Giant Outsmarted: How Greenpeace Sank Shell's Plan to Dump Big Oil Rig in Atlantic --- Environmentalists Used TV To Win the PR Battles While the Firm Bumbled --- Science Loses to Joe Six-Pack
By Wall Street Journal Staff Reporters Bhushan Bahree and Kyle Pope in London And Allanna Sullivan in New York

The Wall Street Journal
(Copyright (c) 1995, Dow Jones & Co., Inc.)

For Greenpeace, the events of mid-June could hardly have been scripted better.

The environmentalist group had been campaigning for weeks to block Royal Dutch/Shell Group from disposing of the towering Brent Spar oil-storage rig by sinking it deep in the Atlantic Ocean. As a small helicopter sought to land Greenpeace protesters on the rig's deck, Shell blasted high-powered water cannons to fend off the aircraft -- all captured on film and beamed around the world.

Shell had made a strategic error. In a world of sound bites, this was even better, an image bite, and one image was left with many viewers: A huge multinational oil company was mustering all its might to bully what was portrayed as a brave but determined band. "They were very dramatic images," recalls William Randol, a Lehman Brothers analyst in New York.

Four days later in The Hague, Royal Dutch/Shell executives made a humiliating and painful U-turn. After repeatedly refusing to budge, the company said it would do what Greenpeace wanted: It would dispose of the Brent Spar on land.

Like the Exxon Valdez and Love Canal, the Brent Spar has, fairly or not, achieved instant celebrity in the annals of environmentalism. As such, it will long be scrutinized, by activists and corporations alike, as an instructive case study.

For Greenpeace, the Brent Spar shows that high-profile cases, properly framed and easily explained, can ignite widespread public interest, especially if the news media get plenty of good photo opportunities. It also shows that economic warfare may be the best way to wage eco-warfare. The attention-grabbing tactics helped spark a boycott against Shell that cut sharply into gasoline sales and pushed the company to reverse course.

"With the environmental movement, there's a sleeping giant that can be awakened very, very easily and very, very quickly," says Paul Horsman, the Greenpeace leader of the Brent Spar campaign.

For corporations, Brent Spar shows that warning signs can be ignored only at great risk. "There's no question that Shell was caught by surprise," says Lawrence Goldstein, president of the Petroleum Industry Research Foundation in New York. While Shell argues that Greenpeace manipulated the media with misinformation that oversimplified the matter, the company compounded its problems by stonewalling -- and thus seeming intransigent.

"You could argue in retrospect that we should have been more upfront and explained what we were doing," concedes Christopher Fay, chairman of the Shell U.K. unit directly responsible for the Brent Spar.

Moreover, Greenpeace managed to capitalize on its small size. It was nimble, crossing borders with an ease that stunned Shell, a company with many semiautonomous units operating world-wide but whose seemingly uncoordinated responses were like an elephant learning to dance. This corporate confusion, combined with arrogance, proved fatal. "The company's big mistake was in not coordinating its approach to the Brent Spar issue and letting its own differences be aired so publicly," Lehman's Mr. Randol says.

Nonetheless, the black-and-white outcome of the confrontation -- with Shell widely portrayed as the villain and Greenpeace the hero -- is ironic to many, given the shades of gray in the situation.

Greenpeace, for example, has largely escaped criticism even though its sometimes-inflammatory rhetoric may have encouraged the violence against Shell. A service station in Hamburg was firebombed, and another Shell station manager narrowly escaped injury from a letter bomb. Although the violence was disavowed by Greenpeace -- at Shell's request, Mr. Fay says -- the image of environmentalists endangering people troubled some observers. Philip Morgan, an oil analyst at Paribas Capital Markets in London and a former Greenpeace member, contends, "Even one firebombing of a gas station was probably more polluting than if the Brent Spar had been sunk. . . . What they [Greenpeace] did was shameful."

In addition, some scientists, and even environmentalists, agree with Shell that scuttling the rig, which had been rendered obsolete by an underwater pipeline, would have been environmentally safe. "Deep-sea disposal seemed the least harmful option," says Robert Sangeorge, a spokesman for the Switzerland-based Worldwide Fund for Nature. The Brent Spar drama, he adds, "was a circus and sideshow that distracted from the big environmental issues affecting the world."

For all the publicity about the Brent Spar, there was little indication it would become a cause celebre when Shell began considering removing it several years ago. Many oil rigs have been scuttled, often with environmentalist backing; they create artificial reefs where fish congregate.

But the Brent Spar was different. Installed in the 1970s, the 14,500-ton rig is more like a floating oil tank, built to hold 300,000 barrels of oil produced in nearby fields. Although it contained 100 tons of oil-related sludge, the company concluded that that wasn't a problem: The rig, once sunk, would create a plume of pollution -- but so deep that it wouldn't affect much marine life.

The plan was sketched out to the British government last year and got initial government approval Feb. 16. But, in a critical mistake, Shell and the government acted with little public consultation.

Alerted to the plans, Greenpeace last summer commissioned a report to consider the scientific arguments for a deep-sea dumping. The study argued that decommissioning rigs on land wasn't as difficult as Shell claimed and that the damage to marine life would be much greater. Moreover, the study turned up an interesting tidbit: Dumping the Brent Spar at sea would cost Shell only about #10 million, vs. at least #46 million to dismantle it onshore. Greenpeace later used this fact to undercut Shell's argument that its decision was based on science.

But Greenpeace contends that its case was ignored by the U.K. government and Shell. "For them, it became an issue of not wanting to give in to the pressure groups," Mr. Horsman says.

