Shareholders, citizens, and Dutch judges converged to shakeup the oil industry on May 26, 2021.
In three independent proceedings, a clear message broke through: oil companies are being made responsible for emissions of third parties. This is the end game. And the rules for the industry are being written by people that want no part of it.
Here’s what transpired:
ExxonMobil’s shareholders elected two directors endorsed by Engine No. 1, an activist investor group that promotes the idea that ExxonMobil’s contribution to carbon dioxide emissions creates an existential risk to the company’s “long term business model.” The message it seems is that shareholders want the company to remain in the energy business, just not fossil fuels. It is an enormous challenge. The company has deep resources and global reach. Let’s see how the new board navigates its way forward.
Chevron’s shareholders approved a resolution that instructed the company to “substantially reduce the greenhouse gas (GHG) emissions of [its] energy products (Scope 3).” Scope 3 refers to emissions from assets that are not owned or controlled by the reporting organization. In essence, this means emissions from customers and suppliers, i.e., third-parties.
A court in the Netherlands ordered Royal Dutch Shell to cut its carbon emissions – and the carbon emissions of the company’s suppliers and customers – by 45% by 2030. “The court orders Royal Dutch Shell, by means of its corporate policy, to reduce its CO2 emissions by 45% by 2030 with respect to the level of 2019 for the Shell group and the suppliers and customers of the group.”
These are among the biggest oil companies in the world. Boards are being pressured to change. Will a diamond emerge?
Southern California Gas Co. on Dec. 18 issued a “SoCalGas Advisory,” asking customers to reduce use of natural gas to lower the risk of gas and electricity shortages during a cold snap. It lifted the advisory two days later.
“Working with our customers and suppliers, we were able to manage our system to deliver reliable heating and electricity to our region during this recent cold snap,” said a SoCalGas spokesperson.
California and New Mexico have asked a federal court to allow them to join a lawsuit over a final rule issued by the Interior Department that reduces venting and flaring from oil and gas operations on public and tribal lands.
The states support the position of the Department’s Bureau of Land Management, putting them in opposition to the stance taken by Montana, North Dakota and Wyoming, which in November filed the lawsuit opposing the rule in the U.S. District Court in Wyoming and seeking an injunction against its implementation by the BLM.
Chevron Corporation (NYSE:CVX) announced a $19.8 billion capital and exploratory investment program for 2017, including $4.7 billion in expenditures by affiliated companies.
“Our spending for 2017 targets shorter-cycle time, high-return investments and completing major projects under construction. In fact, over 70% of our planned upstream investment program is expected to generate production within two years,” said Chairman and CEO John Watson.
The Department of the Interior’s Bureau of Ocean Energy Management (BOEM) has released its final plan to guide future energy development for the Nation’s Outer Continental Shelf for 2017-2022.
The Proposed Final Program offers 11 potential lease sales in four planning areas, including 10 sales in the portions of three Gulf of Mexico Program Areas that are not under moratorium and one sale off the coast of Alaska in the Cook Inlet Program Area. The Beaufort and Chukchi Seas planning areas in the Arctic are not included in the Proposed Final Program.
The Air Resources Board (ARB) has released for public review revised drafts of its Short-Lived Climate Pollutant Reduction Strategy and the related Environmental Analysis.
The ARB will hold a series of public workshops and hearings on the revisions.