Hurricane Ida Badly Damages Home of Goldman Prize Winner Sharon Lavigne and Others in Louisiana’s Cancer Alley
By Julie Dermansky and Sharon Kelly
On Sunday afternoon, Hurricane Ida made landfall as a Category 4 hurricane, making it one of the most powerful storms to strike Louisiana in recorded history. Ida made landfall on the 16th anniversary of the devastating Hurricane Katrina.
And around 10:00 p.m. that night in St. James Parish, a wind gust from Ida lifted most of the roof from the home of Sharon Lavigne. Lavigne, inside, prayed that the roof wouldn't fly away entirely, she told DeSmog Monday morning. And indeed, one portion of the roof remained, over a bedroom where the 69-year old retired special-ed teacher sheltered as Ida howled around her. Ida's sustained wind speeds at the time exceeded 100 miles per hour, National Hurricane Center reports show, with higher gusts.
After the storm passed, she emerged in the morning to find ceilings caved in and the contents of her home soaked.
"This is the worst storm I ever went through," Lavigne, who earlier this year was awarded the prestigious Goldman Prize for her environmental advocacy with community group RISE St. James, told Julie Dermansky, who covers the region for DeSmog. "My house is destroyed. I'm not sure it can be fixed."
Lavigne's home sits in a region known internationally as "Cancer Alley," due to the pollution from the large number of oil refineries, plastic manufacturing sites, and other fossil fuel infrastructure clustered in the southern Louisiana region. The Gulf Coast is also prone to hurricanes, which climate scientists say have been made more powerful and unpredictable by the changing climate.
Ida's track shows the storm's eye crossed the Mississippi to the west of New Orleans as it traveled north towards Baton Rouge. "This largely Black-populated stretch of the Mississippi River between New Orleans and Baton Rouge is lined with more than a hundred refineries and petrochemical plants,'" DeSmog has previously reported.
"It is a total disaster," Lavigne told DeSmog. "Roofs are off on many homes. The air smells horrible. Poles and trees are down everywhere and the [oil and chemical] plants around the Sunshine Bridge are all flaring." The Sunshine Bridge crosses the Mississippi River into St. James Parish and is neighbor to multiple chemical plants.
Live Photo: Entergy tower downed near Avondale. @WWLTV #HurricaneIda https://t.co/MZBQ0mqHFc— David Hammer (@David Hammer)1630348637.0
Overnight, individuals and families trapped in attics by floodwaters in nearby LaPlace, in St. John the Baptist Parish, posted cries for help on social media. This morning, the "Cajun Navy," an ad hoc flotilla of volunteers who self-organize when floods strike along the Gulf Coast, headed to LaPlace to assist with rescues. "First and foremost it will be rescues of people on roofs and attics," Jordy Bloodsworth, a member of the Louisiana Cajun Navy and Storm Patrol, told KATC News. "We're going out in boats to do water rescues first."
St. James Parish, a half-hour drive away, appears to have fared better from Ida than LaPlace — and other communities further to the south, which were battered by wind gusts that exceeded 172 miles per hour in Port Fourchon, where Ida made landfall.
The damage in southern Louisiana is widespread and it could take days to restore power in some parishes that appear to have taken an even harder hit from Ida, like Lafourche and Plaquemines.
Homes belonging to other members of RISE St. James, who have been opposing new petrochemical plants like the proposed Formosa plastics plant from being built in their already burdened region, were also damaged in Ida, according to Lavigne. She toured the area with Pastor Harry Joseph, who led a fight against the Bayou Bridge pipeline, whose construction was ultimately completed in 2019.
Lavigne and Joseph borrowed a phone from Romell Lavigne, Sharon's son, as neither has phone service at the moment. Romell, who lives nearby, has been working with other community members to remove felled trees from roads.
As of Monday morning, Lavigne said that she had yet to see any emergency vehicles, adding that she believes they may be in Laplace and New Orleans, both east of St. James. Around noon, the Beauregard Parish Sheriff's Office posted images on social media of crews headed to St. James Parish "to help with the recovery effort there that we as a community are all too familiar with."
