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Feb 08,
2023
By Irina
Slav
Climate Crisis Tide Turns For Big Oil
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Constant accusations of knowing the effects of their products on the
environment and lawsuits have become constant companions of oil
companies in the last few years. The successes that activists have
had—such as Friends of the Earth’s court win that obliged Shell to cut
its emissions by 45 percent—have been celebrated loudly and globally.
Naturally, Big Oil tends to be the target of choice because of its
size, but with governments in Europe and much of North America
pledging their total support for an energy transition, the whole
industry has become a target. And has been quiet about it all,
probably on the assumption that trying to defend itself would make
things worse. Until recently.
Perhaps the first highly public retaliatory shot came in 2021 when the
chief executive of Liberty Energy made a YouTube video attacking North
Face for its refusal to sell branded apparel to an oil company because
of what it did. In the video, Chris Wright accused North Face of
hypocrisy, noting the fact that the synthetic fibers they used in
their products were a product of the oil industry.
The video made quite a splash at
the time, with North Face’s defense coming down to an admission that
associating with an oil company would make it look bad and a promise
to make all its products recyclable by 2030.
Related: Has Saudi Arabia’s Relationship With Russia Reached Its
Limits?
But Wright didn’t stop there. Just this month, the chief executive of
Liberty posted a video on LinkedIn challenging the climate crisis
narrative. LinkedIn took the video down. Wright challenged the
decision. LinkedIn first said the video violated its misinformation
policies but a day later restored it. And the Wall Street Journal wrote a
long article about it.
In his disputing the alleged scientific
consensus on climate change, Wright is still an exception. Yet
Liberty’s bigger sector players are challenging the energy transition
in other ways. They may well have had enough of bearing the attacks
silently and making emission-reduction pledges in hopes that everyone
starts liking them better.
Last year, for instance, the chief executive of Chevron, Mike Wirth,
countered accusations by the Biden administration that the oil
industry was raking in inordinate profits, saying that from a
longer-term perspective, these were in fact modest returns on
investments that oil companies made.
Industry insiders have noted, only half-jokingly, that if the federal
government wants to tax the excess profits of Big Oil, then it should
have provided financial support to the industry when it struggled
during the worst of the Covid crisis. Or that it should have also
taxed Big Tech, which made billions during the two pandemic years.
Exxon went further, attacking the windfall tax the European Union
recommended to all its members in court. The supermajor said that
the windfall tax was counter-productive, it discouraged investments,
and the European Union had exceeded its legal authority in imposing
the tax on oil companies. It noted the $3 billion it had invested in
refineries in Europe in the past 10 years, ensuring the security of
fuel supply for the continent, suggesting that such investments would
not be forthcoming in a windfall tax environment.
The U.S. company wasn’t the only one. French TotalEnergies was quick
to take legal action against none other than one of the icons of the
environmental movement: Greenpeace. After the organization issued a
report claiming that TotalEnergies was underreporting its emissions,
the supermajor acted swiftly
and slammed Greenpeace for spreading misinformation, filing a lawsuit
against the organization.
“The Greenpeace report follows a methodology that is dubious, to say
the least,” TotalEnergies said at the time, adding that “the
dissemination by Greenpeace of misleading information in this matter
is serious.”
The latest surprise was quite a blow because it came from one of the
companies most active in transforming themselves from an oil major to
a transition leader. At least that was the plan three years ago when
BP’s new chief executive Bernard Looney took the helm.
Now, after a devastating 2020, a much better 2021, and a stellar 2022,
Looney appears to have reconsidered some of BP’s goals. This time last
year, BP said it
planned to cut oil and gas production by 40 percent from 2019 levels
by 2030. This week, the supermajor said the
2030 production cut target would be 25 percent from 2019 levels by
2030.
What’s more, the Wall Street Journal, citing unnamed
sources, reported a week ago that BP’s chief executive had been
unhappy with the returns that many BP renewable energy projects were
making. As a result, the report said, he planned to dial back the
company’s transformation from Big Oil major to Big Energy major.
It could be that record profits have emboldened the oil industry,
especially in the context of disappointing performance from renewable
energy majors such as Orsted and Siemens Gamesa. Or it could be that
the oil industry has had enough and has decided to stop rolling with
the punches and instead serve some back.
By Irina Slav for Oilprice.com
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
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