Comment: The problem with Shell’s climate pragmatism
The oil industry should become more assertive when it comes to climate change.
That was the headline grabbing call to arms from Shell CEO Ben Van Beurden in a speech to the International Petroleum Week dinner.
His comments echo those from industry peer BP at its 2014 AGM where it discussed the need for oil companies to “educate policy makers about the facts” of climate change.
Indeed only yesterday former BP chief Lord Browne called on oil companies to play a more proactive role in the climate debate.
And there is no doubt the intention of the widely leaked speech was to position Shell as a leader and a credible industry voice on climate change.
But for those concerned about relentless regulatory capture, Van Beurden’s claim that oil companies have been too reticent and low-profile about climate policy is a misleading portrait of an industry that spends millions of dollars supporting opposition to climate science and climate legislation.
Indeed both UK oil majors are members of the controversial US policy group the American Legislative Exchange Council (ALEC) much criticised for its anti-climate positions.
Last year both companies refused shareholder and civil society requests to follow FTSE 100 peers Unilever and GSK and withdraw from ALEC.
Google pulled its support last year with executive chairman Eric Schmidt saying of ALEC “they are just literally lying” about climate change. Facebook and Yelp soon followed suit.
Fossil fuel split
According to news reports, Shell’s contribution is “small” and it “generally agrees” with the views of ALEC as they relate to the oil and gas industry.
Shell may want to consider how ALEC’s coal industry supporting attempts to counter EPA emissions regulations fit with Van Beurden’s view that the focus “should be on reducing emissions by switching from coal to natural gas”.
Importantly, Van Beurden’s speech represents a public split within the fossil fuel industry with oil and gas majors now eager to distinguish themselves, as the acceptable face of the fossil fuel industry.
This split suggests an acknowledgement that not all fossil fuels will be used – that there is unburnable carbon – and the beginnings of a battle within the fossil fuel industry as to who will lose out. Coal is the target.
Energy access and fossil fuels
Van Beurden’s comments are also notable for their attempt to reclaim the moral ground from divestment campaigners saying “The issue is how to balance one moral obligation, energy access for all, against the other: fighting climate change.”
It’s a nice turn of phrase. It conflates energy with fossil fuels and it dodges the problem – the oil industry can’t expand and fight climate change at the same time.
Van Beurden’s speech came just a week after he confirmed Shell’s intention to recommence this summer its hitherto ill-fated US offshore Arctic drilling programme.
If Shell really wants to take the lead on climate change, then cancelling this project would represent a great starting point.
Independent research finds that economically viable offshore US Arctic oil exploration is incompatible with restricting global temperature increases to the agreed maximum of 2 degrees.
Shell’s CEO wants oil companies to “offer some realism and practicality to the [climate change] debate”.
It is difficult to see how chasing Arctic oil, funding anti-climate groups, and pinning our hopes on unproven mass-scale carbon capture and storage is very practical.
And the oil industry’s continued failure to meaningfully engage with and adapt its business models to the global energy transition required to fight climate change also suggests a refusal to recognise reality.