Difficulties getting around the area were highlighted when St. James Parish officials asked residents to stay off the St. James levee, writing: "The top of the levee is the ONLY available transportation route for our emergency crews to travel. We ask residents to please remain off of the levee in order to allow for our crews to continue clearing debris, and repairing damages."
PLEASE REMAIN OFF OF THE LEVEE AT THIS TIME. The top of the levee is the ONLY available transportation route for… https://t.co/BPNZIkgFT9— St. James Parish Government (@St. James Parish Government)1630332174.0
Lavigne also discussed the lack of evacuation routes in St. James, a problem her organization has previously raised concerns over. "Our community still doesn't have more than one way in and out," she said, adding that there's still "no proper evacuation route, though we fought for it when we fought against the Bayou Bridge pipeline."
Lavigne's brother Milton, who is disabled, cannot leave his home because of a tree blocking a driveway, Lavigne said.
Ida's rapid intensification was fueled by unusually warm waters in the Gulf of Mexico. "The extra heat acted as fuel for the storm. Heat is energy, and hurricanes with more energy have faster wind speeds and larger storm surges. As the Earth heats up, rapidly intensifying major hurricanes like Ida are more likely to occur, scientists say," NPR reported. "The trend is particularly apparent for storms in the Atlantic Ocean, which includes storms like Ida that travel over the warm, shallow water of the Caribbean sea. A 2019 study found that hurricanes that form in the Atlantic are more likely to get very powerful very quickly."
A significant chunk of the United State's oil and gas infrastructure is located along the Gulf Coast, where hurricanes are prone to strike.
"This is another reason Formosa must not be built," Lavigne said, referring to a proposed multi-billion-dollar plastics plant that she has organized against via RISE St. James. That plant, if built, would add 13 million tons of planet-warming, hurricane-intensifying greenhouse gases a year to the atmosphere, in addition to toxic air pollutants and carcinogens. United Nations human rights experts have condemned further petrochemical development in this largely Black region as "environmental racism."
Southern Louisiana has also been hard-hit by the Covid-19 pandemic, with St. John the Baptist Parish recording the nation's highest rate of Covid-19 deaths last spring. As Ida approached, more than 2,600 people were hospitalized with the virus in the state — though St. John the Baptist now has one of the state's highest vaccination rates.
"The River Parishes is a textbook example of not a pandemic but a syndemic, when two or more concurrent epidemics or community issues come together within the same population," Gary C. Watson, Jr., a media and business consultant affiliated with RISE St. James, told DeSmog, referring to the parishes surrounding the Mississippi River.
But for the moment, recovery from Ida presents its own demands in St. James and across southern Louisiana.
"It is really bad here," Lavigne said, "and we are going to need a lot of help."
Reposted with permission from DeSmog.
- St. James Parish Activists Win 'Important Victory for Environmental ... ›
- 175 Groups Urge Banks Not to Fund Massive 'Cancer Alley ... ›
- 6 'Green Nobel Prize' Recipients Announced - EcoWatch ›
- Plastics Plant Will Bulldoze Over Black History in 'Cancer Alley ... ›
- Lawsuit Appeals Permit for Formosa Plastics to Build in Louisiana's ... ›
- Heat Threatens Louisiana Residents Without Power Following Ida Destruction, Entergy Failures ›
- 8 Killed as Hurricane Ida Remnants Pummel New York, Northeast ›
By Gaia Lamperti
Supermarkets are failing to cut their emissions and reduce the climate impact of their meat and dairy products, according to a report by environmental charity Feedback, with the German retailer Lidl judged to be the worst performer.
Using a range of nearly 40 indicators, such as labelling and sourcing policies, the 2021 Meat and Climate Scorecard assessed the top 10 UK supermarkets that make up over 90 percent of the country's groceries market share.
