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January 12, 2005
ConocoPhillips Bows Out of Arctic Power, Green Century Withdraws ANWR Resolution
    by William Baue

The oil company left the group lobbying to open the Arctic National Wildlife Refuge a year ago and neglected to inform resolution filers, who were nonetheless pleased with the development.


Last week, ConocoPhillips (ticker: COP) confirmed that it let lapse its membership in Artic Power, a group that lobbies for the US government to open the Arctic National Wildlife Refuge (ANWR) on the eastern side of Alaska's North Slope to oil drilling. The move prompted socially responsible investment (SRI) firm Green Century Capital Management to withdraw its shareowner resolution calling on the company to report on the environmental and economic impacts of ANWR drilling. An ANWR drilling resolution remains on the proxy at ExxonMobil (XOM), the only major oil company operating on the North Slope to retain its Arctic Power membership, and ChevronTexaco (CVX). BP (BP) dropped out of Artic Power in November 2002, prompting Green Century to withdraw its ANWR drilling resolution there.

"It appears that ConocoPhillips and BP are more enlightened than the Bush Administration when it comes to drilling in the Arctic Refuge," said Athan Manuel, director of the Arctic Wilderness Campaign of the US Public Interest Research Group (USPIRG), which founded Green Century. "Hopefully Congress will get the message and defeat attempts to allow drilling in the Arctic Refuge this year."

However, ConocoPhillips explicitly distanced itself from this interpretation.

"Our leaving Arctic Power was not influenced by the current debate on ANWR, and no one should read into our decision any company position on ANWR," said a company spokesperson in an official statement.

Oddly, ConocoPhillips dropped out of Arctic Power at about the same time as BP, but neglected to inform resolution filers.

"We made the decision about a year ago not to renew the membership," said the spokesperson. "We have not been involved in the ANWR debate in many years and have focused our investment attention in Alaska toward the gas pipeline and development of other North Slope satellite fields."

In May 2004, Green Century and USPIRG along with other resolution co-sponsors sent a letter to James Mulva, company president and CEO, asking him to drop out of Arctic Power to demonstrate an abandonment of ANWR drilling plans. That same month, the resolution received over 9 percent of the vote at the ConocoPhillips annual general meeting.

It is unclear why the company did not cite its lapsed Arctic Power membership in its proxy statement responding to the resolution, nor in response to shareowner letters, as the company spokesperson's statement did not address these questions asked by SocialFunds.com. It was not until early this year that ConocoPhillips Vice President for Health, Safety, and the Environment Bob Ridge informed the resolution filers of its departure from Arctic Power in an email message.

"It may be a case of ConocoPhillips' Houston office and Alaska office not communicating, as we've been dealing primarily with the corporate folks in Houston," Mr. Manuel told SocialFunds.com. "We had raised this issue with them about a year ago, and they never told us they had dropped out--they always led us to believe they were still members of Arctic Power."

While Arctic Power membership was not explicitly addressed in the resolution, the letter from the coalition of filers, which also included Interfaith Center for Corporate Responsibility (ICCR) members, noted that such membership is a key indicator of intent to pursue ANWR drilling.

"With both BP and ConocoPhillips, we offered up this deal of withdrawing the resolution if they dropped out of Arctic Power as a kind of middle ground as a way of acknowledging publicly that drilling in the Arctic Refuge is not an important issue to them," said Mr. Manuel. "You have to look at both BP's and ConocoPhillips's announcements in the context of their larger operations on the North Slope."

"With ConocoPhillips in particular, almost all of their investment is flowing to the western side of Alaska's North Slope, and conversely, they don't have any investment on the eastern side of the North Slope, where the Arctic Refuge is," Mr. Manuel continued. "They are very busy expanding existing oil fields in the Prudo Bay area, but also looking at new areas in the National Petroleum Reserve-Alaska, which have only been recently released to oil and gas companies."

The shareowner letter supported focusing efforts on the NPRA, which Congress set aside exclusively for oil and gas drilling, over the ANWR, which is not only more ecologically important but also less economically viable according to the resolution filers.

 

 
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