Big Oil’s bad day – for a change

Climate change activist, guru and New Yorker contributing columnist Bill McKibben called it the “most cataclysmic day so far for the traditional fossil-fuel industry.” Shareholders at the major oil companies such as ExxonMobil, Royal Dutch Shell and Chevron have long tried to push the oil giants to change their ways and address the damage to the climate they have caused over many decades.  McKibben, in a recent article, wrote that a “remarkable set of shareholder votes and court rulings have scrambled the future of three of the world’s largest oil companies.”

Last week, a court in the Netherlands ordered Royal Dutch Shell to dramatically cut its emissions over the next decade—a mandate it can likely only meet by dramatically changing its business model. Then, a few hours later, 61% of shareholders at Chevron voted, over management objections, to demand that the company cut so-called Scope 3 emissions, which include emissions caused by its customers burning its products.

Oil companies are willing to address the emissions that come from their operations, but, as Reuters has pointed out, the support for the cuts “shows growing investor frustration with companies, which they believe are not doing enough to tackle climate change.”

Powerful proof of those frustrations also occurred when ExxonMobil officials announced that shareholders had (over the company’s opposition) elected two dissident candidates to the company’s board, both of whom pledge to push for climate action.

McKibben wrote:

“The action at ExxonMobil’s shareholder meeting was fascinating: the company, which regularly used to make the list of most-admired companies, had been pulling out all stops to defeat the slate of dissident candidates, which was put forward by Engine No. 1, a tiny activist fund based in San Francisco that owns just 0.02 per cent of the company’s stock, but has insisted that Exxon needs a better answer to the question of how to meet the climate challenge. Exxon has simply insisted on doubling down: its current plan actually calls for increasing oil and gas production in Guyana and the Permian Basin this decade, even though the International Energy Agency last week called for an end to new development of fossil fuels. Observers at the meeting described a long adjournment mid-meeting, and meandering answers to questions from the floor, perhaps as an effort to buy time to persuade more shareholders to go the company’s way. But the effort failed. Notably, efforts by activists to push big investors appear to have paid off: according to sources, BlackRock, the world’s largest asset manager, backed three of the dissident candidates for the Exxon board.”

The court case involving Shell is noteworthy. The Dutch court found that, though Shell has begun to make changes in its business plans, they are not moving fast enough to fall in line with the demands of science, and that it must more than double the pace of its planned emissions cuts. “The court understands that the consequences could be big for Shell,” Jeannette Honée, a spokeswoman for the court, said in a video about the ruling. “But the court believes that the consequences of severe climate change are more important than Shell’s interests.” Honée continued, “Severe climate change has consequences for human rights, including the right to life. And the court thinks that companies, among them Shell, have to respect those human rights.” Shell plans to appeal the court decision.

McKibben concluded, “It’s clear that the arguments that many have been making for a decade have sunk in at the highest levels: there is no actual way to evade the inexorable mathematics of climate change. If you want to keep the temperature low enough that civilization will survive, you have to keep coal and oil and gas in the ground. That sounded radical a decade ago. Now it sounds like the law.”

Maybe the times are truly changing.

Cutting greenhouse gases

Fireball by Dan via Flickr CC

Congress and the Biden Administration are taking the first steps to reduce emissions of two dangerous greenhouse gases: methane, which is emitted during natural gas extraction and by leaks from oil and gas wells, and hydrofluorocarbons, which are used in refrigeration and air-conditioning systems.

Both of these planet-warming gases are many times more potent than carbon dioxide, even though they don’t stay in the atmosphere as long. Scientists say dealing with them is critical to slowing the pace of global warming.

The Senate, using a rarely invoked law to reverse a Trump administration rollback on methane, essentially reinstated an Obama-era regulation imposing controls on leaks of methane from oil and gas wells. And the Environmental Protection Agency moved to implement new curbs on the production and importation of HFCs, which Congress approved late last year.

“By taking fast action on these short-lived climate pollutants, of which HFCs are the most potent, we can buy ourselves some time and actually help avoid climate tipping points,” said Kristen N. Taddonio, a senior climate and energy adviser for the Institute for Governance & Sustainable Development.

The 52-42 Senate vote reinstates the Oil and Natural Gas New Source Performance Standards, a handful of Obama-era regulations on methane emissions that were rolled back by former President Donald Trump in August 2020. The measure drew support from every Senate Democrat, as well as Republican Sens. Susan Collins (R-ME), who has opposed GOP efforts to deregulate methane emissions in the past; Lindsey Graham (R-SC); and Rob Portman (R-OH). The rule is expected to be taken up and passed by the House of Representatives in this month.

The standards alone won’t be sufficient to meet the president’s pledge to slash greenhouse gas emissions by 50 to 52 percent compared with 2005 levels by 2030 — a goal meant to help keep global warming this century to 1.5 degrees Celsius, but it represents an important step toward meeting that commitment, because methane is seen as a major driver of climate change.

Senate Majority Leader Chuck Schumer called the Senate’s move “one of the most important votes, not only that this Congress has cast but has been cast in the last decade, in terms of our fight against global warming.”

Progress and hope are back in the picture.