The three lowest-ranking were Lidl, Iceland and Morrisons, with Waitrose, Sainsbury's and M&S coming in the middle of the table. Co-op, the best-performing retailer, nevertheless only scored 45 percent in the analysis.
The research was based on publicly available information, questionnaires compiled by the retailers and in-store visits of the stores.
Feedback, which calls for a greener food system, believes that retailers should take responsibility for the food environments they create and the climate impact of meat and dairy over-consumption.
"Our ambitious goal with this report is for all the retailers to commit to halving their meat and dairy sales," Jessica Sinclair Taylor, Head of Policy and Media at the charity, said.
"But obviously, there's a lot of intermediate steps along the way to that long-term goal. So, in the short-term, we'd like them to be properly measuring Scope 3 emissions [indirect emissions that occur in a company's value chain] of the products that they sell," she added.
This year's scorecard revealed that many supermarkets have improved their environmental policies since the last assessment in 2019 when Feedback's inaugural scorecard report was published. However, the majority of retailers are still failing to translate this into action, the report argues.
"It's all very well to switch to an electric vehicle in their supply chain, but what about the emissions of what they're selling?", Taylor said.
According to the charity, retailers still do not have consistent climate targets covering the emissions of the products they sell. The only retailer that committed to addressing this, Co-op, nevertheless only implemented the measure for own-label products.
The report also found that most supermarkets are still using labels on meat products that customers may find misleading, that they are not transparent about the harm these products cause to public health and the environment, while options such as organic, or even free-range, are often unavailable.
"Retailers tend to like the idea that they are just responding to demand and part of what we are doing with the Scorecard is demonstrating to them that they are very much shaping demand," Taylor concluded.
Responding to the report, Lidl said it had been working hard to establish ambitious but realistic climate change commitments, which will be published at the end of the fiscal year.
"We remain committed to meeting the needs of our customers while ensuring our business operations remain good for the planet," a Lidl GB spokesperson said.
"We welcome Feedback's recommendations and are already working towards all of the points identified. We are confident of improving our position in the future and look forward to sharing our developments in due course," the spokesperson added.
Iceland said it was aware of the findings outlined in the report and remains committed to making progress in this area. "Specifically by incorporating science-based targets into our plans, reporting on Scope 3 emissions and our pledge to become net-zero by 2040," an Iceland spokesperson explained.
Morrisons did not respond to a request for comment.
Feedback is working on scorecard reports for retailers in other European countries, including the Netherlands, Germany and Spain.
Reposted with permission from DeSmog.
Through net metering programs, homeowners who have installed solar energy systems can get utility credits for any electricity their panels generate during the day that isn't used to power home systems. These credits can be "cashed in" to offset the cost of any grid electricity used at night.
Where net metering is available, solar panels have a shorter payback period and yield a higher return on investment. Without this benefit, you only save on power bills when using solar energy directly, and surplus generation is lost unless you store it in a solar battery. However, net metering gives you the option of selling any excess electricity that is not consumed within your home.
Generally, you will see more home solar systems in places with favorable net metering laws. With this benefit, going solar becomes an attractive investment even for properties with minimal daytime consumption. Homeowners can turn their roofs into miniature power plants during the day, and that generation is subtracted from their nighttime consumption.
What Is Net Metering?
Net metering is a billing arrangement in which surplus energy production from solar panels is tracked by your electricity provider and subtracted from your monthly utility bill. When your solar power system produces more kilowatt-hours of electricity than your home is consuming, the excess generation is fed back into the grid.
For homeowners with solar panels, the benefits of net metering include higher monthly savings and a shorter payback period. Utility companies also benefit, since the excess solar electricity can be supplied to other buildings on the same electric grid.
If a power grid relies on fossil fuels, net metering also increases the environmental benefits of solar power. Even if a building does not have an adequate area for rooftop solar panels, it can reduce its emissions by using the surplus clean energy from other properties.
How Net Metering Works
There are two general ways net metering programs work:
- The surplus energy produced by your solar panels is measured by your utility company, and a credit is posted to your account that can be applied to future power bills.
