What's the real issue?

Though I'm a bit of a lefty myself, I find much of the criticism over Shell's recent settlement to be missing the point. $15.5 million is peanuts, true, and the firm claims to spend some $280 a year in social/development projects, yet there has been little progress in cleaning up the devastated Niger Delta.

But Shell is a business after all, and a business we need if we want to have all our electric appliances plugged in at home and keep driving our cars to buy simple food items most Americans can no longer get within walking distance of their homes.

That being said, there is in my view quite a strong business case for the firm to do more. Stop blaming thieves for oil leaks, and fix the damage from the leaks from 15 years ago before theft was such a problem. If there had been real engagement with development in the local area at that time, locals wouldn't have as much incentive to steal today. Not to mention that even if the wildly corrupt Nigerian government doesn't enforce the ban on gas flaring, you have no excuse not to stop this toxic and wasteful practice.

Things are only getting worse, and it seems we have a real insurgency on our hands that threatens to spill over into the Gulf of Guinea. Nigerian waters are now the second most dangerous after Somalia, according to the International Crisis Group.

The main militant group in the region, MEND, has managed at various times to shut down half of Shell's oil production in Nigeria alone. It has reduced the country's annual output by 25%, costing billions to both oil companies and the government since 2006. In that time, oil workers have had to live in high-security compounds with panic rooms due to hundreds of kidnappings. Oil is stolen from pipelines and infrastructure, even out at sea, is attacked. Crew are targeted as they travel to installations, requiring heavy security for all crew members for the duration of their stay in the region.

$15.5 million and legal fees may not be much to Shell, but I would think that billions in lost revenue, the inability to expand production, the cost of constantly repairing damaged infrastructure and the constant security presence simply to protect workers must also run pretty dang high.

So why the refusal to engage meaningfully with local communities?
Has anyone ever done a thorough cost-benefit analysis? I don't know who protects their personnel, but I know private military contractors ain't cheap either.

Human security initiatives have worked elsewhere, even in the case of apathetic and corrupt governments that rely on commodities to keep them comfy (Azerbaijan).

Indeed, this is closely related to counterinsurgency. The BTC pipeline runs across 3 countries with separatist groups, but has seen very few attacks. In some cases, local communities are now interacting much better with government officials thanks to facilitation from development projects necessary to the stability and sustainability of the communities surrounding the project area.

Not to say there haven't been problems there. And in any case, oil installations will cause destruction of some kind where ever they are built, just as all development does, not matter how 'green'.

Long story short, we need to be calling on oil companies to be more responsible because its good for all of us, including them. More pirates are bad, and they collude with organized crime, some of which finances terrorism. One reason Al Qaeda advocates attacks on energy infrastructure is simply to hurt the West through the high cost of security measures on these facilities.