By Nora Drake, UC Santa Barbara
If you’ve seen an advertisement touting an oil company’s commitment to renewable resources, you might think that the industry has made great strides toward reducing carbon emissions. Not so, says UC Santa Barbara professor of political science Paasha Mahdavi.
In new research published in The Review of International Political Economy, Mahdavi and his co-authors (Jessica Green of the University of Toronto, Jennifer Hadden of the University of Maryland, and Thomas Hale of the University of Oxford) explore the stark contrast between how the 10 largest international oil firms talk about their commitment to decarbonizing and what actions they are actually taking to shift away from fossil fuels.
“This project looks at what has been called ‘greenwashing’ in the oil and gas sector,” Mahdavi said. “We tried to combine information on what oil and gas firms tell their investors and what they are actually doing in terms of clean energy. What we found is that – perhaps unsurprisingly – there is very little connection between what firms say and what they do.”
Instead, major oil firms engage in what Mahdavi and his coauthors call “hedging,” or making relatively small investments in green energy while also maintaining large stakes in traditional oil markets. “Hedging is the idea of managing risk,” Mahdavi explained. “It means a firm is investing in upstream oil production while also investing in a small wind farm and in energy efficiency. They’re doing both things because they are trying to minimize risk if there is stringent policy or shareholder pressure in the future. They stop short of fully committing to any one investment or sector – other than oil, that is.”
The oil companies may give lip service to their green energy investments, but that is far from the full picture. “Even the most ambitious companies are spending less than 0.1 percent of their total revenues on renewables and low-carbon solutions,” said Mahdavi. “They might be saying that they’re going to invest in solar and wind, but, while they do invest in those types of companies, it’s a drop in the bucket in terms of their total expenditures.”
In order to track the difficult-to-quantify data of corporate messaging, the team looked at over 1700 investor calls from 2004 to 2019. “We evaluated about 16 million words that are part of these conversations,” Mahdavi said. “We tracked what firms were saying regarding six different components of climate politics and climate policy — things like carbon pricing, carbon capture, national laws and international agreements”
The research team chose investor calls in order to hold the firms accountable. “We picked this method because this is not just cheap talk,” Mahdavi explained. “Firms are held liable for what they say to their investors, both legally and financially. There is enough of a costliness there that we felt it’s a bit harder for firms to spin or outright lie.”
The researchers then compared the firms’ statements to data from their operations, Mahdavi explained, including how much carbon they emit, how much energy they use, their future oil commitments and their renewable and non-oil investment deals.
They found a large disparity. Mahdavi and his co-authors were surprised to discover that not a single firm was strictly committed to decarbonization, but there was a lot of variation in their level of commitment. “People used to think that all of these firms were similar, or divided along continental lines,” Mahdavi said. “It’s not just that American firms like Exxon or Conoco operate one way and European firms like Shell or BP operate another way.”
Rather, the team found that geographical location mattered because of a combination of regulatory and political factors. “National policy and domestic corporate culture – particularly domestic investor culture – have an impact on how global companies operate,” Mahdavi said. “It’s not necessarily the case that global policies like the Paris Agreement by themselves dictate policy and decarbonization. We found that there is variation that tracks with how individual companies are regulated and how they differ in corporate culture.”
The disparities across the industry are ultimately a good sign, Mahdavi explained, because it means that change can come from more manageable local efforts, as opposed to just from multi-national climate accords. “It’s a somewhat hopeful message that you can impact and influence change with domestic policy and investor culture in your home country. You don’t have to rely solely on international climate policy.”
Looking to the future, Mahdavi says that he hopes this research impacts how activists and local governments approach climate regulation for the oil industry. “I hope this information about the nuances that do exist in the oil sector and the competing pressures the companies are facing influences the design of stronger policy, activist demands and shareholder demands to ultimately find the right pressure points that could lead to lasting change,” he said.
Anonymous
Kevin, you should be governor of this state! Nuclear is the best and cleanest option we have and could provide plentiful reliable electricity at low cost, uplifting our standard of living. Providing abundant fresh water would be an added bonus. Naturally, california will shut down its last nuclear reactor instead. If we were to build a wind farm covering about 70,000 acres, we could replace the power that Diablo canyon generates, at least for the portions of the day when the wind blows. The Diablo canyon plant only occupies about 20 acres, much lower environmental footprint.
That Shellenberger thread was spot on.
Just more oily propaganda comments from the big carbon shills, funded by the Kochs. Nuclear will never be the answer until fusion comes of age. The oil companies know that any new nuclear will be mired in years of startup at huge cost, so they promote it at the cost of the real non-carbon answers.
Shellenberger is just full of nonsense:
https://skepticalscience.com/shellenberger-book-review.html
Wow, that is quite the mouthful of unsubstantiated propaganda and conspiracy theories! Between that and the single, clearly biased, book review you’ve convinced me everything Shellenberger says, writes or tweets is false information… I’m gonna go out on a limb and say @3:23 didn’t actually read the book and neither of you read the twitter thread Kevin linked.
What do real climate scientists have to say about Shellenberger’s crockpot propaganda?