- The surplus energy produced by your solar panels is measured by your home's electricity meter. Modern power meters can measure electricity flow in both directions, so they tick up when you pull from the grid at night and count down when your solar panels are producing an excess amount of electricity.
In either scenario, at the end of the billing period, you will only pay for your net consumption — the difference between total consumption and generation. This is where the term "net metering" comes from.
How Does Net Metering Affect Your Utility Bill?
Net metering makes solar power systems more valuable for homeowners, as you can "sell" any extra energy production to your utility company. However, it's important to understand how charges and credits are managed:
- You can earn credits for your surplus electricity, but utility companies will not cut you a check for the power you provide. Instead, they will subtract the credits from your power bills.
- If your net metering credit during the billing period is higher than your consumption, the difference is rolled over to the next month.
- Some power companies will roll over your credit indefinitely, but many have a yearly expiration date that resets your credit balance.
With all of this in mind, it is possible to reduce your annual electricity cost to zero. You can accumulate credit with surplus generation during the sunny summer months, and use it during winter when solar generation decreases.
You will achieve the best results when your solar power system has just the right capacity to cover your annual home consumption. Oversizing your solar array is not recommended, as you will simply accumulate a large unused credit each year. In other words, you cannot overproduce and charge your power company each month.
Some power companies will let you pick the expiration date of your annual net metering credits. If you have this option, it's wise to set the date after winter has ended. This way, you can use all the renewable energy credits you accumulated during the summer.
Is Net Metering Available Near You?
Net metering offers a valuable incentive for homeowners to switch to solar power, but these types of programs are not available everywhere. Net metering laws can change depending on where you live.
In the U.S., there are mandatory net metering laws in 38 states and Washington, D.C. Most states without a mandate have power companies that voluntarily offer the benefit in their service areas. South Dakota and Tennessee are the only two states with no version of net metering or similar programs.
If net metering is available in your area, you will be credited for your surplus energy in one of two ways:
- Net metering at retail price: You get full credit for each kilowatt-hour sent to the grid. For example, if you're charged 16 cents per kWh consumed, you'll get a credit of 16 cents per kWh exported. This type of net metering is required by law in 29 states.
- Net metering at a reduced feed-in tariff: Surplus electricity sent to the grid is credited at a lower rate. For example, you may be charged 16 cents per kWh for consumption but paid 10 cents per kWh exported. Feed-in tariffs and other alternative programs are used in 17 of the states where retail-rate net metering is not mandatory.
Note: This is just a simplified example — the exact kWh retail price and solar feed-in tariff will depend on your electricity plan.
The Database of State Incentives for Renewables & Efficiency (DSIRE) is an excellent resource if you want to learn more about net metering and other solar power incentives in your state. You can also look for information about solar incentives by visiting the official websites of your state government and utility company.
Other Financial Incentives for Going Solar
Net metering policies are one of the most effective incentives for solar power. However, there are other financial incentives that can be combined with net metering to improve your ROI:
- The federal solar tax credit lets you claim 26% of your solar installation costs as a tax deduction. For example, if your solar installation had a cost of $10,000, you can claim $2,600 on your next tax declaration. This benefit is available everywhere in the U.S.
- State tax credits may also be available depending on where you live, and they can be claimed in addition to the federal incentive.
- Solar rebates are offered by some state governments and utility companies. These are upfront cash incentives subtracted directly from the cost of your solar PV system.
In addition to seeking out solar incentives available to you, you should compare quotes from multiple installers before signing a solar contract. This will ensure you're getting the best deal available and help you avoid overpriced offers and underpriced, low-quality installations. You can start getting quotes from top solar companies near you by filling out the 30-second form below.
Frequently Asked Questions: Solar Net Metering
Why is net metering bad?
When managed correctly, net metering is beneficial for electricity consumers and power companies. There have been cases in which power grids lack the capacity to handle large amounts of power coming from homes and businesses. However, this is an infrastructure issue, not a negative aspect of net metering itself.
