your country’s energy demand going to change in the near future?

What is your country’s renewable resource potential?

a) Does your country already use renewable technology? Think about intellectual

rights and patents on green technologies. Does your country have a

responsibility to make these energies available to other countries?

b) Can renewable energies meet global demand?

c) Are renewable resources without any environmental damage? (Think about the

environmental impacts of oil and gas, and compare them with recyclable

energies such as biomass).

2. How Can the UNEP Encourage Oil and Gas Companies to Develop and

Incorporate Green Energies?

What is the oil and gas company’s role in delivering global energy?

a) Do you think it is their responsibility to develop and incorporate green

technologies?

How can governments encourage this sort of behaviour?

a) At a large scale?

b) In a short period of time?

Considering business strategies for green technology, what will the transition to a

“green economy” mean for the global economic market?

a) Can we still maintain a competitive energy market?

Regarding the Challenges and Opportunities highlighted in “Current Situation”

a) How can we monitor the progression of green technologies (adoption and

development) and the success of new policies (CIMA 2010)?

b) Can oil and gas companies make investments into green technologies resilient

to austerity measures? (REN21 2012)

c) Can governments make long term policies despite the “financial short-termism

that exists in businesses, markets and governments” (UNEP 2012).

d) What is the energy gap and can sustainable policy minimize this?

Conclusion

It is clear that the UNEP need a clear and coherent framework whereby oil and

gas companies can make the transition from fossil fuel intensive to green-energy

intensive, utilising renewables such as solar, wind, hydropower, and biofuels as well as

taking initiative in developing new technologies (World Economic and Social Survey

2011). Unconventional oil and gas still dominate the markets, and the highest

consumers of renewable energy only claim 40% of their electricity to come from

sustainable sources (REN21 2012).

Such a change is urgently required because of the recent damming IPCC 5th

Assessment Report (2013), where the continuing rate of fossil fuel usage will lead to

enhanced and irreversible impacts of global warming. It is now certain that if fossil

fuels production were to stop altogether now, man-induced climate change would

still be irreversible, particularly when atmospheric carbon dioxide levels are projected

to continue to grow (EIA 2013).

In light of this, a “business as usual” scenario for the UNEP is out of the

question (Lloyd and Subbarao 2009, UNEP 2012). Since this topic involves oil and gas

companies, it is important to approach this debate with an economic and social

perspective, while fulfilling the committee’s environmental interests.

Suggestions for Further Research

Explore the Renewable Global Status Report (2012), which contains

information on the different types of renewable energies currently available and

being utilised. It also contains information on which countries have certain resource

potentials or are making investments in green technologies.

The UNEP’s Intergovernmental Panel on Climate Change’s recent 5th

Assessment Report is for policy-makers and proves that fossil fuels are in fact

contributing to climate change at an unprecedented level. It may be useful to read its

summary.

Understand what oil and gas companies say about green technologies.

Consider BP’s statement that, “investments in energy are long term in nature. We

believe that if policy-makers provide appropriate frameworks and businesses make

the necessary investments, out industry will be able to provide the diverse and

affordable energy needed by consumers in the future,” (Strategy Presentation 2010).

Many of these transnational corporations have “Meeting Energy Demand” sections,

which provide useful insights into their current and future objectives. For example,

Royal Dutch Shell write, “we are finding innovative ways to help meet rising energy

demand as we open up new energy resources and make the most of existing

resources.” Think about what this means for the exploration of unconventional oil and

gas.

USEFUL TERMINOLOGY: Please look over environmental terminology and use them

correctly. Some terms are highlighted below:

Conventional sources of oil and gas are also called Easy Oil, which were easy to

extract and drill for. Peak Oil and Gas, which is when oil and gas production have met

their maximum rate of extraction and resources will decline thereafter, often refers

to easy oil.

Hard Oil is also called unconventional oil includes excavation of tar sands, oil shale,

lignite and peat. These forms of oil and coal are difficult to extract.

Sustainable energy sources according to the World Commission on Environment and

Development (1987) is “meeting the needs of the present without compromising the

ability of the future generations to meet their needs.”

Renewable energy is energy that produces no carbon dioxide and does not pollute

the atmosphere. In this study guide, green technologies and green energy are used

interchangeably with renewable energy.

