In the last several weeks, more mainstream voices have started to echo the long-held concerns of climate activists: that—despite their deluge of green advertising and rhetoric—fossil fuel companies are not leading the way toward an energy transition.
It was an easy line to swallow for a while. ExxonMobil and other oil majors all went out of their way to voice support for the Paris Climate Agreement after its signing in 2015. As the U.N. climate talks approached in 2021, majors recommitted to net-zero promises, on the back foot after pandemic-era shutdowns cratered prices and profits.
That’s all changed now. As major U.S. and European producers rake in record earnings, even ostensibly more forward-thinking companies like BP and Shell are doubling down on fossil fuels and walking back climate pledges. That about-face, it seems, has allowed some industry-friendly advocates to finally see the light.
In an op-ed for The New York Times published Monday, Obama White House staffer Jason Bordoff—who now runs the Center on Global Energy Policy at Columbia University—bemoaned that drillers have reversed or downplayed climate pledges and continue to invest small amounts of cash in green ventures. “The fact that shareholders seem to prefer that oil profits be distributed as dividends rather than reinvested more in low-carbon energy solutions suggests they are also skeptical about the industry’s ability to be as profitable in clean energy,” he wrote.
In 2020, Bordoff was optimistic about climate pledges made by BP, after the oil giant announced it was aiming to cut its emissions to zero by 2050. “While skepticism is warranted, the latest corporate pledges are compelling,” he wrote then. “If backed by real action, they mean these firms’ own economic interests will require they move away from oil and gas and push for stronger climate policy.” (It’s important to note that the academic center Bordoff runs routinely accepts millions of dollars in donations from the fossil fuel industry, including BP and those name-checked in his recent New York Times piece.)
But this week, Bordoff seemed to conclude such “real action” had not occurred, arguing BP and other drillers face a choice: “Either match their rhetoric with actions demonstrating convincingly that they are prepared to invest at scale in clean energy or acknowledge that their plan is to be among the last producers and bet on a slower transition.”
Bordoff wasn’t the only one to have a recent change of heart. Christiana Figueres—a key architect of the Paris Agreement—has talked frequently over the years about the leading role that oil companies could play in helping solve the climate crisis. She co-authored a 2021 piece for CNN with BP CEO Bernard Looney where the pair acknowledged they were “strange bedfellows” united by their “stubborn optimism” and “fierce commitment to inclusivity.”
“If anything,” they continued, “companies are outpacing governments in embracing the Paris goals—which is exactly what the world needs. Governments regulate and incentivize, but actually cutting emissions largely falls on others to implement. Companies have to do much of that—and society has a stake in helping them.”
Figueres struck a different tone last month, offering a mea culpa in Al Jazeera:
More than most members of the climate community, I have for years held space for the oil and gas industry to finally wake up and stand up to its critical responsibility in history.
I have done so because I was convinced the global economy could not be decarbonised without their constructive participation and I was therefore willing to support the transformation of their business model.
But what the industry is doing with its unprecedented profits over the past 12 months has changed my mind.
Like Bordoff, she ended with an ultimatum:
Do they want to gain some public license (if any is left for them) by speeding the winds of change or do they want to be the last men standing? If they choose the latter, the transition to clean energies will occur despite them, but it will likely be too late for humanity. The fossil fuel industry will have powered human development in the 20th century and then destroyed it in the 21st.
Both Figueres and Bordoff might be a bit late to the party, but it’s nice to have them. Over the coming decades, drillers are poised to become even more whiny and reactionary than ever. As Bordoff alluded to in his piece, the possibility of peak oil demand in the early 2030s will potentially drive companies to scramble to sell the last barrel by any means necessary.
What might seem like good news to climate advocates could soon yield an even meaner, uglier cadre of top executives. Over the weekend, The Wall Street Journal reported that the industry is having trouble attracting young talent, especially for white-collar posts. Enrollment in Petroleum Engineering programs at U.S. colleges is at its lowest point since before the shale boom, having dropped 75 percent since 2014. Where enrollment in those programs tends to track closely with oil prices, the last few years of higher prices and profits have seen that relationship dissolve. Despite the attractive salaries oil companies offer, younger graduates aren’t being swayed. Climate concerns and bleak long-term prospects mean that students are choosing other careers, forcing some schools to rebrand programs.
If going into white-collar oil and gas jobs is becoming an increasingly political choice, what might that say about the people who choose to do it? A decade or two ago, going to work for Chevron or Exxon might have been just another corporate gig. Declining interest in those careers across the board may well mean that those opting to go against the grain of more climate-conscious peers are increasingly right-wing. As today’s already paranoid, reactionary top executives age out and retire, the generations that replace them could lean even harder to the right.
Regardless, there may well just not be enough money in low-carbon ventures to make it worth oil companies’ while. That’s certainly true of wind and solar: Shell CEO Wael Sawan cited low returns as the reason the company was dialing back its plans to invest more in clean energy. But it’s also not clear what margins will be in businesses where fossil fuel companies’ expertise and capital are better suited to succeed, like carbon capture and storage. Will keeping carbon dioxide underground forever be more profitable than selling oil? Can decarbonizing industrial processes with green hydrogen compete with selling liquefied natural gas to emerging market economies?
Outgoing Financial Times energy editor Derek Brower urged readers, at the end of June, to keep expectations for oil and gas climate leadership low, suggesting drillers will give the wrong answers to the questions Bordoff and Figueres posed. “Remington was good at typewriters, but not the personal computer,” he wrote. “Why expect ExxonMobil or Saudi Aramco to lead—or even survive—a shift from their core business of digging up fossil fuels and selling them? And do you really want them to?”