Shell reaps whirlwind of criticism over London Array retreat

The backlash against Shell's decision to sell off its stake in the London Array project to develop the world's largest offshore wind farm gathered pace yesterday with politicians and environmentalists accusing the oil giant of undermining the flagship project.

Environment minister Hilary Benn said the decision was "very disappointing", particularly in the wake of the company announcing this week that it announced record profits of $7.2bn (£3.6bn) for the first quarter of the year.

His comments were echoed by Green MEP Caroline Lucas who labelled the move a "PR disaster" and accused the oil giant of indulging in "media-friendly 'greenspeak' [that] is both dishonest and irresponsible".

Friends of the Earth energy campaigner Nick Rau agreed that the company was guilty of failing to live up to its recent green marketing messages, accusing the firm of touting itself as a "progressive green company" while "leaving a key clean energy project high and dry".

Lucas added that the decision represented a "serious setback" to both the project and UK attempts to meet EU targets for renewable energy.

"I cannot condemn Shell strongly enough for this shameful retreat from the London Array windfarm project," she said. "It appears that as the last key negotiations over equipment contracts took place, the company lost its nerve and decided to shun its responsibilities in the generation of green energy."

Shell's partner on the project, E.ON UK, has warned that the economic case for the project has been made "marginal" by the soaring cost of raw materials and warned that the oil giant's decision to sell would now lead to further delays to the project, although it insisted it remained committed to delivering the wind farm, which is expected to generate enough energy to power a quarter of London's homes.

Speaking to BusinessGreen.com, one wind industry source revealed that the decision had not come as a surprise. "It has been known for some time that Shell was going to re-assess the project when it got all the costs in from subcontractors," he said. "No one is that surprised that it is now exiting the project."

Shell confirmed yesterday that the cost of the project had soared by 45 per cent since work started and that rising costs had been a factor in the " strategic decision" to focus on US wind energy projects that boast stronger economies of scale and find it easier to obtain planning permission.

Rau said that the decision meant the government would now have to deliver more "real support" to offshore wind farm developers if it is serious about meeting its target of delivering 33Gw of energy from offshore wind.

"One measure might be to address the problem of turbine shortages by encouraging manufacturing capacity in the UK," he said.

In related news, ExxonMobil has also faced fresh criticism for its refusal to fully embrace greener business models after descendants of the company's founder, legendary oil tycoon John D Rockefeller, claimed the firm's management was guilty of ignoring shareholders' concerns about its environmental impact.

Speaking at a press conference, economist Neva Rockefeller Goodwin set out four shareholder resolutions calling for the appointment of an independent chairman; the introduction of a taskforce to study global warming; a reduction in Exxon's greenhouse gas emissions; and a clear renewable energy policy.

She also accused the company's management of ignoring both the scale of the threat posed by climate change and shareholder attempts to raise the issue.

"There are an awful lot of people who are getting increasingly annoyed with Exxon," she said, adding that some of the company’s billions "should go towards looking to the future and to the kind of energy this world might need".

ExxonMobil has long been a bete noire of environmentalists who claim it has the most hardline approach to climate change of almost all the oil majors. While BP, Shell and Chevron have all attempted to present themselves as increasingly green organisations – Shell's announcement this week notwithstanding – Exxon has remained firmly focused on fossil fuels, it's main environmental commitment being a relatively modest $100m project into technical solutions to global warming.