06 May 2022

Big Oil's Words vs Actions

Welcome back. As you may have heard, we’ve got a climate problem. To keep the lid on global warming to 1.5°C or even 2°C, net worldwide emissions of carbon dioxide must reach zero no later than 2050.

There is strong international agreement across the climate community that net worldwide emissions of carbon dioxide should reach zero by 2050 to hold global climate warming to 2°C (from www.sustainabilitymatters.net.au/content/sustainability/article/net-zero-carbon-neutral-carbon-negative-what-do-they-mean-exactly--1597925690).

Pray tell, what are the fossil fuel producers going to do? It’s estimated that just four of the energy giants alone--Chevron, Exxon, BP and Shell--are responsible for more than 10% of global carbon emissions since 1965. Clearly, decarbonizing the global economy by mid-century won’t happen with their current fossil fuel-based business models.

On the bright side, several oil and gas majors have increasingly discussed clean energy and climate change, pledged decarbonization strategies and invested in renewables and low-carbon technology. Some claim they are transforming into clean energy companies.

Is Big Oil Coming Clean?
Well, I’m impressed, aren’t you? Oh wait. These are the same companies that, for years, have spread misinformation and aggressively obstructed progress toward climate action. They have spent millions lobbying to delay or weaken climate policy.

So, maybe we should look closer at the extent to which oil majors are truly divesting from fossil fuels and transitioning toward clean energy.

And that’s what researchers with Japan’s Tohoku and Kyoto universities did. They dug into the clean energy claims of the four energy giants, examining 12 years of publicly available data (2009-2020) from three perspectives: discourse, strategies and investments.

Big Oils’ Discourse, Strategies and Investments

Discourse: The frequency of 39 keywords in the companies’ annual reports, categorized as climate change, transition, emissions and clean energy, showed amplified discourse about mitigating emissions and increasing clean energy businesses.

Frequency of 39 keyword mentions in 4 categories in annual reports, normalized by each report’s total word count (from journals.plos.org/plosone/article?id=10.1371/journal.pone.0263596).

Strategies: Indicators of the status of strategies that reflect a transition toward clean energy were categorized as climate-change cognition, business model, emissions reduction and clean energy investment.

For all companies, in most years, the volume of pledges was considerably greater than concrete actions, with scarce acknowledgment of the need to shift away from or reduce dependence on all types of non-sequestered fossil fuels.

Total annual scores for pledges (top) and actions (bottom), 2009-2020, show all companies score considerably higher for pledges than actions (from journals.plos.org/plosone/article?id=10.1371/journal.pone.0263596).
Investments: Analysis of financial data from annual reports indicated that oil and gas exploration and production remain the primary business for all majors and that fossil fuels are still the primary cash engine.

Moreover, third-party data on trends in renewables and clean energy investment showed no evidence to suggest a shift from fossil fuels.

Wrap Up
The researchers found that the two European energy giants, BP and Shell, are a step ahead of the U.S. companies, Chevron and ExxonMobil, but that none of the four is comprehensively transitioning its core business model from fossil fuels to clean energy.

Everything could change, of course. Let's hope so. Thanks for stopping by.

Study of clean energy claims of BP, Chevron, ExxonMobil and Shell in PLOS journal: journals.plos.org/plosone/article?id=10.1371/journal.pone.0263596
Article on study on EurekAlert! website: www.eurekalert.org/news-releases/942905

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