The world loses when Big Oil holds all the cards
Imagine that the future of civilization is being decided at a poker table. The four players are the chairman of ExxonMobil, the distinguished climate scientist James Hansen, climate activist Greta Thunberg, and the mayor of St. Petersburg, Florida, one of America’s most flood-prone cities.
The game is Texas Hold’em. The players place their bets as the dealer distributes the cards and reveals the flop, turn and river. When it’s time to reveal their cards, Exxon shows a royal flush, the strongest possible hand. The odds against drawing such a hand are about 650,000-to-1.
The other players might dismiss this as luck, except Exxon always wins, often with royal flushes.
Something like this is happening in courtrooms worldwide, with communities and citizens suing oil companies and their associations in cases alleging they misled the public about global climate change. At least 20 cities and states in the U.S. are seeking damages and other sanctions, charging the industry with covering up its own science that fossil-fuel pollution is causing the Earth to warm.
Inside Climate News broke the story in 2015 that Exxon’s researchers predicted fossil fuels would cause global temperatures to rise. Analysts at several other organizations confirmed the company had buried this finding. Earlier this month, the journal Science published a study in which a team from Harvard and the Potsdam Institute for Climate Impact Research reportedly determined the American Petroleum Institute (API) knew about climate change since the 1950s, the coal industry knew in the 1960s and electric utilities, while General Motors and Ford knew in the 1970s.
As the Guardian and others reported, the API created a multi-million-dollar misinformation campaign in 1998, funded by major oil companies to ensure that “climate change becomes a non-issue.”
“The majority of Mobil and ExxonMobil Corps’ public communications promoted doubt on the matter,” the Harvard/Potsdam analysts confirmed. “For decades, some members of the fossil fuel industry tried to convince the public that a causative link between fossil fuel use and climate warming could not be made because the models used to project warming were too uncertain.”
In a perfect world, the oil and coal industries would have responded to their research by changing their business models to capture one of history’s biggest market opportunities — the worldwide shift to carbon-free energy. But they didn’t. The International Energy Agency now says there should be no more investment in oil and gas if we hope to keep global warming within tolerable limits.
Peer-reviewed research in the journal Nature concluded in 2021, “The vast majority of the world’s known fossil fuel reserves must be kept in the ground to have some hope of preventing the worst effects of the climate emergency.” Nevertheless, the industry is still obfuscating and investing in more oil and gas production.
The U.S. Energy Information Administration (EIA) expects America’s crude oil production will set new records in 2023 and 2024. And the International Institute for Sustainable Development expects $750 billion of new oil and gas development annually by 2030, more than enough money to finance a global clean-energy transition.
United Nations Secretary-General Antonio Guterres has called these investments “delusional.” The only path to global energy security, stable prices and a livable planet “lies in abandoning polluting fossil fuels, especially coal, and accelerating the renewables-based energy transition,” Guterres says.
But he says “hundreds of fossil fuel giants around the world” are planning to produce 230 billion barrels of untapped oil before 2030, supported by large financial institutions like Citigroup, J.P. Morgan Chase, and Bank of America. At the UN climate summit COP-27 last November, negotiators received information on more than 900 oil and gas companies. Of these, 96 percent had expansion plans and nearly 289 companies were developing infrastructure that would “lock the world into a fossil future.”
The Glasgow Financial Alliance for Net Zero, a coalition of leading financial institutions, calculates the world should be investing $4 in renewable energy for every $1 in fossil fuels to keep global warming to no more than 1.5 degrees Celsius above pre-industrial temperatures — the Paris Agreement guardrail to prevent the worst impacts of climate change. But a recent analysis found that since 2016, only 7 percent of $2.5 trillion in energy-related bank loans and bond underwriting has gone to renewable energy.
Although all countries are making plans under the 2015 Paris Agreement to reduce their fossil-energy pollution, the energy transition “seems more disorderly than ever,” according to McKinsey and Company. “Momentum toward renewables is growing but without a corresponding decrease in global emissions,” the company says.
In the United States last year, the oil industry spent more than $90 million on more than 700 lobbyists to push back against policies to reduce oil and gas production.
In effect, the U.S. Supreme Court has sided with the industry by ruling the Environmental Protection Agency (EPA) cannot issue a nationwide cap on carbon emissions from power plants. In 2010, the court had already increased the political clout of oil and gas companies by ruling that corporations can make unlimited contributions to election campaigns. Last year, oil and gas spent nearly $30 million on congressional election campaigns.
Fossil-fuel investors are holding some powerful cards, too. Another peer-reviewed study estimated that international efforts to limit new oil and gas development could result in up to $340 billion in legal claims from investors that want to recoup their losses.
Asked about cities, states and citizens taking Big Oil to court, a Shell spokesman responded with doublespeak. “Addressing a challenge as big as climate change requires a truly collaborative, society-wide approach,” the spokesman reportedly said. “We do not believe the courtroom is the right venue to address climate change, but that smart policy from government, supported by action from all business sectors, including ours, and from society, is the appropriate way to reach solutions and drive progress.”
Clean-energy advocates have been willing to come to the table, but it hardly seems worth it when Big Oil holds all the cards, carries a big gun and plays by its own rules.
William S. Becker is a former U.S. Department of Energy central regional director who administered energy efficiency and renewable energy technologies programs, and he also served as special assistant to the department’s assistant secretary of energy efficiency and renewable energy. Becker is also executive director of the Presidential Climate Action Project, a nonpartisan initiative founded in 2007 that works with national thought leaders to develop recommendations for the White House as well as House and Senate committees on climate and energy policies. The project is not affiliated with the White House.
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