Big oil bets big against climate action

Many of the world’s largest oil companies are betting that efforts to solve the climate crisis will fail — and they’re investing enormous amounts of money in new projects that would help make that failure a foregone conclusion.

Release the carbon bombs: A new report from The Guardian identified 195 new facilities planned for the next decade that the outlet described as “carbon bombs”: Oil and gas extraction facilities that would each release more than a billion metric tons of carbon dioxide over their lifetimes.

The U.S., Canada and Australia rank among the countries with the biggest planned expansions, The Guardian found.

The numbers are staggering: If they come to fruition, these new projects would release greenhouse gasses that — in the short term — equal a decade of emissions from China, the world’s leading carbon polluter, The Guardian found.

Over their full lifetimes, they would release the equivalent of 18 years of current global carbon emissions, The Guardian found.

No room in the budget: That’s in spite of a report last year from the International Energy Agency — set up in the 1970s to maintain oil and gas supplies — that new fossil fuel developments would make it impossible to cut emissions sufficiently to ensure a safe climate.

Why they’re doing it: Betting against climate action has historically been a good bet for the oil majors.

How so? In the three decades since the United Nations’s inaugural climate conference in Rio in 1992 — which first took up the issue of how carbon emissions from fossil fuels were changing the climate — the six largest oil and gas companies have made about $2 trillion dollars, according to a 2020 study by Taxpayers for Common Sense.

Usual business, unusual times: “Most oil and gas companies are just proceeding with business as usual,” Nils Bartsch of environmental nonprofit Urgewald told The Guardian.

“Some just do not care,” Bartsch said. “Some do not see their responsibility because governments around the world let them proceed, although of course these governments are often influenced by the industry.”

CLEANING UP — OR SELLING OFF THE PROBLEM?

Where they aren’t investing in new fields, oil and gas companies like Shell are largely meeting their carbon reduction promises by selling off their old, most-polluting ones — largely to unknown, and largely unregulated, foreign oil companies, according to a report released on Tuesday by the Environmental Defense Fund.

Shell has called this kind of “divestment” — sewing off its polluting assets without shutting them down — a key part of its pathway to become a net-zero business.

New owner, more emissions: The new owners released even more carbon dioxide and methane than the oil majors who sold them, study coauthor Andrew Baxter told Gizmodo.

Selling responsibility: “The oil and gas industry can sell their oil and gas assets for whatever reason that they want, but they can’t sell their climate responsibility,” Baxter said.

To divest or not: This problem — that a sale doesn’t equal a reduction in emissions — is part of why Larry Fink, CEO of asset manager BlackRock, told MIT’s Sloan Business School that BlackRock shouldn’t sell off its fossil fuel holdings.

Fink has often argued that BlackRock’s ownership of coal, oil and gas companies can help make the companies it invests in greener. But his company just announced plans to vote against many climate resolutions proposed this year by shareholders, the Financial Times reported.

Another kind of ticking bomb: These new fossil fuel assets also represent a large financial risk, according to tech news site Ars Technica.

Since they aren’t compatible with the world’s climate goals, new — and existing — fossil fuel developments could end up “stranded” by future climate action, Ars Technica reported.

That could cause a cascade of destruction across the pension funds, banks and investment houses who have bought into them, according to Ars Technica.

There’s a bigger danger: That fossil fuel companies will be able to use the threat of stranded assets to persuade governments to keep backing more expansion.