Take your pick of non-twitter sources, since we all know how scientifically authoritative twitter users are:
https://www.desmog.com/michael-shellenberger/
https://www.realclimate.org/index.php/archives/2020/07/shellenbergers-op-ad/
https://yaleclimateconnections.org/2020/07/review-bad-science-and-bad-arguments-abound-in-apocalypse-never/
https://climatenexus.org/climate-issues/misleading-arguments-abound-in-op-ed-promoting-michael-shellenberger-new-book/
Kevin, Chip and I were narrowly focused on nuclear energy and how it is the only current technology that can provide the huge amounts of green energy (and fresh water) needed to reduce our carbon output and significantly reduce our dependency on fossil fuels. It is of no surprise groups taking a climate alarmist approach doesn’t speak highly of someone who downplays the sensationalism. I take it you didn’t read the thread he linked? It is a rather short thread, please read it and tell us what you don’t like about it vs. telling us what you don’t like about the person that wrote it.
Thanks. His book is fantastic and this video is even better covers all the issues. Anti-nuclear is the anti-vax of clean energy.
https://www.prageru.com/video/abundant-clean-and-safe?utm_source=ytc&utm_medium=post&utm_campaign=5minvideos
3208- I’ve had solar powered homes and have powered other buildings since 2003. Have had 5 EVs. I became disillusioned about solar wind and batteries. So you’re against nuclear?
Nuclear is green?!?! In what alternate universe? Cradle to the grave maybe the worst energy source of all.
Nuclear power is saddled with huge startup costs that take decades to recoup, huge ongoing insurance costs because of their safety problems, container erosion problems in the molten salt reactors being touted as “safer”, and the gigantic problem of what to do with the resulting waste, which is dangerous for centuries or millennia, depending on your reactor technology. Other than that, Mrs. Lincoln, how was the play?
Big carbon butt snorkeling by someone with a low-level degree in anthropology like Shellenberger just doesn’t cut it, unless you’re on his end of the revenue stream from the Kochs.
Now do michael Moore’s documentary specifically wind solar segment. Is he a Koch bro and oil lobbyist? Wake up.
https://youtu.be/EHSGsDipTOU
Adding more nuclear and decrease burning more petroleum, is not the end of the energy equation. But it is a way to buy time to transition to an as yet discovered alternative. Why wait until the magic source is finally uncovered? Add nuclear ow to the current mix and use it to decrease the present worst non-nuclear options. More bang for the buck with nuclear, so its negative residuals surely are not as bad as the current climate alarmism over burnin fossil fuel burning and accepting the high unreliability of sun, wave, wind and even now water. Rather see more dams, built since hydro-electric looks like the best of all. But of course, NIMBY. Though tiny home nuclear power generators would be the most energy transmission efficient. Create the energy at home and use it at home.
The BS people here are in the “alternate facts” universe for energy, AGW, and COVID. Multi-untalented, but good at pushing social media lies.
Good thing we have the oil apparently since Gavin Newsom just issued an emergency order to override environmental regulations and allow biting much more diesel to avoid massive blackouts. If you want to use less oil, you have to be for more nuclear. Keep Diablo open. Build 4th generation even safer nuclear reactors. Desalinate the near infinite supply of water adjacent to us.
https://mobile.twitter.com/ShellenbergerMD/status/1433131968720293894
These professional handwringers act as if they and we this citizens aren’t using the oil out of necessity and that the windmills/solar and battery farms aren’t reliant on massive amount of diesel and coal for manufacturing, installation and maintenance. Think offshore windmills are built by electric boats?- the massive concrete footings, the 100’ fiberglass blades, thousands of tons of steel per windmill made with energy from where? The green projects are transfers of wealth is all. Focus on nuclear or you are a another environmental hack.
Anti-nuclear virtue signaling or (or “we need both nuclear and wind” bogus arguments) ultimately result in higher emissions. Closing San onofre unclear plant in San Diego meant far more natural gas is burned and closing Indian point in New York by Cuomo jacked up carbon emissions by 35%! Closing Diablo as Newsom wants to do will continue the tradition. France is 71% nuclear powered. Think about that. Why do our socialist types in USA have a pathological opposition to at least imitating the one sane policy socialist France has benefited from for decades?
https://twitter.com/ShellenbergerMD/status/1433138600762232833?s=20
No surprise that Kevin would peddle big carbon nonsense:
https://skepticalscience.com/moore-doc-peddles-dangerous-climate-denial.html
The day that the nuclear industry is self insured and the taxpayer is not on the hook is when we might consider nuclear power to be “safe”. There is a reason that no nuclear plant operator is willing to carry their own insurance, anywhere in the world.
Based off your comment on hoping the Firefly rocket test that failed was not nuclear powered, how are people supposed to take any of your opinions on nuclear energy seriously when you don’t even have a Wikipedia level of knowledge on the subject?
Typically unreasonable levels of projection, hypocrisy, and irony voiced here. While there is research into nuclear thermal rockets (https://en.wikipedia.org/wiki/Nuclear_thermal_rocket#Current_research_in_US_since_2000), the Firefly rocket certainly isn’t one,
Funny how fundamentally dishonest people who have objected to everything Michael Moore has ever said will use him as an authority when it suits them. He doesn’t have to be a Koch bro or oil lobbyist to be wrong.