The oil and gas industry is huge; worldwide it employs 12 million workers and has an annual income of 3.5 trillion dollars. If oil and gas companies re-employed their skilled workers to new fields like renewables and energy storage and reinvested their revenues into clean energy, the world could rapidly transition to net zero.
Oil and gas companies now call themselves “energy companies” signalling that they are fully on board with net zero and are investing in clean energy.
Yet the International Energy Agency (IEA), the inter-governmental body that advises governments on energy issues, reports that just 1% of global clean energy investment comes from oil and gas companies.
The IEA’s report, “The Oil and Gas Industry in Net Zero Transitions”, found that oil and gas producers would have to spend 20 times more of their capital on clean energy to meet our climate targets. The IEA warns, “The industry therefore faces a choice – a moment of truth – over its engagement with clean energy transitions. So far, its engagement has been minimal.”
Profits within the oil and gas sector are eye-wateringly high. The five “super-majors” – BP, Shell, Chevron, ExxonMobil and TotalEnergies – have made £223 billion since Russia’s invasion of Ukraine in 2022. Businesses investing in renewables can never match these profits.
Exxon’s CEO, Darren Woods, acknowledged this in a recent interview, saying, “Exxon does not see the ability to generate above-average returns for investors from clean energy generation such as wind and solar.”
Shell’s CEO, Wael Sawan, similarly justified plans to increase its oil and gas production by 500,000 barrels a day by 2025.
The oil and gas sector argues that it must continue to invest in new oil and gas fields to maintain “energy security”.
At the same time, the oil and gas industry lobbies against national and international policies to support technologies that would reduce our reliance on oil and gas. It calls on governments and policy to be “technology neutral”. For example, the industry demands that oil and gas from new reserves is given the same favourable status as renewables on the basis that at some time in the future carbon capture and storage, a technology that scientists repeatedly warn is an unproven technology, will remove the CO2.
Attempts by governments to invest in clean technologies have been criticised as “distorting free markets” by think tanks funded by the oil and gas sector. Although the oil industry also benefits from tax credits and other financial help from governments.
According to the International Monetary Fund (IMF), the global oil and gas industry benefits from subsidies of 16 billion dollars a day.
The CEOs of Exxon and Shell have told us with uncustomary transparency that they have no interest in helping us get to net zero. We should listen to them and understand that they are solely driven by profit. Society and governments should quickly get behind the innovative companies at the forefront of developing new technologies. Gaslighting by the oil and gas industry will not take us to net zero.