Public consensus on the existence and impact of a changing climate in the United States has been changing. Today, 67% of Americans now say that the federal government is not doing enough to lessen the effects of climate change. As the world’s second-biggest contributor to pollution, the United States has a key role to play if the world is to win its war against global warming.
In recent years, as climate math has become unignorably clear, a growing number of people have seen the need for more action. Think about it: just last November an endless loop of wildfires engulfed California; it was just January, the last year when Chicago recorded temperatures lower than those of some regions on Mars. Climate scientists have been sounding the alarm, but it is obvious that a lot more still needs to be done.
As Elon Musk pushes for electric cars to fill the highways and Warren Buffet bets a whopping $30 billion on clean energy, it would seem in step with our times for oil companies to start changing the script they use every time the climate change conversation comes up. Instead of a narrative that puts profits before the wellbeing of the planet and its inhabitants, Big Oil needs to come to a reckoning and revise this approach—what is arguably its original sin.
Big Oil and Covid-19
As the world began grappling with the reality of the fast-spreading Corona virus in March, many countries began instituting lockdowns. This led to a drastic drop in demand for oil. As some had already started predicting, the oil market across the globe imploded. The demand for oil seemed to evaporate overnight. In the U.S., oil prices fell below zero for the first time in history.
What followed was a conversation around Big Oil and whether the world was living through the industry’s last days. While some concluded the Corona virus pandemic had done irreparable damage to Big Oil, it soon became clear the reality was not that straightforward. For smaller players in the oil business, the pandemic could force them out as Big Oil buys more wells at extremely low prices.
That said, there is a general conclusion among economists that while Covid-19 will not spell doom for the oil industry, some changes that the pandemic has brought will start a decline likely to transform it into a much smaller version than what we have today.
The fissures might soon start showing: after living through the Covid-19 pandemic, there is a likelihood that people’s priorities might change, especially those who may have recovered from the disease. There might be an awakening on the need to embrace cleaner energy and move away from fossil fuels to improve people’s health.
The Dire Situation in Texas
As Big Oil extends its reach throughout the state of Texas, residents of the Lone Star State have to contend with an increased risk of cancer (PDF) in addition to other illnesses like asthma. In 2016, the U.S. Environmental Protection Agency (EPA) put in place standards designed to lower the levels of air pollution as the more than 7,000 approved gas and oil sites release tons of air pollutants into the atmosphere every day.
However, the Trump Administration suspended most of these measures, throwing into uncertainty the wellbeing of millions. While the national average for air quality hazard is 1.44, Texas’ is 2.8% higher at 1.48.
Environment Texas Research & Policy Center released a report (PDF) revealing that in 2016, more than 23 million people in Texas urban areas experienced five or more days of notably low air quality, exacerbating their risk of asthma attacks, premature death, etc. Some oil and gas production facilities in Texas are not required to file data showing their emissions, making it even harder to monitor these companies and the effect the pollutants they release into the atmosphere will have on adults and children in Texas.
What Big Oil Has Known about Climate Change since the 1970s
Big Oil has been actively opposing climate change action for decades. This in spite of the fact that these giant oil companies have known for a long time that fossil fuels are contributing to climate change. Over the years, Big Oil has created a sophisticated network of think tanks whose sole purpose is to stop climate action.
ExxonMobil, for instance, knew that carbon emissions had a warming effect on the planet as early as the 1970s. Scientists working for the company revealed in an internal report in 1978 that the average global temperature could rise to 3% if the carbon dioxide in the atmosphere was to double.
Shell, on the other hand, clearly understood that fossil fuel emissions were causing global warming as early as in the 1980s, according to documents authored by the company’s scientists. In the documents, the scientists attempted to compel the company’s leadership to take action heeding to the early warnings of a warming planet.
Instead of curbing emissions, Big Oil has for decades used billions of dollars to suppress any substantial climate action. The industry has in recent years publicly acknowledged climate change and promised to find solutions, but has stayed away from committing to any significant climate action goals. This is why it was such a surprise when BP promised last February it was aiming for net-zero carbon emissions by 2050. It is the biggest oil corporation to make such a promise.
Climate-minded Investors Can Demand Big Oil to Take Action
The challenge for the industry is an existential one: how can an industry that makes its money by satisfying the world’s seemingly ever-growing appetite for an oil plan for a future where fossil fuels will be obsolete? With the possibility that the demand for oil may start falling as early as 2025, the industry seems to be slowly softening its stance against climate action.
For Big Oil to do more, climate-minded investors need to demand that oil companies commit to a particular date in the future to achieve net-zero emissions. They should also require them to create business models that align with the set target as well as create a framework where progress can be accessed through quantitative mid-term milestones.
These companies should also be pressed to release their emissions data. This would be the very first step in a series of many that would push these oil and gas multinationals to put humanity’s well-being ahead of profits.
Augurisk is a risk assessment platform for Climate Change, Natural Hazards and Societal Risks. We help people and businesses assess climate risks associated with their properties, so they can better prepare for the future.