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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Why Is Big Oil Backing The Paris Climate Agreement?

Joining the ranks of former Exxon CEO, and now Secretary of State, Rex Tillerson, the chief executive of another big U.S. energy company, ConocoPhillips, is saying that the U.S. should stay in the Paris Climate Agreement.

“It would be good for the U.S. to stay in the climate agreement,” ConocoPhillips chairman and CEO Ryan Lance told reporters on the sidelines of the CERAWeek conference in Houston, Axios reports.

While on the campaign trail, President Trump repeatedly criticized the Paris Agreement which enlisted almost every country in the world to make efforts to curb global warming. In his ‘An America First Energy Plan’ from May 2016, one of the actions he had vowed to take during the first 100 days in office was to “cancel the Paris Climate Agreement and stop all payments of U.S. tax dollars to U.N. global warming programs.”

“This agreement gives foreign bureaucrats control over how much energy we use right here in America,” Trump’s campaign pledges said.

Now, the White House’s ‘An America First Energy Plan’ does not mention the Paris accord, and although we’re halfway through the first 100 days of President Trump’s term in office, the word is that his advisers and executives are divided over that particular campaign pledge.

For ConocoPhillips and Exxon—as well the non-U.S. oil and gas heavyweights; BP, Royal Dutch Shell, Eni, Total, and Statoil—backing the Paris Agreement is not just riding the trend of increasingly environmentally-conscious businesses. Those companies with operations all over the world stand to benefit from the Paris Agreement because the nations’ efforts to cut carbon emissions will lead to transitioning from coal-fired plants to gas-fired plants. And natural gas is quite a substantial portion of all those majors’ businesses, investments and profits.

So it’s no wonder that Big Oil has pledged US$1 billion over the next ten years to fighting climate change under the Oil and Gas Climate Initiative that includes BP, CNPC, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil, and Total.

Although U.S. companies are not part of that initiative, Exxon and ConocoPhillips have identified opportunities in the global climate change actions. ConocoPhillips says that it sees opportunities and value in lower carbon emission energy in its existing business of natural gas exploration and production. Related: Oil Major BP Buys Boone Pickens’ Clean Energy Assets

On the day which the Paris Agreement entered into force, Exxon—at the time still led by Tillerson before he was tapped for Secretary of State—said:

“ExxonMobil supports the work of the Paris signatories, acknowledges the ambitious goals of this agreement and believes the company has a constructive role to play in developing solutions.”

At his confirmation hearing a couple of months later, Tillerson said that the U.S. would be better off sticking with the Paris agreement to tackle climate change.

In his first blog post on the company website, Exxon’s new chairman and CEO Darren Woods said a national revenue-neutral carbon tax would be good, and that his company was encouraged:

“The pledges made at last year’s Paris Accord create an effective framework for all countries to address rising emissions”. Of course, he singled out natural gas as one of the “powerful tools for meeting global energy demand while reducing emissions”. Related: IEA: Huge Oil Price Spike Inevitable

Regarding the White House’s policies on the Paris deal, it is said to be divided. President Trump’s senior adviser, Stephen Bannon, is pushing to back the U.S. out of the deal while Tillerson and Ivanka Trump fear that a withdrawal may damage some of America’s diplomatic relations, according to the New York Times.

According to The Wall Street Journal, Ivanka Trump and her husband, and close adviser of President Trump, Jared Kushner, have convinced the President to remove language from an upcoming executive order that would have criticized the Paris Agreement.

While it is nearly impossible to predict the White House’s future stance on the Paris climate deal, it is certain that energy companies with big exposure to natural gas exploration and production should benefit from the global efforts to switch from coal to gas in the fight against climate change.

By Tsvetana Paraskova for Oilprice.com

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  • J P DeCaen on March 12 2017 said:
    I don't recall another presidency when the president's kids played a major role in policy, but perhaps in this case it's for the better, except for the coal miners. I hope they get something to help them through a tough time. They're working class heroes for sure.
  • JHM on March 13 2017 said:
    I suspect that big oil is backing climate change initiatives only because they think they can make money on gas as a transitional fuel. But this window is narrow and closing.

    Gas is merely a bridge to batteries. The global battery market is just starting to explode. Watch developments in South Australia and Tesla's offer of grid batteries at $250/kWh.

    As quickly as battery supply can ramp up, the LNG market will be crushed. The oil industry may as well go on hating renewables because batteries will displace both oil and gas. There is no sustainable economic future for either. Too little, too late.
  • John Scior on March 13 2017 said:
    I'm sure they are paying lip service to the effort so as not to become the target of protesters or government actions to enforce a dramatic effort to reduce CO2. Ultimately, economics will determine what happens. As some of the signatories of the Kyoto protocol pulled out of that accord when it came down to a decision between stifled economic growth or standing firm on their pledges.
  • James H. Rust on March 14 2017 said:
    Remember Chesapeake Energy gave $25 million to the Sierra Club to support Beyond Coal. They then went to Beyond Oil. The environmental movement thrives on living high off donations. Oil companies have a lot of money they can waste on supporting the environmental movement. These people will turn on them and try to replace oil with solar and wind

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