In places with a high percentage of homes and businesses using solar panels, surplus generation on sunny days can saturate the grid. This can be managed by modernizing the grid to handle distributed solar power more effectively with load management and energy storage systems.
How does net metering work?
With net metering, any electricity your solar panels produce that isn't used to power your home is fed into your local power grid. Your utility company will pay you for this power production through credits that can be applied to your monthly energy bills.
Can you make money net metering?
You can reduce your power bills with net metering, using surplus solar generation to compensate for your consumption when you can't generate solar power at night and on cloudy days. However, most power companies will not pay you for surplus production once your power bill has dropped to $0. Normally, that credit will be rolled over, to be used in months where your solar panels are less productive.
On very rare occasions, you may be paid for the accumulated balance over a year. However, this benefit is offered by very few electric companies and is subject to limitations.
By Sharon Kelly
The Dow Chemical Company ranks second, the report finds, with the Chinese state-owned company Sinopec coming in third. Indorama Ventures — a Thai company that entered the plastics market in 1995 — and Saudi Aramco, owned by the Saudi Arabian government, round out the top five.
Funding for single-use plastic production comes from major banks and from institutional asset managers. The UK-based Barclays and HSBC, and Bank of America are the top three lenders to single-use plastic projects, the new report finds. All three of the most heavily invested asset managers named by the report — Vanguard Group, BlackRock, and Capital Group — are U.S.-based.
"This is the first-time the financial and material flows of single-use plastic production have been mapped globally and traced back to their source," said Toby Gardner, a Stockholm Environment Institute senior research fellow, who contributed to the report, titled The Plastic Waste Makers Index.
The report is also the first to rank companies by their contributions to the single-use plastic crisis, listing the corporations and other financiers it says are most responsible for plastic pollution — with major implications for climate change.
"The trajectories of the climate crisis and the plastic waste crisis are strikingly similar and increasingly intertwined," Al Gore, the former U.S. vice president, wrote in the report's foreword. "Tracing the root causes of the plastic waste crisis empowers us to help solve it."
The world of plastic production is concentrated in fewer hands than the world of plastic packaging, the report's authors found. The top twenty brands in the plastic packaging world — think Coca Cola or Pepsi, for example — handle about 10 percent of global plastic waste, report author Dominic Charles told DeSmog. In contrast, the top 20 producers of plastic polymers — the building blocks of plastics — handle over half of the waste generated.
"Which I think was really quite staggering," Charles, director of Finance & Transparency at Minderoo Foundation's Sea The Future program, told DeSmog. "It means that just a handful of companies really do have the fate of the world's single-use plastic waste in their hands."
Meanwhile, the report suggests that public policy responses to the threats posed by plastic pollution have focused further along the supply chain, where things become more fragmented.
"Government policies, where they exist, tend to focus on the vast number of companies that sell finished plastic products," the report finds. "Relatively little attention has been paid to the smaller number of businesses at the base of the supply chain that make 'polymers' — the building blocks of all plastics — almost exclusively from fossil fuels."
While there are about 300 polymer producers currently operating worldwide, just three companies — ExxonMobil, Dow, and Sinopec — combined are responsible for roughly one out of every six pounds of single-use plastic waste, the report concludes.
In 2019, for example, more than 130 million metric tons of plastic was used just once and then discarded. ExxonMobil, the report concludes, was responsible for creating 5.9 million tons of that single-use plastic waste in 2019, with Dow right behind it, generating 5.6 million tons that year.
Neither ExxonMobil nor Dow responded immediately to a request for comment.
Meanwhile, 20 of the world's largest banks lent nearly $30 billion that was used for the production of new single-use plastics, the report finds. That funding represents about 60 percent of the commercial finance that funds single-use plastics. An additional $10 billion in investment in new single-use plastics has come from 20 institutional asset managers, like Vanguard and BlackRock.
