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Tina Casey headshot

Trump Stands Alone: Global Coal Giant Affirms Climate Change

By Tina Casey

ExxonMobil made waves across the blogosphere last week when it criticized the influential lobbying group ALEC for thwarting action on climate change -- even though the company is itself an ALEC member. Now it looks like a leading global coal company is coming over to the "green" side, too. Earlier this week, global mining giant BHP Billiton warned the U.S. Chamber of Commerce and two other coal-friendly organizations that it will pull its membership over their failure to link energy policy with climate action.

The move further isolates President Donald J. Trump in his position denying the scientific consensus on climate change. His unstinting efforts on behalf of the U.S. coal industry include withdrawing the US from the Paris Agreement on climate change, making it the only nation on Earth refusing to participate in the historic accord.

BHP Billiton, coal and climate change

Does BHP's warning to coal organizations mean that it is giving up on coal? Not really -- no more than ExxonMobil is giving up on shale gas. However, it does signal that competition is heating up over the shrinking space for fossil fuels in the low carbon economy of the future, and diversified companies are more than willing to push their coal-dependent competitors off the cliff.

To be clear, BHP's current focus is on carbon capture and emissions reduction, not the death of coal. In a new report that supports its decision to put pressure on coal trade organizations, the company explains:

Fossil fuels are an affordable, reliable and accessible way of meeting energy demand and they currently provide more than 80 per cent of the world’s primary energy. Under all current plausible scenarios, fossil fuels will continue to be a significant part of the energy mix for decades.

Nevertheless, BHP is equally clear that it accepts the scientific consensus on climate change and supports the Paris Agreement on climate change:

BHP accepts the Intergovernmental Panel on Climate Change’s (IPCC) assessment of climate change science, which has found that warming of the climate is unequivocal, the human influence is clear and physical impacts are unavoidable...As a result, responding to climate change is a priority Board governance and strategic issue for BHP.

BHP may be underestimating the swiftness of the global transition to clean energy, but at this point it is still reasonable to assume that fossil fuels will continue to play a role in the global economy for the foreseeable future.

The company argues that economic development and climate goals should be firmly entwined. It's a more climate-aware version of the clumsy "energy poverty" argument typically advanced in support of coal. BHP advocates for coal and change at the same time:

...the world must find ways to significantly improve energy efficiency, reduce emissions from the use of fossil fuels and increase the share of alternative energy sources such as renewables, batteries and nuclear power...

Aside from putting pressure on trade organizations, the Australia-based company is also putting its money where its mouth is. BHP cites a track record of emissions reductions efforts going back to the 1990's, and this year it announced a new carbon capture and sequestration research collaboration with the University of Melbourne, Cambridge University and Stanford University.

Diversification wins

If major trade organizations bend towards BHP's will, that means more trouble for companies that rely exclusively on coal. On its part, BHP already has a diversified position that should enable it to weather a rapid transition to a low carbon economy.

Carbon capture and sequestration may not be the answer (carbon recycling is more promising), but BHP has already made its first move into utility scale solar plus storage, through participation in the Lakeland Solar and Storage Project in Queensland. If all goes well, BHP could leverage the project for a deeper dive into renewables:

Outcomes of the extensive test program will provide insight for BHP and the resources sector in general, and the results of the project will be shared widely. At the same time, we continue to evaluate the integration of renewable energy sources into our own operations, together with incumbent energy sources to provide the appropriate mix of system reliability, emissions reduction and lowest cost.

BHP also has extensive interests in natural gas and copper, an element that has renewable energy applications across the board including solar, wind and hydropower (just ask The Copper Alliance!).

In other words, the company is in position to ramp up other operations if and when its coal business winds down.

As for ExxonMobil, the company plunged into the shale gas market several years ago and hasn't looked back. It's no coincidence that low cost natural gas has been the driving force behind a torrent of coal power plant closures in the U.S.

The Pressure is on

In its new climate report, BHP took aim at the World Coal Association and the Minerals Council of Australia as well as the U.S. Chamber of Commerce. The World Coal Association has already pushed back, claiming that BHP misrepresented its position on climate and energy policy.

A WCA spokesperson cited the organization's website as proof of its good intentions on climate change. The same could be said of the U.S. Chamber of Commerce, which updated its position on climate change in October:

Climate change is a serious challenge that needs to be addressed through thoughtful policies that will have a meaningful impact. The Chamber supports efforts to reduce greenhouse gas emissions and believes technology and innovation offer the greatest potential to reduce emissions and mitigate the negative impacts of climate change.

That update could reflect the outcome of a years-long fight over climate change and renewable energy within the organization -- or it could just be more hot air.

Leading global companies have already defected from the Chamber and/or the influential lobbying organization ALEC in recent years, and BHP could be next in line.

Photo: via BHP.

Tina Casey headshot

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.

Read more stories by Tina Casey