A nascent organization funded by global oil companies to address climate change may seem ironic — but it's a credible effort that could actually have a real impact.
Why it matters: Under pressure from investors and lawsuits, oil companies are starting to acknowledge climate change and slowly shift their business models in response.
The intrigue: Last week at the first-ever U.S. meeting of the group, called the Oil and Gas Climate Initiative, a rare and surprisingly candid discussion took place between CEOs of the world’s biggest oil producers and leaders in climate change action.
- At the invite-only event at the Intercontinental Barclay hotel in Manhattan, roughly 150 people asked questions of 11 oil-company CEOs, including from Saudi Aramco, European producers BP and Shell and Houston-based Occidental Petroleum.
- The guest list was strict and security officers were everywhere. Leaders of several environmental groups were invited, and as the two-hour discussion wore on, the dialogue got increasingly pointed.
Nigel Topping, CEO of a nonprofit coalition called We Mean Business, noted (accurately) that the companies were still overwhelmingly investing in finding new oil and gas over cleaner energy resources — “lest you suggest you’re really betting the farm on the future.”
The other side:
- Josu Jon Imaz, CEO of Spanish producer Repsol, responded by saying he and other CEOs must balance transitioning to cleaner sources of energy over decades with returning short-term profits for shareholders. “The real dilemma and difficulty of all these jobs is to combine both things,” Imaz said.
- Patrick Pouyanné, CEO of French producer Total, said cutting oil production too drastically would hurt the economy. “I don’t want to be accused in 10 years — because I would have diminished my amount of oil — for hiking the price of oil because the world will continue to need more.”
The big picture: The burning of the fossil fuels that oil and gas companies produce is a big reason Earth’s temperature is rising, yet their products are also foundations of the global economy.
- Whether you love or hate them, the role these companies play is inherent to addressing climate change, particularly in the absence of U.S. presidential leadership on the issue.
The background: The Oil and Gas Climate Initiative was officially founded 4 years ago, but it’s just starting to do things worthy of attention.
- The first U.S. member companies — ExxonMobil, Chevron and Occidental Petroleum — joined last week. That brings the total to 13 companies, accounting for roughly a third of the world’s oil and gas production.
- The companies also pledged last week to cut by one-fifth their emissions of methane.
- Each member contributes $100 million to Climate Investments, a $1.3 billion investment fund the group launched in November 2016. That effort has also had a slow start.
Of note: The initiative has limitations, driven by its makeup and mission.
Go deeper: Read the full column in the Axios stream.