The fossil fuel industry’s faith that the modern world economy will be powered by its products for the indefinite future is usually unwavering. But cracks in that faith recently appeared in Houston at the top annual oil industry conference, known as CERAweek.
The trade publication Platts S&P Global noted that “talk of oil at CERAWeek felt a bit more lackluster this time around,” according to several attendees. Various pressures — from climate-anxious investors to competition from renewables — apparently are tempering the oil and gas industry’s usual optimism.
Perhaps also contributing to the mood was Norway’s announcement, just a day before the conference began, that its sovereign wealth fund was divesting from over 100 oil and gas exploration companies around the world. This news led to headlines like “World’s largest sovereign wealth fund to scrap oil and gas stocks.” Its fund managers were clear this decision wasn’t out of concern for the climate, but instead to make sure they didn’t lose money on risky oil and gas investments.
Only a few years ago, however, CERAweek was brimming with industry bravado, in which oil company CEOs mocked renewable energy sources and made claims that the oil industry just wanted to lift poor people out of poverty.
At the 2014 conference, attendees even heard Gina McCarthy — the Obama-appointed head of the Environmental Protection Agency at the time — promise that “[c]onventional fuels like coal and natural gas are going to play a critical role in a diverse energy mix for years to come.”
Oil and Gas ‘Crisis of Confidence’
Eldar Saetre, CEO of Norwegian oil company Equinor, is well aware of the growing negative perception of the oil industry. His company — known until recently as Statoil — is trying to rebrand itself as an oil company that also cares about the climate. As Politico reported, Saetre’s CERAweek address this year spoke of a “crisis of confidence” for the industry.
“Multiple signals and reports tell us that the oil and gas business can be facing a crisis of confidence,” Saetre told the CERAweek audience. “… it is in fact a real threat to our license to operate, unless we proactively and collectively address it.”
This message is definitely a change from 2015 when Saetre told CERAweek attendees, “There’s no way the world is getting out of oil and natural gas production.”
While Saetre’s tone has changed, his basic message has not. He seemed intent on waking up his peers about the looming threats to their industry, saying, “There is definitely denial within companies and in boardrooms, as well as ignorance and an unwillingness to act.”
Denying the reality of climate change is nothing new to oil company boardrooms, but here Saetre seems worried about a different kind of denial within the fossil fuel industry: denial of how much changing public perceptions and techologies really threaten the future of oil and gas.
“We need to drive this as an industry, to be part of the solution and not be dragged into a low-carbon future,” Saetre told The Wall Street Journal.
The concept of being dragged into a low-carbon future highlights how the big players in the oil industry really think about addressing climate change. If it happens, it will be when the industry is dragged into that reality, one which it seems intent on fighting — with rebranded oil companies and industry-funded propaganda campaigns.
Oil Industry Spending Big on PR and Gas as Climate Solution
Saetre’s concerns make for a good soundbite but are out of step with his industry’s ongoing efforts to attack renewable energy and sell the world on natural gas as a climate solution. The oil and gas industry sees renewable energy, increasingly competitive with fossil fuels, as a threat and is ramping up efforts to position the world for a future based on fossil fuels.
Mike Sommers, CEO of the American Petroleum Institute, was at CERAweek pushing the idea that the oil and gas industry were leading on solutions to the climate crisis. “While politicians haven’t been able to figure out a strategy on climate change, this industry has stepped up to the plate,” he said.
Seeing how the API led high-dollar efforts to persuade the public and politicians that climate change was a myth (and how it accounts for half of all lobbying and ad dollars spent by energy trade groups), this statement rings a bit hollow. Is it a sign that the industry and its top lobbying organization have truly had a change of heart on climate change?
The industry “solution” that the API is marketing is the myth that gas is the future of clean energy production, claiming it is addressing the climate crisis. While oil and gas producers like to say that gas replacing coal power is a climate solution, they conveniently ignore the fact that overall greenhouse gas emissions rose in America in 2018, despite this transition. While burning natural gas (methane) for power is cleaner than burning coal, the combined lifecycle of gas production including methane leaks, methane flaring and venting methane into the atmosphere means that natural gas is not a climate solution and could be potentially worse for the climate than burning coal.
But that hasn’t stopped the industry from partnering with the likes of The New York Times and Washington Post to place paid advertisements (“branded content”) into forms that look stunningly similar to actual articles written by the news outlets themselves, helping push industry talking points without any journalistic fact-checking or context. This is how the industry is “stepping up to the plate” on climate change — by continuing to spend lots of money to convince the public and politicians the industry has solved climate change with a product it conveniently is selling.
In The Washington Post, the American Petroleum Institute ran a major piece of branded content in this fashion. But because this isn’t a story written by The Post, it is full of industry propaganda, featuring quotes from the likes of Wayne Winegarden, senior fellow at the Koch-funded Pacific Research Institute.
“Renewable technologies aren’t ready for prime time,” Winegarden says in the advertisement, “Until then we still need traditional fossil fuel power sources.”
I became a @washingtonpost subscriber in 2016, but every damn time I see this planet-killing paid propaganda from American Petroleum Institute disguised to look like a legitimate Washington Post article, I think about quitting. You can’t get in bed with big oil & not get dirty. pic.twitter.com/dmnRCvF7oG
— Bradley Thompson (@BradT253) March 14, 2019
The New York Times has run a similar advertisement posing as an article for Shell.
A just-released report from UK think tank InfluenceMap notes just how much money the oil industry has been spending to combat efforts to address climate change: more than $1 billion on climate lobbying and PR since the Paris Agreement.
BREAKING Our new report finds oil majors have spent over $1bn on climate lobbying and misleading branding since the #ParisAgreement.
— InfluenceMap (@InfluenceMap) March 22, 2019
Once again, the fossil fuel industry has apparently chosen to double down on convincing the world that climate change is no big deal and oil and gas are not the problem. And the industry wants the public to buy natural gas as an actual climate solution and is putting the PR dollars behind that message.
Oil and Gas Industry Bets Big on a Plastic Future
One indicator that the oil and gas industry recognizes the rising threats of renewable energy, electric vehicles, and climate policy is its ongoing effort to significantly ramp up petrochemical and plastic production. If the electrification of transportation kills demand for oil as a fuel, the industry will just turn that oil into plastic.
Even Eldar Saetre with his warning was very clear about the industry’s long-term plans, echoing his 2015 promise, and revealing how his newly rebranded company will be producing oil and gas for decades into a climate-changed future.
“Changing the world’s energy mix will take time. And the fact is that the world will need oil and gas for many decades to come. For example, oil is used to make your clothes, your shoes, and your mobile phone,” said Saetre.
As the DeSmog series Fracking for Plastics notes, Saetre is not alone in his ambition to either burn all the oil and gas or turn it into plastics.
However, soon after the elite of the oil world left Houston for their oil fields, refineries, and cushy industry-funded academic and think tank jobs, the city where CERAweek occurred got a good reminder of what a future based on petrochemicals can look like. A local petrochemical plant ignited and burned for days, filling the skies over the Texas city with toxic, black smoke.
— KPRC 2 Houston (@KPRC2) March 20, 2019