To say it hasn’t been a good week for the Fossil Fuel Industry is putting it mildly. The top news — as recounted by media outlets clamoring to spew forth the most sensational headlines (“historic upset,” “cataclysmic day,” “climate earthquake”) — was the invasion of ExxonMobil’s board by shareholder climate activists. That a relatively small investor was able to mount a proxy campaign against the biggest Daddy of Oil Giants, ExxonMobil, and nab two (now three) director positions, was truly a David vs Goliath tale.
Then there was the pushback on corporate foot-dragging of greenhouse gas emissions reductions, in this instance by Chevron shareholders, and with a Dutch court‘s refusal to accept the semantic carbon-reduction contortions made by Royal Dutch Shell.
There was such a glut of news that the expiration of a fossil fuel corporate subsidy received little attention, but all this very bad news (for Big Oil) was capped off by the Biden administration’s announcement that it is suspending oil and gas leases in Alaska’s Arctic National Wildlife Refuge.
A Changing Landscape
All of these developments are set within a changing landscape that portrays a fossil fuel industry in decline. Big Oil’s narrative of the existential need for their products to fuel economic growth appears sketchy amidst the ever-growing expansion of renewable energy.
It’s not just solar that’s booming. The wind sector is poised to take off with the recent approval of the first major offshore wind farm in the U.S. The Vineyard Wind 1 project is anticipated to be the first in a slew of projects that will attract thousands of new jobs. And it doesn’t help that once oil-friendly International Energy Agency has now called for a halt to any new fossil fuel developments.
The industry’s ability to blame consumers for global warming woes with its just-responding-to-consumer-demand (aka “drug dealer’s defense”) line has also been weakened. Just last month, Exxon’s dirty little climate messaging tactics were exposed for all to see: A new study outlines how the company for decades copied the tobacco industry’s playbook of downplaying their climate change culpability while shifting responsibility onto consumers.
The other piece of this (seemingly) rosy picture is the legitimate and greenwashed attempts by companies to prove the “greenness” of their products to an ever-more critical consumer base. Ford and General Motors have thrown themselves into the electric vehicle market, while a growing contingent of companies touts its commitment to go 100% renewable. Even Big Oil’s financial backers are distancing themselves as evidenced last December when all U.S. banks pledged not to finance drilling in the Arctic National Wildlife Refuge.
What Does This Mean for Fossil Fuel Industry’s Future?
Wow. All this sounds hopeful for the future of the planet. Well, not so fast. Yes, the fossil fuel industry is on its heels, scrambling to pivot within this changing landscape. There have even been tentative forays into clean energy investments, but significant change has been slow, slow, slow.
In fact, it seems that the industry is more focused on shape-shifting its operations into other, equally damaging products. In their desperate search for new markets, oil companies are now expanding into plastic production, with plastic production expected to quadruple by 2060. Indeed, the main polymers producer generating single-use plastic waste is, you guessed it, ExxonMobil.
The industry’s false narrative has also been updated to slot neatly into our new climate-focused environment. Instead of a climate-denial focus, fossil fuel companies now promote a climate-friendly story, for instance, of “responsibly sourced” and “clean” natural gas.
Despite this week’s encouraging developments, industry experts, including Mark Stoeckle of Adams Funds, see a more business-as-usual future: “People who are expecting substantive changes soon at (Exxon) will likely be sorely disappointed.”
What can be done? Shareholder activism must continue, but we also need regulatory and legislative action to institutionalize the departure from an economy tied to the fossil fuel industry to one that supports the expansion of clean energy.
To be sure, the Biden administration has proclaimed a commitment to climate action, but recent activity — including defending the Willow oil and gas project in Alaska — signals that the untethering from Big Oil is not fully complete.
On Capitol Hill, more aggressive and bold legislative change is needed to eliminate fossil fuel subsidies while approving an infrastructure package that promotes clean energy and its ancillary jobs. As Republican voters waver in their support of clean energy policies, substantive action from lawmakers must materialize in order to lock in systemic change that will endure beyond the terms of climate-friendly presidential administrations.