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Oil companies don’t want to be known for oil anymore

Grist News

February 12, 2021

Author: Emily Pontecorvo

In a speech to his board of directors on Monday, Patrick Pouyanné, the CEO of French oil giant Total, announced that the company planned to change its name to TotalEnergies. He said the new name would anchor the company’s transformation into a “broad energy company,” and went on to describe the renewable energy assets Total added to its portfolio over the last year, including a stake in the largest solar developer in the world.

If approved by the company’s investors, Total’s name change would be the latest in a round of oil company makeovers that have accompanied a flurry of climate pledges over the past year. Last February, when BP announced its ambition to achieve net-zero emissions by 2050, it said its new purpose was “reimagining energy.” It later claimed it was pivoting from “international oil company” to “integrated energy company.” In December, the CEO of Occidental Petroleum, which also set a net-zero target, said in an interview that it was transitioning toward becoming a “carbon management company,” in reference to its investment in a facility that will suck CO2 out of the air.

Oil companies have been trying to rebrand themselves as cleaner and greener for years. BP famously changed its tagline to Beyond Petroleum in 2000 to advertise its move into solar and wind energy — then it caused the most disastrous oil spill in American history in 2010 and shed many of its renewable energy assets in the aftermath. In 2010, Chevron launched a campaign called “We Agree,” with advertisements that said things like “It’s time oil companies get behind renewable energy,” followed by the words “We agree” in red letters. Then it sold off its renewable energy subsidiary four years later. Exxon has been advertising its research into algae-based fuel since 2009, but over the past decade has only spent around $300 million on said research, or the equivalent of about 1 percent of its capital budget for 2020.

Robert Brulle, a sociologist at Brown University who has studied the industry’s disinformation campaigns for years, told Grist that these greenwashing efforts come in cycles, with companies increasing this kind of promotion in response to political shifts. “By running this sort of campaign, they hope to convince policy makers and the general public that there is no need for legislation,” he said in an email.

Is anything different this time? “It’s certainly a reflection of an enormous amount of pressure on these companies,” said Kathy Mulvey, the climate accountability campaign director at the Union of Concerned Scientists, citing pressure from shareholders, the divestment movement, lawsuits, and the prospect of new policies under the Biden administration.

Like BP and Shell, Total adopted a new “ambition” last year to achieve net-zero emissions by 2050. (Mulvey pointed out that BP and Total refuse to call them “targets” or terms to which they could actually be held accountable.) These European oil companies have taken baby steps in a positive direction, unlike American majors Exxon and Chevron, but still not enough to earn back public trust, she said. That would require establishing transparent, nearer-term emissions-reduction targets, including the emissions that come from burning the products they sell, and advocating for policies consistent with those changes.

In one notable way, Total is a step ahead of its peers. A month ago, it became the first oil major to abandon the American Petroleum Institute, the most powerful U.S. oil and gas lobbying group, citing the group’s opposition to environmental regulations and its backing of candidates in the 2020 election who do not support the Paris Agreement. Like BP and Shell, the company has also written off the value of some of its oil reserves. In Pouyanné’s speech, he told the board he expects Total’s oil products to drop to as low as 30 percent of its sales in the next decade. Next year, the company plans to allocate 20 percent of its investments to renewables. Shell also announced this week that its oil production peaked in 2019 and is expected to keep falling by 1 to 2 percent per year.

However, both companies plan to replace lost oil sales by growing their investments in liquified natural gas, another fossil fuel. They advertise their ability to deliver “carbon-neutral” liquified natural gas, rendered thus with the purchase of nature-based carbon offsets. But investigations have shown that the carbon math on such offsets does not add up.

Nate Aden, a senior associate at the World Resources Institute’s Business Center, said that most oil industry climate pledges do not reflect the kind of transformation that’s needed to prevent catastrophic warming. Even though BP and Total have started to use their deep pockets to make serious entries into the offshore wind industry, Aden said what they do over the next year will be the real test. “It’s one thing when oil prices are really low, so of course they’re going to try to diversify to find other sources of revenue and to hedge against this,” he said. But if oil prices rebound, will they change course?

Brulle isn’t holding his breath. “It remains to be seen if these rebrandings go beyond yet one more cycle of greenwashing,” he said.

Total, BP, and Shell all expect fossil fuels to remain a significant portion of their business for decades to come, which their “net-zero” plans account for with improbably large amounts of carbon offsets. But it’s not impossible to imagine a more sweeping transformation for these companies. Aden said the poster child for this is Ørsted, the largest offshore wind developer in the world. The company was previously called DONG Energy, short for Danish Oil and Natural Gas, but it changed its name after selling off all of its fossil fuel assets in 2017.

Oil companies have the technical, engineering, and planning expertise, as well as the financial and human capital, to restructure the energy system at the scale that’s required to stabilize the climate, Aden said. “I don’t think we can succeed in any transition without them, frankly.”

This story was originally published by Grist with the headline Oil companies don’t want to be known for oil anymore on Feb 12, 2021.

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Energy, Environment & Climate