Recyclable energy such as biomass and biofuels are carbon neutral, which means

they emit carbon dioxide by reabsorb it after growth

Climate Change vs. Global Warming: climate change refers to a permanent change in

weather systems, which can be macro or micro, and can entail warming or cooling. It is

usually a natural process which often occurs over long-periods of time (millennia to

millions of years). Global warming specifically suggests that the climate will be

getting warmer, and often refers to human-induced climate change due to

Greenhouse Gas (GHG) emissions. Remember that Carbon Dioxide is NOT the only

GHG.

Bibliography

CIMA (Chartered Institute of Management Accountants). (2010). Incorporating ethics

into strategy: developing sustainable business models; Discussion Paper

EIA (Energy Information Administration). (2013). International Energy Outlook 2013

Article, http://www.eia.gov/todayinenergy/detail.cfm?id=12251, Accessed

December 2013.

EITI (Extractive Industries Transparency Initiative). (2013) http://eiti.org/eiti, Accessed

December 2013.

Forbes. (2013).The World’s 25 Biggest Oil Companies,

http://www.forbes.com/pictures/eejk45elhfg/not-just-the-usual-suspects-3/,

Accessed December 2013

Harrison, R. M. (2006). An Introduction to Pollution Science. Royal Society of Chemistry

Publishing

IPCC (Intergovernmental Panel on Climate Change). (2013). IPCC 5th Assessment

Report Summary for Policy Makers, Found at:

http://www.climate2013.org/images/uploads/WGI_AR5_SPM_brochure.pdf

Lloyd, R., and Subbarao, s. (2009). Development challenges under the Clean

Development Mechanism (CDM)—Can renewable energy initiatives be put in

place before peak oil? Energy Policy, 37: 237-245

Matos, S., and Hall, J. (2007). Integrating sustainable development in the supply chain:

The case of life cycle assessment in oil and gas and agricultural biotechnology.

Journal of Operations Management, 25:1083–1102

Ocean Planet (1995) Nasa website

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Accessed December 2013

OECD. (2012a). Incorporating green growth and sustainable development policies into

structural reform agendas, G20 Summit, Found at:

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OECD. (2012b). Green Growth and Developing Countries: A summary for policy

makers, Found at: http://www.oecd.org/dac/50526354.pdf

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Accessed December 2013

REN21 (Renewable Energy Policy Network for the 21st Century). (2012). Renewables

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http://www.bbc.co.uk/news/world-us-canada-11720907, Accessed December

2013

CONFERENCE INFORMATION

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Agenda & Rules of Procedure

The agenda for the 2014 conference is available online at www.limun.org.uk/agenda

Since its 14th session last year, LIMUN has introduced changes to its Rules of

Procedure. The revised Rules can be accessed here: http://limun.org.uk/rules

POSITION PAPERS

What is a position paper?

A position paper is a statement of policy, which is intended to communicate an overall

position of a country on a particular topic debated in the committee. Position papers

should be brief and outline the general policies rather than specific measures.

Each delegate should submit one position paper per topic to be debated by the

committee (note: most of the committees have two proposed topics). Each paper

should be approximately one page per topic.

LIMUN offers a short guide on how to write a position paper. It is available on our

website: http://limun.org.uk/FCKfiles/File/Position_Paper_Guide.pdf

Deadlines

There are two deadlines for submission of delegates’ position papers:

February 11th (Tuesday) – position papers submitted before this deadline will

be reviewed by the Directors and the delegates will receive feedback and will be

given a chance to submit a corrected version of their policy papers (if necessary).

February 14th (Friday) – position papers submitted before this deadline will

still receive feedback from the Directors, but their re-submission will not be

permitted.

Submitted position papers will be circulated by the Directors among the

committee members. Please note: LIMUN 2014 Awards Policy revision has

introduced a Best Position Paper award.

CONTACT DETAILS

For any enquiries relating to your committee proceedings or if you want to get in

touch with your committee’s Directors, or for submission of position papers -

- please e-mail: unep@limun.org.uk

Other enquiries regarding the Conference should be made to enquiries@limun.org.uk

Before contacting LIMUN please make sure you have read FAQ section on our

website: http://limun.org.uk/faq