Not so long ago oil companies “bank rolled climate change denial,” as Treehugger recently pointed out. The same post acknowledges the irony of oil companies “planning for the inevitability of man-made climate change.” Oil companies really do have climate adaptation strategies in place. As Marc Gunther of Greenbiz stated in an article last week, “Even the oil and gas industry — which, of course, is a major contributor to climate change — is paying heed.”
Why would an industry that pumped so much money into climate change denial invest in adapting to it? It’s really simple: climate change will affect the company’s bottom line. A 2009 report by IBM, Acclimatise and Carbon Disclosure Project found that the oil and gas industry is not prepared for the impacts of climate change to their physical assets. Climate change impacts, according to the report, “will become more severe creating new and enhanced risks for the oil and gas sector.”
The big three oil companies and climate change adaptation
Let’s look at how the big name oil companies (Shell, BP and Chevron). Why those three companies? All three companies track their greenhouse gas (GHG) emissions. All three acknowledge that climate change is real. BP, once known as British Petroleum, even goes so far as saying that BP stands for “Beyond Petroleum.”
Now let’s look specifically at how each company plans to adapt to climate change:
Royal Dutch Shell
The company known commonly as Shell acknowledges that carbon emissions “must be reduced to avoid serious climate change.” Specifically, the company believes that as it “increases its gas and oil production to help meet growing demand” it must focus on four main areas: natural gas, biofuels, carbon capture and storage, and energy efficiency in its operations.”
However, Shell also says that global population growth and economic development “may double energy demand by 2050” so “all energy sources will be needed, with fossil fuels meeting the bulk of people’s needs.”
Chevron admits that fossil fuels are a “contributor to increase in greenhouse gases in the earth’s atmosphere.” The company acknowledges that “there is a widespread view that this increase is leading to climate change, with adverse effects on the environment.” Two things caught my attention: Chevron is working at U.S. federal and state levels and internationally “to contribute to climate change policy discussions,” and it is investing in research and development (R&D) of technologies “that may reduce emissions or improve efficiency.”
BP supports “policies that we believe can address climate change,” including a carbon price that “applies economy-wide and treats all carbon equally, whether it comes out of an industrial smokestack or a car tailpipe.” The company believes that carbon pricing will do two things: make energy efficiency and conservation more attractive, and make what it calls lower-carbon fuels (it lists natural gas, nuclear and renewables) more cost competitive. In addition to regional and national carbon pricing schemes, BP supports the creation and implementation of a global cap-and-trade system.
None of the three companies really admit that in order to truly avoid the worst impacts of climate change globally, the use of fossil fuels must be phased out. However, the fact that the companies acknowledge climate change at all is a big leap from funding climate change denial.
Photo credits: Flickr user, andyarthur