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Why Big Oil's climate club grew

Someone surfing a wave with an oil rig in the distance
Surfers ride waves in front of an oil rig off. Photo: Mark Ralston/AFP via Getty Images

The news that Exxon and Chevron are joining a global industry partnership called the Oil and Gas Climate Initiative could signal a broader pivot under two rather new CEOs, ExxonMobil's Darren Woods and Chevron's Michael Wirth.

The big picture: "I think it's clear that this shift reflects the leadership changes at both Chevron and Exxon," a source familiar with the companies' thinking tells Axios. Occidental Petroleum, another large U.S. player, also joined. The arrivals add heft to the 4-year-old group, which already includes BP, Shell, Saudi Aramco and roughly a half-dozen others.

Where it stands: It's actually the second climate group Exxon has signed onto under Woods. In mid-2017 they joined three Europe-based global majors as founding corporate members of the Climate Leadership Council, a U.S. group pushing a carbon tax proposal.

  • "Exxon has...tended to shy away from joining group efforts, so between joining OGCI and the Climate Leadership Council there appears to be a cultural shift underway under Woods. This is still Exxon, though, so any shift is likely to be both slow and gradual," the source said.

Flashback: Exxon also announced in July that it's abandoning the American Legislative Exchange Council, a conservative group that disputes mainstream climate science.

The intrigue: These moves come at a time when the White House is going in the other direction on climate by scuttling or paring back a suite of Obama-era policies.

  • However, the DOE has actually encouraged U.S. companies to consider joining OGCI during meetings with them in the past year, an administration official said.

What they're saying: One source who works directly with the energy industry called the decisions consistent with Exxon's and Chevron's approach and OGCI's absence of policy positions.

  • "OGCI is squarely focused on technology. Both [Exxon] and [Chevron] are long on innovation and technology," the source said in an email exchange.
  • Exxon and Chevron initially declined to join the group when it formed in 2014.
  • But as Axios' Amy Harder noted when she broke the news yesterday, these decisions are a sign of how pressure from investorsand lawsuits are pushing oil companies to do more.

Reality check: It will hardly halt criticism from climate advocates that oil-and-gas companies should be taking much stronger steps.

  • For instance, look for continued pressure on Big Oil to take more aggressive stances, such as setting binding emissions targets and abandoning trade groups — including the U.S. Chamber of Commerce — that support the rollback of U.S. regulations.
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