"Through our Investment Stewardship program, Vanguard regularly engages with companies on issues that are financially material to their long-term value and sustainability, including climate issues and environmental matters," Vanguard spokesperson Alyssa Thornton said in an email to DeSmog. "We expect company boards to oversee climate and environmental risks and provide investors with clear disclosures of their risk oversight and decision-making processes. Importantly, we do not dictate company strategy, or operational or financial decisions; rather, we hold company board's responsible for being aware of such risks and opportunities as part of a foundation for making the most sustainable long-term decisions."
Barclays did not immediately respond to a request for comment.
Virtually all single-use plastic comes from fossil-fuel based feedstocks, the report adds.
"One of the key findings of the report is that single-use plastics today is 98 percent fossil fuel-based," Charles told DeSmog. "And that in itself is really, we say, the source of the plastic waste crisis. And that's because if you're only making new plastics from new fossil fuels, you're taking away the commercial incentive, you're undermining the commercial incentive to collect this plastic and to turn it into recycled plastic products."
The report grades plastic manufacturers based on their preparation to transition away from fossil fuels and towards recycling — and found that most of the largest producers not only have made very little progress in that direction to date, they haven't even set targets that would push them towards a "circular" model involving recycling.
"Over 50 of these companies received an 'E' grade — the lowest possible — when assessed for circularity, indicating a complete lack of policies, commitments, or targets," the report found. "A further 26 companies, including ExxonMobil and Taiwan's Formosa Plastics Corporation, received a 'D-' due to their lack of clear targets/timelines."
In fact, fossil fuel producers appear to be counting on that failure to move towards recycling. "Two of the biggest markets for fossil fuel companies — electricity generation and transportation — are undergoing rapid decarbonization, and it is no coincidence that fossil fuel companies are now scrambling to massively expand their third market — petrochemicals — three-quarters of which is the production of plastic," Gore wrote. "They see it as a potential life raft to help them stay afloat, and they're telling investors that there's lots of money to be made in ramping up the amount of plastic in the world."
In a statement on the report, the American Chemistry Council pointed to the use of plastics in products like solar panels and wind turbines to highlight the role that plastics — though not single-use plastics — play in renewable energy. "The world needs plastic to live more sustainably, and America's plastic makers are leading the development of solutions to end plastic waste," the Council said. "We're innovating and investing in efforts to create a more circular economy, where used plastics are systematically remanufactured to make new plastics and other products. In the last three years, the private sector has announced $5.5 billion in U.S. investments to dramatically modernize plastics recycling."
Meanwhile, the plastics industry remains on track to continue rapidly increasing the amount of new plastic it produces each year, meaning more fossil fuel use — even while other industries are seeking to trim or eliminate their reliance on fossil fuels.
"Our numbers suggest a 30 percent increase in capacity compared to 2019," Charles told DeSmog. "Now that is not out of line with the historical rate of growth, it's about 5 percent per year. But if we are to see 5 percent growth in fossil fuel-based, that is a real threat towards the growth of circular plastics and recycling. So I think that's a real cause for concern."
Marine debris collected on Midway Atoll. Holly Richards, U.S. Fish and Wildlife Service
As of 2019, plastic producers had created 8.3 billion metric tons of plastic — and 91 percent of it was never recycled, according to one peer-reviewed study. Even from the start, a NPR and PBS Frontline investigation found, industry insiders were skeptical that recycled plastic could compete against new production, with one industry insider warning in a speech — in 1974 — that "There is serious doubt that [recycling plastic] can ever be made viable on an economic basis."
So where does the money for all this come from?
The financing of single-use plastics is complex, involving not only lending and investment by Wall Street fund managers and big banks, but also privately held companies. The report's list of the top 10 equity owners of polymer producers includes not only state actors and massive asset managers like BlackRock but also private individuals like James Arthur Ratcliffe — co-founder and majority owner of INEOS, a UK-based petrochemical company.
"Transitioning away from the take-make-waste model of single-use plastics will take more than corporate leadership and 'enlightened' capital markets: it will require immense political will," the report says. "This is underscored by the high degree of state ownership in these polymer producers — an estimated 30 percent of the sector, by value, is state-owned, with Saudi Arabia, China, and the United Arab Emirates the top three."
