Excellent news from the fossil fuel industry this week: some of the biggest global oil and gas companies have publicly declared that they will no longer take part in greenwashing.
Unfortunately, rather than a Damascene realisation that they should finally start putting more of their multi-billion Dollar profits into renewables, it is sadly a case of these companies simply dropping the climate-friendly façade and saying what they really think. They know we are addicted to oil, and they like it. They also very much look forward to getting the developing World addicted too. In some way it is refreshing to see them ditching the relentless smoke-and-mirrors act to present their true Super-Villain identities to the planet.
Earlier this month ExxonMobil CEO Darren Woods told Fortune magazine that the solution to the climate crisis rests not with Big Oil but with consumers: “People who are generating the emissions need to be aware of [it] and pay the price, that’s ultimately how you solve the problem.” ExxonMobil is the world’s largest private sector oil company and made a cool $36 billion profit last year. The company scores a D on climate lobbying NGO InfluenceMap’s ranking, which states: “ExxonMobil shows negative engagement on most forms of climate regulation and advocates for energy policies that would accelerate fossil fuel development.” The Texan oil titan is also infamous for its eerily accurate proprietary climate change predictions dating back to the 1970s, which were somehow never made public in an unfortunate case of the-dog-ate-my-homework.
So, you think Woods deserves Top Super Villain billing for washing his hands of the whole climate change responsibility thing? “Hold my Coke,” said Saudi Aramco President and CEO Amin H. Nasser, stepping up to the speaker’s podium at CERAWeek 2024 on Monday 18 March. The conference brings together 8,000 international delegates in Houston, Texas to discuss the Multidimensional Energy Transition: Markets, climate, technology and geopolitics. Aramco scores a dismal E+ (the plus is doing a lot of heavy lifting here) on the aforementioned LobbyMap ranking. InfluenceMap may choose to revisit that mildly encouraging “+” once they read the full text of Nasser’s speech.
Solution for too much oil is more oil
“We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately, reflecting realistic demand assumptions,” says Nasser, which reportedly drew warm applause from the CERAWeek audience. He also directly contradicted the International Energy Agency’s (IEA) forecast of peak oil demand by 2030, while criticising what he described as the minimal impact on emissions achieved so far by renewable energy technologies and electric vehicles (EVs). This may seem rich coming from an industry that has been working hard to slow down and dilute international climate negotiations and commitments, as frequently reported in this column and elsewhere on NordSIP, and which is also rumoured to be behind a co-ordinated mass media campaign of disinformation about EVs. Commenting on Nasser’s speech, Jeff Ordower of climate NGO 350.org said: “They work night and day to torpedo a transition to renewable energy and then have the audacity to critique the slowness of the transition itself.”
Key to Nasser’s argument is the fact that fossil fuels are cheaper than the low-carbon alternatives, which means they are better for consumers. However, he only refers in his speech to the costs of hydrogen, a fossil fuel alternative that is popular with oil companies (so-called Blue hydrogen is produced using hydrocarbons) but which is not yet considered a serious challenger to Internal Combustion Engine (ICE) vehicles: “hydrogen still costs in the range of $200 to $400 per barrel of oil equivalent, while oil and gas remain much cheaper. Meanwhile, without subsidies, EVs are up to 50% more expensive than an average internal combustion engine car. They cannot be subsidised forever,” declares Nasser. However, wind and solar are universally accepted as being demonstrably cheaper technologies for any new energy generation projects. His speech also mysteriously neglects to mention the $7 trillion in subsidies enjoyed by the global fossil fuel industry in 2022.
World should thank Aramco, apparently
Just a moment while the Laundromat brings out the proverbial World’s Smallest Violin ahead of Nasser’s next quote: “Despite our starring role in global prosperity, our industry is painted as transition’s arch-enemy!” bemoans Nasser. This brings to mind a TV drama character shouting down the road at a departing partner’s taxi: “After all I’ve done for you! You would be nothing without me!” Perhaps if the fossil fuel companies had begun investing more than a negligible percentage of their enormous profits in genuine low-carbon technologies, ceased greenwashing, denying climate science, and lobbying against international climate action, the alleged demonisation might have diminished somewhat. In the meantime, Nasser’s tone simply echoes the lamentations of a doomed industry.
In the interest of balance, is there anything remotely sensible to be found in Nasser’s speech? Yes, as it happens he does inadvertently raise some important issues: “As prosperity eventually rises in the Global South, so will demand for energy, and these nations cannot afford expensive energy solutions. Yet despite representing over 85% of the world’s population, they currently receive less than 5% of the investments targeting renewable energy.”
This is indeed a problem, but where we might politely differ is in the choice of solution. Nasser points out that the annual oil consumption per capita in developing countries is only one to two barrels, compared with 9 barrels in the EU and an impressive 22 in the US. He therefore states that the logical next step is to get everyone up to US-style fossil fuel consumption levels by extracting yet more oil and gas. Might we respectfully suggest an alternative approach? How about bringing US and EU oil consumption down to less obscene levels, while simultaneously compelling wealthy nations to address the yawning climate finance gap so that developing nations can afford to leap-frog obsolete fossil technology and build future-proof renewable energy grids instead? We could use some of those gigantic fossil fuel profits for starters.
