the royal dutch/shell group is a major contributor to the release of greenhouse gases, and has been among the leading oil companies to publicly embrace the need for sustainable development, including the need to address climate change. It is by most measures the world's second largest oil company, with over 100,000 employees, operations in over 130 countries, 2006 production of nearly 3.5 million barrels of oil equivalent per day, and proven reserves of nearly 8.5 billion barrels of oil equivalent. Shell's 2006 income was $26.3 billion on revenue of $318 billion.
Shell Transport began in 1833 with a British shopkeeper importing oriental shells, leading to an export/ import business importing oil. Royal Dutch Petroleum Company began producing petroleum in the Dutch East Indies. A partnership was formed in 1907, expanded rapidly, and was the main fuel supplier to the British in World War I, and the world's leading oil company by 1930. During this period, it also began developing its global network of service stations. Demand for petroleum exploded after World War II. During the 1960s, Shell strengthened its presence in the Middle East, and discovered reserves in the North Sea. The 1973 oil crisis led Shell to diversify into other energy sources such as coal and nuclear power, with little economic success. Shell also acquired 50 percent of an Australian solar energy company, and began producing renewable softwoods that could be used for paper, construction, and fuel. Shell is the world's leading biofuels distributor.
After oil prices collapsed in 1986, Shell invested in research and development that led to huge improvements in drilling techniques, and began some of its most challenging offshore exploration. During the 1990s, high oil prices allowed Shell to further develop biomass technologies. Since 2000, Shell's greatest expansion has been in China. In 2005, the old partnership was dissolved, and one company was created, Royal Dutch Shell.
The company experienced two major public image setbacks in 1995 related to sustainable development. After the British government approved Shell's plans to decommission the Brent Spar oil storage platform by sinking it in the North Sea, Greenpeace claimed this would create large amounts of pollution. Shell argued this would create the least environmental damage. Greenpeace activists protested, boarding the rig as it was being towed to the disposal area. Widespread media coverage followed, and resulted in huge negative publicity for Shell, spawning boycotts and even a firebombing of a Shell station. Shell eventually reversed its decision and towed the rig to port in Norway for dismantling. Dismantling revealed that claims of a negligible amount of oil in the rig were accurate, and Greenpeace later issued an apology.
That fall, Shell experienced another public relations fiasco. A wholly-owned subsidiary, Shell Nigeria, is the major international oil-producing company in Nigeria, with joint ventures with the Nigerian state-owned oil company and other multinational oil companies. Significant revenues from oil production go to the central government, with little benefit accruing to people in oil producing regions. Author Ken Saro-Wiwa, a member of the Ogoni tribe from the Niger Delta, led protests against the government for not using oil revenues to benefit the Ogoni, many Ogoni leaders for complicity with the central government, and Shell for substantial pollution from exploration and pipeline spills and gas flaring and for seeking security assistance from Nigerian military forces. Violence broke out, in which several Ogoni chiefs were killed, and Saro-Wiwa and eight of his associates were arrested, tried, and found guilty of murder.
International human rights activists regarded the charges as groundless, and the trial as unfair. Activists called on the Nigerian government to commute the sentences, and on Shell to use its influence to this end. Shell's CEO and the Shell Nigeria managing director appealed for clemency on humanitarian grounds, but Saro-Wiwa and his associates were executed 10 days after the verdict. Shell was heavily criticized for not doing more to attempt to influence the government to free Saro-Wiwa.
These events prompted Shell to expand its attention to sustainable development. The company has a Social Responsibility Committee that directs its sustainable development policies and performance, and it annually produces an extensive sustainability report stating that sustainable development is part of the duties of every manager at Shell. Every one of Shell's businesses is responsible for complying with corporate sustainable development policies and achieving unit-specific targets in this area.
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