Introduction
Today’s column addresses the fourth and final focus area for my critique of ExxonMobil’s actions in regard to the transition away from policies that reinforce global warming, climate change, and in support of primary reliance on clean energy technologies in an environmentally-friendly energy mix. Fortunately, a recently published study, conducted for Carbon Brief, provides an excellent template for this critique. The study focuses on measuring the performance gap between rhetoric and pledges made by the four leading oil majors over the past decade or so, in support of the global energy transition and the resulting need for urgent concrete actions.
The details on the study are: 1] Titled, Oil Majors “not walking the talk”; 2] Prepared by Carbon Brief, UK, NGO; lead author, Josh Gabbatiss; 3] Published in February 2022 in PLOS ONE, a multidisciplinary and interdisciplinary science and society Journal. The four oil majors surveyed are ExxonMobil and Chevron [USA]; British Petroleum [UK]; and Shell [Europe].
Study Purpose
For starters, as is widely known ExxonMobil along with the three other privately owned oil majors have been consistently linked to the generation of significant shares of global greenhouse gas emissions. Some analysts have suggested that, collectively, they are responsible for as much as ten percent of all global CO2 emissions! Carbon Brief, a well-known civil society grouping, has put out a public brief which asserts that, the world’s four largest oil-and-gas companies are “failing to back their words and pledges on climate change with genuine action and investment”.
They assert that oil majors’ references to climate change and low-carbon energy have roughly tripled in the annual reports of the four majors. Indeed, over the past decade these companies have issued public pledges to cut emissions and invest in renewables, but this is “simply not occurring.” To the contrary, all four companies continue to focus primarily on producing fossil fuels. Moreover, this is occurring in a time of strong profitability for the fossil fuel industry, as the global energy crisis is leading to increases in oil-and-gas prices. This is now complicated by the Russia-Ukraine war.
Method and Results
The first part of the study counted the frequency with which 39 key words or phrases, [for example, “net-zero” and “low-carbon”], were mentioned in annual reports for the period 2009-2020. The frequency of occurrence was then divided by the total word count in each report. The result was used as a “rough proxy for the degree of awareness and importance placed on these issues”; when the annual reports were surveyed. The annual reports were treated as the “most official and representative documents”. And, the study observed there was “a clear increasing trend”.
The second part of the study analyzed pledges, clean energy, and decarbonization undertaken by the oil majors. For this purpose, 25 indicators of progress were identified. These range from acknowledging that burning fossil fuels causes climate change, to the companies scaling back oil and gas exploration. Each indicator was assigned a score; with plus 1, indicating a pro-climate action activity; minus 1, indicating something that contradicts such activity, and zero, meaning no evidence of pledges or action in either direction. Plotting the indicators on a chart reveals a significant increase in companies pledging to address climate change. However, the study reveals that “translating pledges into concrete actions…is considerably less than pledges”. Moreover, the study also concludes that the big oil majors have mainly opted for “low-hanging fruit,” such as, declaratory statements of intent [support for climate science or carbon pricing].
Additionally, the study observes that, overall, the oil majors have revealed “scant regard to the pressing need to shift away from, or reduce dependence on, all types of non-sequestered fossil fuels…overall, statements consistently argue the reverse”.
Finally, the study assessed the data in annual reports to ascertain whether these supported the oil majors’ climate action rhetoric. Thus, total fossil fuels earnings and spending revealed that, while investment in exploration and production had peaked in 2013, spending on this has continued to be the “pillar of business for all four majors”; with the result that the average daily rate of production, DROP, of oil and gas has remained fairly constant over the decade; excepting of course the Covid impact year, 2020.
Further, spending on renewable energy along with the amount of electricity the oil majors have generated from low-carbon sources have not been transparent. But, it is estimated that, overall, less than one percent of capital expenditure over this period went towards low-carbon investments.
Conclusion
Today’s column completes the presentation of my critique of ExxonMobil’s performance in regard to action on global warming, climate change and the transition to a more environmentally-friendly energy mix. To keep it balanced and fair, the critique has relied on ExxonMobil’s defence of its actions, in its own words and has focused on four areas of its actions; namely: 1] its performance in relation to environmentally damaging oil spills; 2] its practiced deceit, now before the Courts; 3] spreading disinformation and climate change denial; and, 4] not walking the talk.
Next week I continue with this analysis.
