Where's the scrutiny of BP and Shell?

They say that just 90 companies are responsible for two thirds of the world's climate changing emissions since 1751. Towards the top of that list are two well known British/part British firms: BP and Shell. Between them, according to a recent report, they had their fingerprints on 5.59% of all global CO2 emissions for the 259 years to 2010. With that in mind, it's worth asking a few questions about them, and their role at the Paris climate talks.

On the whole, European oil companies haven't taken the same position as their rivals in the US. Rather than dismissing the need for action on climate change, they signed a joint statement earlier this year calling for a “sensible and effective” deal. “A new climate agreement in Paris” they say “can help strengthen the role of, and minimize risks to, the private sector in a number of ways”. One of the ways they propose is:

“Facilitating Carbon Pricing - Requiring countries choosing to employ international carbon trading to ensure the environmental integrity of these transactions can help facilitate the growth and credibility of the global carbon market, a critical tool for cost-effective emissions reduction.”

Reading coverage of the summit, Britain's oil giants generally don't feature. Shell and BP may be among history's biggest drivers of climate change, but British journalists seem largely to have developed the knack of tip-toeing round them. Most coverage is framed around how bad (or not) climate change is, whether it's really happening, what celebrity is talking about it, or general write-ups of the overall process of the conference. As we saw in our 'Climate Unspun' analysis of the UK media last week, corporations as a whole were barely mentioned in articles about climate change:

When news stories, features or comment pieces do discuss Shell and BP, it's usually to tell us that they support action.

That doesn't mean they're absent from the papers. While largely untouched by journalists, BP have taken out a series of full-page adverts in the Times, Telegraph and FT in recent days.

Their basic claim is that we need a shift from coal to gas: a convenient argument for companies with significant reserves of the latter and none of the former. It's also a dubious one. While gas is indeed the “cleanest burning” fossil fuel there's some evidence that leaks from extraction and transportation make up for any reduction in emissions from burning: methane is an extraordinarily potent greenhouse gas.

It's also a clever piece of spin. No one is seriously saying that every gas power station in the world could be shut down tomorrow. But what these companies and their friends are pushing for is investment in new gas infrastructure – the pieces of kit which will tie the country to their gas for decades to come.

Perhaps most telling of all is what the companies say when asked not about climate change, but about their future fossil fuel reserves – which make up most of the value of their shares. Here's an extract from a Reuters article on the subject from a month ago:

“Oil and gas companies have invested heavily in squeezing the maximum from existing reservoirs by using chemicals, super computers and robotics. The halving of oil prices since last June has further dampened their appetite to explore for new resources, with more than $200 billion worth of mega projects scrapped in recent months.

 

“By applying these technologies, the global proved fossil fuel resources could increase from 2.9 trillion barrels of oil equivalent (boe) to 4.8 trillion boe by 2050, nearly double the projected 2.5 trillion boe required to meet global demand until 2050," BP said.

Further down the article, they raise the subject of climate change:

“The world is however expected to reduce its reliance on fossil fuels in favour of cleaner sources of energy as governments introduce policies limiting carbon emissions in order to combat global warming.

BP's response?

"A price on carbon would advantage certain resources"

In other words, BP has technology to squeeze huge amounts of extra carbon out of the ground and into the atmosphere. This is a fact they are showing off about to one group, at the same time as showing off to another group about how much they care about climate change. Greepeace's Energy Desk has calculated their forecasts for future fossil fuel use are consistent with global temperature increases of around four degrees. The argument at the first day of the conference was whether two degrees is too high.

In this context, the company clearly doesn't see the carbon pricing it is proposing as standing in the way of its plans to burn all this extra oil. They'll happily charge a wee bit more, and customers will probably pay it. Fuel is, as micro-economists put it, remarkably "inelastic": you can hike prices, and people will still buy the stuff.

Likewise, the experience of the European Emissions Trading Scheme is that it really didn't stop the burning of fossilised sludge. It's no surprise these companies are lobbying for more emissions trading, while NGOs are demanding something much simpler: leave it in the ground.

'Read the papers, and you'd think Britain's major oil firms are zealous eco-converts, campaigning for practical solutions to climate change... Look at what they say to potential investors, and the story is pretty different.'

Read the papers and you'd think that Britain's major oil firms are zealous eco-converts, campaigning for practical solutions to climate change. Look at their adverts and you might think that they are pragmatic sorts, trying to balance difficult questions in a complex world. Look at what they are saying to potential investors, and the story is pretty different.

So why is none of this being seriously scrutinised in the British press? Newspapers merrily publish full page adverts from big companies in which they convey truth like a spinning top. They seem much less willing to challenge those lines in their adjoining articles.