Last week, when the Obama administration gave tentative approval to Shell Oil’s plan to return to the Arctic after its disastrous attempt to find oil there in 2012, I found myself thinking of a conversation I had several years ago with a man named Jeremy Bentham. A theater-loving Englishman, Bentham leads Shell’s legendary team of futurists, whose methods have been adopted by the Walt Disney Company and the Pentagon, among others.
The scenario planners, as they call themselves, are paid to think unconventional thoughts. They read fiction. They run models. They talk to hippies. They talk to scientists. They consult anyone who can imagine surprising, abrupt change. The competing versions of the future — the scenarios — that result from this process are packaged as stories and given evocative titles: “Belle Époque,” “Devolution,” “Prism.” Then the oil company readies itself, as best it can, for all of them.
Over the course of almost half a century, Bentham’s predecessors in the scenario-planning group helped Shell foresee and prepare for events like the fall of the Soviet Union, the rise of Islamic extremism and the birth of the anti-globalization movement. More recently — before California’s historic drought — the team focused on water scarcity. And long before most other oil companies, Shell’s scenario planners helped the company understand that climate change was a strategic and scientific reality.
In early 2008, weeks before Shell bid a record-breaking $2.1 billion on oil leases in the melting Arctic Ocean — the basis for the newly approved drilling plan — the company’s futurists released a new pair of scenarios describing the next 40 years on Earth. They were based on what Bentham called “three hard truths”: That energy demand, thanks in part to booming China and India, would only rise; that supply would struggle to keep up; and that climate change was dangerously real. Shell’s internal research showed that alternative energy systems — wind, solar, carbon capture — would take decades to make just a 1-percent dent in our massive global energy system, even if they grew at 25 percent a year. “It takes them 30 years to just begin to start becoming material,” Bentham explained to me.
One scenario, called “Blueprints,” painted a moderately hopeful vision of green energy and concerted action within the constraints of technological change, of a swiftly rising price on carbon emissions as the world comes together to remake its energy systems. In this vision of the future, there is active carbon trading. There is a strong global climate treaty. There is still far more warming than society can easily bear — approaching 7 degrees Fahrenheit — but the world still averts the very worst of climate change.
The second scenario, called “Scramble,” envisioned a future in which countries fail to do much of anything to reduce emissions, and instead race to secure oil and coal deposits. Only when climatic chaos breaks out does society take it seriously, and by then great damage has already been done. Drilling in the Arctic, thought to hold up to a quarter of the world’s untapped oil and gas, has a role in both scenarios — but under “Scramble,” it is irresistible.
In 2008, Shell surprised observers by announcing that it had a preferred scenario. The company would prepare for both outcomes, but for the good of the world and the good of Shell itself, it hoped for the carbon-constrained future of “Blueprints.” The oil giant awaited government action: a market signal in the form of a carbon price. But when I interviewed him four years later, Bentham admitted to me that the future, so far, was looking a lot more like the chaos of “Scramble.” We had no working international climate agreement and no real price on carbon. Instead, we had a global race for gas, coal and the last drops of conventional oil.
When I talked to Bentham, it was early December 2012. Three weeks later, on New Year’s Eve, Shell’s Arctic drill rig, the Kulluk, crashed into an island off the Alaskan coastline in a violent winter storm — a disaster I wrote about in The New York Times Magazine. After the accident, political and economic circumstances seemed to turn decisively against Shell’s Arctic aspirations. The Obama administration began talking tough: “Shell screwed up,” said Ken Salazar, the interior secretary at the time. ConocoPhillips and Statoil, Shell’s rivals in the Alaskan Arctic, delayed their own offshore-drilling plans. Global oil prices soon dropped precipitously, making expensive plays in the high north even riskier.
Yet the drilling plan that the Obama administration approved on May 11 is not much different from the one that ran aground along with the Kulluk two and a half years ago. One of company’s drill ships will be the same as before: the Noble Discoverer, a 49-year-old converted log carrier that was previously at the center of eight felony pollution charges. Last month, the vessel failed another Coast Guard inspection in Hawaii. In place of the Kulluk, Shell will use a squarish, 319-foot-tall behemoth called the Polar Pioneer. This replacement rig flies the same Marshall Islands flag of convenience as the Kulluk and will be towed along the same general route to and from the Chukchi Sea from Seattle — a 2,000-mile voyage by tugboat. The Discoverer and the Pioneer will cross the same churning waters in the Gulf of Alaska. They’ll begin drilling in the same assuredly oil-rich patch of seabed in the Chukchi, some 70 miles from shore and a thousand miles from the nearest permanent Coast Guard base from which help could be dispatched if something goes wrong.
The fact that so fundamentally little has changed since the debacle of 2012 is shocking — unless you understand that our leaders have long shared the oil company’s worldview. Drilling the Chukchi is not a choice, say the adults in the room; it’s an inevitability. When the federal government auctioned off the Chukchi leases in 2008, Randall Luthi, a Bush appointee who was then the head of the agency then called the Minerals Management Service, gave a speech in Alaska in which he stumbled repeatedly over the word Inupiat — the name of the Alaska Native people whose villages dot the Chukchi coastline — but managed to present this argument perfectly.
“Our demand for energy is going to increase by approximately 1.1 percent a year over the next generation,” he declared. “U.S. production is not expected to keep pace. Now, it doesn’t take too much to realize that when you’re demanding more than you’re producing, there’s a shortfall.” One of Luthi’s successors under the Obama administration, Tommy Beaudreau, underscored the “tremendous” size of the prize. Estimates held that “the Chukchi Sea contains more than 15 billion barrels of undiscovered recoverable oil,” Beaudreau told the Senate, “which is second only to the central Gulf of Mexico.”
For me, living in Seattle as Shell’s Arctic fleet again gathers in Puget Sound and activists in kayaks try to stop it with a blockade, it’s hard not to think of the arc of the president who just signed off on another drilling mission. In his 2008 campaign, President Obama seemed to plan for an optimistic vision of the future, only to have the opposing scenario unfold. Four years later, his campaign’s energy slogan — reiterated in his 2014 State of the Union address — might as well have been written by Shell: All of the above.
Lately, Obama has made climate change a priority. He has signed off on an ambitious climate pact with China, and his administration is finalizing regulations for coal-fired power plants. So far, he has blocked the construction of the Keystone XL pipeline. That he is simultaneously opening up the Arctic Ocean only shows the staying power of Shell’s three hard truths. In this worldview, where society stays stuck on oil because history shows that we must, there is one kind of abrupt change that remains unimaginable.
First published in The New York Times Magazine.
Photo by Aaron Brethorst.