Big oil companies are not meeting their climate pledges — and blocking new agreements
AYESHA RASCOE, HOST:
It's been another summer of extreme weather - wildfires, hurricanes, heat. Human-driven climate change doesn't cause such events. It does make them more likely. The solution, scientists say again and again - stop burning oil, gas and coal. Get to basically net-zero greenhouse gas emissions by 2050. We hear a lot about what consumers can do, but what about companies, specifically big oil companies? Jason Bordoff studies this. He's the founding director of the Center on Global Energy Policy at Columbia University. Thanks for joining the show.
JASON BORDOFF: Thanks for having me, Ayesha. Good to see you again.
RASCOE: What are some notable pledges or commitments that oil companies have made on energy goals?
BORDOFF: There's a lot of variance in the industry, and it's important to not paint with a broad brush. There are the large household names - the so-called seven supermajors - people have kind of heard of, and some of those are spending more on clean energy. I think what's been notable to me in this year, this summer, when we've seen severe wildfires and heat and humidity indexes that are literally, in some places in the world, testing the limits of human survival - at the same time that energy security, with Russia's invasion of Ukraine, and the gas crisis is back on the agenda, and oil and gas use is going up, not down. Prices are going up, not down. So given all this, we've seen some of the more prominent energy companies walk back, somewhat, commitments they made to move away from oil and gas and toward clean energy. And the market has rewarded them for that. Their share price has gone up, not down.
RASCOE: Well, isn't that kind of, like, the fundamental conflict here? For a business that's trying to make money - if that's your business - is fossil fuels, then how can you really phase them out?
BORDOFF: I think for many, that's the view that they seem to have today. I think there are some that have made commitments to help achieve net-zero emissions, but I think the actual behavior we're seeing suggests skepticism that we're going to get anywhere close to these goals we're talking about, like net zero by 2050. So if you think the world is going to use oil and gas for a long time to come, then it makes sense, if you're a business, to continue to produce it - or a skepticism, maybe by the company or their shareholders, that they can be as profitable if they do shift from oil and gas to clean energy.
And, you know, the returns for renewables are not always as high. Again, oil demand this year will reach its highest level ever. It's going up, not down. And if any particular companies pull back from that, there are plenty of other companies, particularly nationally owned companies, that are investing tens of billions of dollars now to increase how much oil they can produce 10 years from now because they see a world where oil demand is going to go up, not down.
RASCOE: Do you think this will be a big topic at the next G20 summit in September and how these big economies can bring down consumption?
BORDOFF: I hope it is. It'll be at the G20. It'll certainly be at the U.N. climate meetings that are taking place this year in the United Arab Emirates. We should not be ramping up production and investment in oil and gas, even though right now prices are high. And we should acknowledge that politicians worried about their economies, worried about politics - even the Biden administration, which has passed the largest climate bill in history, has said, well, in the near term, we want oil and gas companies to produce more, not less, 'cause we're worried about gasoline prices, particularly going into an election year.
RASCOE: The International Energy Agency says investment by the industry and clean fuels remains, quote, "well short of where it needs to be." What are some of these investments that are needed? Is it energy storage? Is it carbon capture, sequestration? What is it?
BORDOFF: Look. We need all of those things. We need a lot of renewable deployment. We need some things that maybe the industry - energy industry wouldn't be doing. But, you know, auto industries need to be moving faster - and some are - to invest in the production of electric vehicles. Maybe energy companies could be helping to build the charging network where they have a network of gasoline stations, and those could be places where you could charge electric vehicles as well. We need not only electricity - I mean, we need a lot of renewable electricity, but we also need low-carbon fuels - things like hydrogen. Geothermal is another area that requires drilling to be able to access the significant energy resources that lie, you know, many miles below the surface.
So we need all of those things and more, and I think the energy industry is - can be well-poised to play a role in that. They should be leaning in. They should be on the cutting edge of those things. They have, I think, an obligation, given kind of where we are today and the historic problem that's been created by carbon emissions. But I think you can only ask any company to lean in so far at some point if the market is penalizing them, not rewarding them for moving in a faster direction to clean energy. And so what we also need to be doing is changing that dynamic.
RASCOE: That's Jason Bordoff. He is the director of the Center on Global Energy Policy at Columbia University. Thank you so much for being with us.
BORDOFF: Thanks for the invitation. Transcript provided by NPR, Copyright NPR.
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