Shanghai, through a 4000-kilometer underground pipeline. Because the pipe-
line moved gas from China’s energy-rich but economically underdeveloped
western provinces to energy-poor but economically developed eastern
provinces, it has been controversial from the outset. The pipeline route crosses
a wide variety of geographic areas, including deserts, mountains, and heavily
farmed areas, presenting technical challenges. The pipeline route also inter-
sected nature reserves and areas of cultural heritage value, including the Great
Wall, which raised biodiversity issues.^46
Shell has been a dominant player in the manufacture of liquefied natural gas
(LNG); it has plants and terminals throughout the Asian Pacific region. Shell’s
experience in gas production and marketing, as well as the history of its
operations in China, recommended the firm to PetroChina in this first-ever
invitation of foreign firms to participate in an infrastructure development
project. Shell was the lead or preferred partner, heading an international
consortium including ExxonMobil and Gazprom. Throughout, Shell’s
approach was to conceptualize the project in the context of the corporation’s
global image:
‘The key area was Shell’s reputation. We focused on health, safety, environment and
social standards. We talked about what standards would be adopted and
implemented. We knew that we had to demonstrate consistency globally... We said
we would follow Chinese standards and laws, but that we had our own global
standards, and that we needed to be consistent. We would follow Chinese standards,
but they could be improved.’^47Although foreign investors ultimately were not involved in the pipeline
construction, Shell played an influential role. In its 18-month involvement,
and while spending about US$15 million in preparatory expenses, it influ-
enced both routing and pipeline construction decisions. Initially, PetroChina
planned to cross the Great Wall in 12 places. Instead, Shell proposed to use
directional drilling under the Great Wall and ‘to do micro-routing – to go
through gaps in the wall and not follow straight lines’. PetroChina first thought
the pipeline would cross four nature reserves, but discovered it intersected two
additional reserves, just in the process of approval. One of these reserves was
Lop Nur, a former nuclear testing site in China’s West, which is the habitat for
a herd of 300 endangered wild camels. Shell convinced PetroChina to alter the
routing to avoid the areas of camel habitat.
Altogether, some 350000 people living along the pipeline route had to be
resettled, which involved Shell’s environmental consultant, Environmental
Resource Management, in detailed consultation with more than 10000
residents. Although PetroChina had attained all necessary government
approvals and wanted to begin construction soon after signing its initial joint
venture agreement with Shell, the foreign corporation urged delay:
Business organizations and biodiversity conservation 147