Most large oil companies no longer deny the connection between burning fossil fuels and climate change. In fact, they are scrambling to position themselves to be seen as part of the solution to what is increasingly seen by worried citizens as a major threat, according to a recent analysis of the industry from The New York Times.
Yet it’s a tough juggling act as the oil juggernauts are also under pressure from investors and Wall Street to turn healthy profits.
Royal Dutch Shell, France’s Total and others are putting substantial funds into clean-energy investments. Several companies have formed the Oil and Gas Climate Initiative to invest in low-carbon technologies and reduce the powerful greenhouse gas, methane.
The companies are trying to deal with what is shaping up as a major threat to their businesses: societal demands for a sharp curtailment of the consumption of the oil and gas that are the lifeblood of these organizations.
Yet about a third more oil is being burned than in the late 1990s, mostly because increasing numbers of consumers in countries like China and India have the means to drive cars, fly on airplanes and buy products made of oil-based plastic. And there is skepticism among people familiar with the industry about whether the world will be able to phase out fossil fuels in the near future because it would cost billions of dollars.
In response to these challenges, Shell seems to be edging away from being an oil company as it increases its investments in other energy. Chevron is not. Instead, it seems to be focusing on making its oil and gas operations more efficient and less emissions-intensive.
Chevron argues that it would be a mistake to force well-run companies to reduce their oil and gas production. Indeed, there may be scope for the most efficient producers to increase their oil and gas output, while still meeting climate change goals, the company says. Read the full analysis.
