Big Oil and the ‘green capitalist’ delusion

We can’t rely on major oil companies self-regulating their way to a sustainable future. While they present an increasingly “green” face for public relations purposes, behind the scenes they’ve set a course on the continued expansion of oil production for years to come—with devastating consequences for the climate.

In a discussion paper published in September, titled “Big Oil Reality Check”, environmental advocacy organisation Oil Change International analysed the current climate commitments of eight of the largest oil and gas companies: BP, Chevron, Eni, Equinor, ExxonMobil, Repsol, Shell and Total. None of their plans are ambitious enough to align with the Paris Agreement goal of limiting warming to 1.5 degrees Celsius.

All the companies are among the world’s worst climate criminals. Some, however, stand out from the pack. Royal Dutch Shell is one. Just one day after announcing its climate commitments in April, it announced a new A$10 billion coal seam gas project in Queensland with the enthusiastic approval of state Premier Annastacia Palaszczuk.

ExxonMobil is another. It is projecting a 52 percent increase in oil production by 2030—more than double the growth forecast by any other company even after using loopholes to omit significant portions of their business. Both Shell and Exxon employed scientists who accurately predicted the effect of burning fossil fuels on global warming decades ago, but their research was kept secret so as not to undermine the companies’ business models.

Several companies have outlined “net-zero” pledges for reduced emissions over the long term. But because there is no existing model or standard for how this would be carried out, they are free to be creative with their interpretations of what the pledges mean. For example, all rely heavily on the potential of yet unproven carbon sequestration technology as a sort of magic wand to wave and miraculously match expected carbon output when needed.

As it stands, burning the oil and gas currently held in reserves would be enough to push global warming beyond 1.5 and probably even 2 degrees Celsius. These are worldwide disaster numbers. Further extraction from new reserves demonstrates a willingness to prioritise short-term profits over the future of the planet. New fossil fuel projects, new infrastructure and the additional capital required will make a timely transition to renewables less and less likely, because the companies involved will be unwilling to let their investments go to waste. As the report puts it, every new project is “making it more difficult, both politically and economically, to limit production”.

The analysis and reporting from Oil Change International are valuable, but its demands and suggestions for defeating these oil giants leaves something to be desired. While the group makes valid points—such as the need for wealthier nations to foot the bill for a transition to renewables and for a focus on workers and communities most affected—it depends too heavily on lobbying the financial sector and governments, while downplaying the potential of wider social movements to win radical climate action.

The conclusion of the report—that the big oil companies won’t oversee the demise of their current, highly profitable, business models—applies to the financial sector and capitalist governments too. Despite their own announcement of climate-friendly initiatives, major banks around the world remain heavily invested in fossil fuels. Another report by Oil Change International, released earlier this year, found that 35 global banks provided a total of US$2.7 trillion to fossil fuel companies in 2016-19.

As the authors of “Big Oil Reality Check” note, the COVID-19 pandemic has been used as cover for more than US$169 billion in new fossil fuel projects in G20 countries this year. Despite a slumping global market for oil and gas, governments in the world’s wealthiest nations continue to approve these projects ostensibly as a path to economic recovery. Shell’s project in Queensland is only one piece of Australia’s “gas fired recovery” plan recently announced by Liberal Prime Minister Scott Morrison and backed by the opposition Labor Party. Neither market trends nor government policies are leading us towards the kind of “green capitalism” promised by many in the environment movement.

Those who stand to profit the most from the fossil fuel investments of today already understand the environmental consequences and trust that they will fall disproportionately on the shoulders of others. The pandemic has again shown us that we are not all in it together and class distinctions are only heightened in times of crisis.

Climate change is a class issue as well, something all advocates of climate action must recognise. As Brazilian trade unionist and environmental activist Chico Mendes put it, “Environmentalism without class struggle is just gardening”. If we’re to overcome the entrenched power of the fossil fuel industry and the governments that serve it, we need to build the power of our side into something that can pose a fundamental challenge to the entire, destructive status quo of capitalism today.