BlackRock’s Larry Fink is calling BS on Big Oil’s climate strategy

Simply selling off high-carbon assets does nothing to slow climate change.

Big Oil and gas companies are under unprecedented pressure from shareholders, courts, regulators, and the public to cut their carbon emissions to help avert climate change. Many are choosing to hone their business in on the most efficient, high-yielding assets—rigs, drilling rights, refineries, pipelines, and the like—and sell off whatever’s particularly carbon-intense.

According to the energy consulting firm Wood Mackenzie, a global firesale of at least $140 billion in oil and gas assets is ongoing. It’s driven by emissions concerns, long-term uncertainty about oil demand in a decarbonizing world, and a desire by many oil companies to pay off debt and raise cash for dividend payments and other shareholder benefits. Shell, for example, sold off nearly $1 billion in assets in Egypt in March and is reportedly considering the sale of up to $10 billion in assets in Texas.

That strategy is great for making an oil company’s balance sheet appear greener. But those assets don’t stop emitting when they trade hands from one owner to another, and a growing number of energy economists are concerned that they may instead become even harder to quash.

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