The efforts by concerned citizens to encourage action by industry and government to address the warming of the planet caused by emissions of greenhouse gases may recently have affected the plans of Big Oil.
The Economist reports that ExxonMobil loses a proxy fight with green investors and Shell has been ordered by a Netherlands court to reduce emissions between 2019 and 2030 by 45%.
ExxonMobil’s proxy defeat is the latest sign that outside pressure for the oil business to embrace the transition to a low-carbon future is mounting. On May 18th the International Energy Agency (iea), an international forecaster not known for alarmism, warned that investments in all new fossil-fuel projects must stop now if the global energy sector is to achieve carbon neutrality by 2050. President Joe Biden wants America’s power sector to stop adding greenhouse gases to the atmosphere 15 years earlier than that. So far it has been Europe’s oil giants that were pushed harder to go greener—by activists, consumers, regulators, investors and courts. Last year bp vowed to slash the carbon intensity of the products it sells by 50% in the next 30 years. This month Shell won shareholder approval for its plan to create a carbon-neutral business by mid-century, including emissions from the fuel burned by end-users. Though ambitious by industry standards, this was not enough for a judge in the Netherlands, who on May 26th ordered the Anglo-Dutch giant to cut emissions between 2019 and 2030 by 45%, in keeping with global climate accords; Shell is expected to appeal.1Fred Pearce in an article published at the Yale School of the Environment, asks if Net Zero emission plans are a winning strategy or are they destined for failure? Some scientists are arguing that Net-zero emissions plans — balancing emissions by absorbing equivalent amounts of CO2 from the atmosphere, the defining approach of international climate efforts, simply allows the perpetuation of the status quo and is certain to fail.
Robert Watson, a former chair of the Intergovernmental Panel on Climate Change (IPCC) from 1997 until 2002, has worked as an academic, currently at the University of East Anglia. He and his co-authors wrote last month that while net zero might be “a great idea, in principle,” in practice it “helps perpetuate a belief in technological salvation and diminishes the sense of urgency surrounding the need to curb emissions now.” Scientists who support the current push for net-zero, they contend, have “licensed a recklessly cavalier ‘burn now, pay later’ approach, which has seen carbon emissions continue to soar.”... “We admit that it deceived us,” he and fellow climate scientists James Dyke of Exeter University and Wolfgang Knorr of Lund University in Sweden wrote. But “the time has come to voice our fears and be honest with wider society… Current net zero policies will not keep warming to within 1.5 degrees, because they were never intended to. They were and still are driven by a need to protect business as usual.”2Chris Hatch writes in the National Observer about the “Crushing defeats” for Big Oil in the last days of May 2021.
The Wall Street Journal described Wednesday’s events as “crushing defeats,” under the headline “Oil Giants are Dealt Major Defeats on Climate Change as Pressures Intensify.” Ironically, it was exactly two years ago this week that Alberta Premier Jason Kenney dismissed investor concerns about climate change as a “flavour of the month.” It was a very bad day following a tough run for Big Oil. Those shareholder fights at Exxon and Chevron were just the ones on Wednesday. Earlier this month, majorities of both ConocoPhillips and Phillips 66 shareholders voted against management and supported carbon-cutting resolutions. Last week, the International Energy Agency said investment had to end in new oil, gas or coal if the world is going to tackle climate breakdown. Last year Exxon was booted off the Dow Jones Industrial Average after nearly a century. The ruling against Shell and the shareholder insurrections highlight two nerdy ideas that we’ll all have to get our heads around in an era where clashes over climate change are echoing even down Wall Street.3The strategy of the Oil Majors has been business as usual as some efforts are made to capture carbon and attempt to achieve Net-Zero with “green offsets”. We need to pay attention to scientists and engineers to assure the numbers for holding earth warming to 1.5 C are achieved.
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