By March, Greenpeace had devised a high-profile plan of boarding the Brent Spar, and it was approved April 11. Knowing that they would win only with strong public support, planners made a clever -- some might say cynical -- decision to acquire satellite communications and video equipment to enable their people to transmit televised pictures of the Brent Spar.

Oblivious to Greenpeace, Shell continued making plans to begin towing the rig in June, at one mile an hour, toward its dump site 150 miles west of Scotland. The site was chosen because the Atlantic there can plunge as deep as 1 1/2 miles.

On April 30, Greenpeace struck, landing activists on the rig. They stayed there for three weeks, filmed by a crush of journalists crammed into a Greenpeace supply boat. On May 23, the group on the rig -- then 14 activists and nine journalists -- was expelled by Shell, but Greenpeace had won the opening battle of the public-relations war.

The stunt got little media attention in Britain. But in environmentally conscious Germany, footage of the soaked activists on the windswept platform sparked an uproar. On May 22, Greenpeace received a letter from a German group expressing "concern and outrage" at Shell's plans to "turn the sea into a trash pit."

The outraged letter-writers? None other than the worker representatives on Shell's supervisory board in Germany. Shell's inability to win the PR battle with its own employees was an embarrassing portent.

Shell U.K. still refused to meet with Greenpeace. But in an indication of a widening rift within Shell, its German executives broke down and met with the activists June 1 in Hamburg. Jochen Lorfelder of Greenpeace came armed with an independent survey showing that 85% of Germany's motorists would support a boycott. He recalls telling Shell that "in the four weeks it would take to tow the Brent Spar to its dumping site, Greenpeace would make life a nightmare for Shell."

Peter Duncan, a New Zealander who is chairman of the German subsidiary, explained that dumping was the best option scientifically. Mr. Lorfelder shot back, "But Joe Six-Pack won't understand your technical details. All he knows is that if he dumps his car into a lake, he gets fined. So he can't understand how Shell can do this." The activist had grasped what Shell, with its legions of PR men, hadn't: Keep it simple, stupid.

Despite the growing furor, Shell on June 11 cut the anchor chains holding the Brent Spar in place and began towing it -- and helped Greenpeace. "My biggest fear was that Shell . . . could have temporarily suspended the project," confesses Thilo Bohde, manager of Greenpeace Germany. Not only would Shell have looked more reasonable; it might have starved the activists of publicity while the media moved onto other stories.

By now, the tide was clearly turning against Shell. An earlier, informal boycott of Shell by German motorists began to spread the week of June 12. "For us, it was the only way to put pressure on a company," says Ben Dieckmann, a 28-year-old architect in Aachen. Politicians, trade unions and the Protestant church expressed support for the boycotts, which also spread to Denmark and the Netherlands.

On June 15, Greenpeace's Mr. Bohde returned to Shell's offices in Hamburg and told Mr. Duncan that Greenpeace would stop its action if Shell temporarily suspended its plan. The next day, Shell Germany said the project would be halted. Not so, responded Shell U.K.

It was more bumbling.

Shell suffered another setback on Friday, June 16, when German Chancellor Helmut Kohl asked British Prime Minister John Major to rescind the U.K. government's approval for sinking the rig. At Shell U.K., this request was viewed as an attempt to pander to voters. "The Greens, if you wish, as far as the [ruling] coalition was concerned, were eating into their majority," Shell's Mr. Fay says. In any case, it brought even more coverage to the Brent Spar -- on Greenpeace's terms.

While Shell could do little right, in the public's eyes at least, Greenpeace scored another coup that same Friday. Until then, Shell's water cannons had kept the Greenpeace helicopters away from the Brent Spar. But Greenpeace finally landed two activists on the rig anyway, by flying in early in the morning before the cannons were turned on. David scored more PR points over Goliath.

That weekend, Shell officials met with European leaders and ask them to stop backing the boycott -- to no avail. Having lost the public-opinion battle, Shell couldn't win political support.

On Tuesday morning, June 20, Shell Group's managing directors met in The Hague. Mr. Fay of Shell U.K. found his European colleagues complaining that their sales were slumping too badly to continue supporting the sinking. The most passionate argument came from Mr. Duncan, who said Shell's German sales were off 20% to 30%.

Around 5:45 p.m., Shell U.K. announced its decision to drop the ocean-dumping plan. Prime Minister Major was livid. Even as Shell officials were meeting, he had argued in Parliament that dismantling the rig on land was "an incredible proposition." Mr. Major later told a colleague that Shell officials were "wimps."

The Brent Spar battle has left Greenpeace basking in success and still refusing to concede any major points to its academic and environmentalist critics. Shell, aware of its mistakes, has ordered executives to put together a reconstruction of the debacle. Detailed records kept by Mr. Fay in a lined and now well-thumbed ledger may prove especially useful.

Mr. Duncan has already conceded that Shell Germany should have provided information on the Brent Spar and the disposal plan a year ago and that the company's decentralization worked against it.

But Shell's embittered spokesmen still try to dispel the idea that they could have prevented the calamity. Shell's message, they lament, was more complex than Greenpeace's. "We had to explain the pros and cons of both solutions in papers this long," says Rainer Winzenried, a spokesman, spreading his arms. "They had a simple, single-issue message -- a poison bomb, the North Sea, and a precedence for 400 other platforms."

As for the Brent Spar, Shell has asked the Norwegian government for approval to tow it to a deep fjord where it could be partly dismantled without damaging the environment, before being taken ashore for the final dismantling.

While Shell awaits an answer, the rig is being towed aimlessly, some 100 miles off the Shetlands, bobbing on the waves.


Cacilie Rohwedder in Hamburg contributed to this article.

(See related letter: "Letters to the Editor: Demagogues Dominate An Ignorant Public" -- WSJ Aug. 10, 1995)


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