How fossil fuel companies are knowingly scheming to profit from climate change

In early March 2020, New York Magazine published an excellent article the went behind the scenes of a Shell corporate conference. It's a long read, but has continued to haunt me ever since, as journalist Malcolm Harris (author of Kids These Days: Human Capital and the Making of Millennials) chats it up with oil executives who — shockingly — aren't as in denial about climate change as one might expect. Rather, in their view, they see themselves as pragmatic: they've invested all this time and energy and infrastructure into oil, so they just want to make sure they can stay on top in the inevitable shift to renewables (which they do recognize as inevitable).

So far, the oil and gas companies' calculations — that delay would make them money and that they could avoid consequences for misleading the public — have been spot on. But denial-backed delay is no longer sufficient, it seems. They're now hoping to leverage their incumbency, and fossil-fuel wealth, to lay claim to the world's clean-energy future as well. To do that, they'll have to persuade young people to forget who caused climate change in the first place, or at least to let bygones be bygones. And if they can transition their corporate profiles from fossil fuel to green energy without missing a profitable quarter, that wouldn't be a repudiation of their delay strategy; it would be a vindication.

Of course, to judge by the advertisements, the transition to renewables has already happened. British Petroleum is now a solar-energy company called BP, ExxonMobil brews giant swimming pools of cool green-algae fuel, and Shell maintains mountain canyons lined with wind turbines floating in fog. All these initiatives actually do exist, though they are a tiny fraction of each company's budget; so far, the main product of Exxon's algae program seems to be propaganda. Right now, these companies have to convince governments and their publics to let them run out the clock with fossil fuels, and they've decided the best way to do that is to appear to be an essential partner for whatever's coming next. 


In the meantime, I asked [Shell's chief economist], if Shell is serious about transition, then couldn't it voluntarily speed it up by leaving some of its wells fallow, constraining oil output and thereby driving the price relative to renewables higher, faster? Sure, it would have to take some losses in the short term, but we're talking about the future of the planet here. He dismissed the idea, telling me it's important not to artificially withhold supply, which would introduce price shocks that could turn public opinion against environmentalist policy. Besides, it would only end up sending money to the Saudis anyway.

"We're going to get as much out of [oil and gas] for as long as we can," he said.

"That's an extremely frightening thing for you to say," I said.

"It doesn't mean every drop," he said, failing to reassure me.

Shell would apparently prefer us not to think about how to reduce carbon emissions by raising the costs of fossil-fuel development. Which makes sense: No matter their green branding, fossil-fuel companies do not want their projects rendered uneconomic. Instead, they want to talk about how their new projects can be rendered economic faster. Even planned production from existing fossil-fuel infrastructure, it's been estimated, will push the planet past the Paris targets, and Shell is still "exploring" for new oil deposits to exploit.

Meanwhile, ExxonMobil—the company who, if you'll recall, is largely credited for discovering the truth about manmade climate change in the 70s, and then spent trillions of dollars in PR schemes to cover up their own research—their own internal analysts and financial models openly predict a 17% increase in carbon emissions over the next 5 years. They're planning for this, and letting it happen, despite their own research, because hey, it's profitable. In fact, they spent a lot of time and money to specifically calculate how profitable it will be. From Bloomberg:

The internal documents show for the first time that Exxon has carefully assessed the direct emissions it expects from the seven-year investment plan adopted in 2018 by Chief Executive Officer Darren Woods. A chart in the documents lists Exxon's direct emissions for 2017—122 million metric tons of CO₂ equivalent—as well as a projected figure for 2025 of 143 million tons. The additional 21 million tons is a net result of Exxon's estimate for ramping up production, selling assets and undertaking efforts to reduce pollution by deploying renewable energy and burying carbon dioxide.


Exxon often defends its growth plans by citing International Energy Agency estimates that trillions of dollars of new oil and gas investments are needed by 2040 to offset depletion from existing operations, even under a range of climate scenarios. However, experts say a reduction in global oil and production is necessary to limit warming to 1.5 degrees Celsius above pre-industrial levels.

COVID-19 has almost certainly impacted the plans of both Shell and ExxonMobil. But who knows how.

Shell Is Looking Forward [Malcolm Harris / New York Magazine]

Exxon's Plan for Surging Carbon Emissions Revealed in Leaked Documents [Kevin Crowley and Akshat Rathi / Bloomberg]

Image: Ramon FVelasquez / Wikimedia Commons (CC BY-SA 3.0)