The report calls not only for more disclosures from companies and financiers about their ties to plastic production, it also calls for global action to respond to the plastic pollution crisis — starting with a focus on the companies most responsible.
"A Montreal Protocol or Paris Agreement-style treaty may be the only way to bring an end to plastic pollution worldwide," the report says. "The treaty must address the problem at its source, with targets for the phasing out of fossil-fuel-based polymers and encouraging the development of a circular plastics economy."
That's in part because the plastic waste crisis and the climate crisis share one other thing in common — their impacts are global in scope.
"The plastification of our oceans and the warming of our planet are amongst the greatest threats humanity and nature have ever confronted," Dr. Andrew Forrest, chairman and founder of the Minderoo Foundation, said in a statement accompanying the report. "And we must act now."
Reposted with permission from DeSmog.
- Spare Yourself the Guilt Trip This Earth Day—It's Companies That ... ›
- U.S. Leads the World in Plastic Waste, New Study Finds - EcoWatch ›
- Fossil Fuel Industry Looks to Profit With Plastics - EcoWatch ›
- The Myth About Recycling Plastic? It Works - EcoWatch ›
By Sharon Kelly
What's the single word that fossil fuel giant ExxonMobil's flagship environmental reports to investors and the public tie most closely to climate change and global warming?
According to newly published research from Harvard science historian Naomi Oreskes and Harvard research associate Geoffrey Supran, it's a simple four-letter word, one that carries overtones not only of danger, but also — crucially — of uncertainty: risk.
Oreskes and Supran argue in the peer-reviewed study published in the journal One Earth, that by repeating that word over and over as it discusses climate change ExxonMobil continues to connect climate change to uncertainty, even in its most carefully worded and most scrutinized discussions of the topic.
That tiny word is one sign of a massive change underway in how fossil fuel companies talk about climate change in places where it's no longer considered credible to contest climate science. Instead, Oreskes and Supran write, ExxonMobil's statements subtly shift responsibility for climate change onto the shoulders of consumers, while avoiding the need to describe in detail the risks that are posed by climate change.
And that, for the record, is a lot to gloss over — not just in terms of what scientists predict about the future, but in terms of what climate change has already played a role in bringing about. Last year, for example, tied with 2016 as the "warmest" year on record, according to NASA — 2020 brought a brutal drumbeat of climate-linked calamities, including a record-obliterating wildfire season on the West Coast that memorably turned skies orange and red and an extraordinarily intense Atlantic hurricane season.
The way that ExxonMobil talks about climate change, the paper suggests, lets the company thread a very specific rhetorical needle, communicating two ideas that fundamentally benefit their interests. "On the one hand, 'risk' rhetoric is weak enough to allow the company to maintain a position on climate science that is ambiguous, flexible, and unalarming," the researchers write. "On the other, it is strong enough — and prominent enough, in [New York Times] advertorials and elsewhere — that ExxonMobil may claim that the public has been well informed about [anthropogenic global warming]."
And if that approach feels a little familiar, maybe that's because it's very similar to the tactics used by another industry in the past: Big Tobacco.
"Akin to early, tepidly worded warning labels on cigarette packages, ExxonMobil's advertorials in America's newspaper of record help establish this claim, sometimes explicitly: 'Most people acknowledge that human-induced climate change is a long-term risk,' a 2001 advertorial states (emphases added)," the paper continues. "'The risk of climate change and its potential impacts on society and the ecosystem are widely recognized,' says another the following year."
And that's just one example of the ways that ExxonMobil's favored ideas about climate change — ideas like "we are all to blame" or "society must inevitably rely on fossil fuels for the foreseeable future" — can become embedded in conventional wisdom and creep into how people think and talk about climate change, the paper argues.
While the new paper is hardly the first to draw parallels between the fossil fuel and tobacco industries, what sets it apart is how the research was done.
"Our analysis is the first computational study illustrating how the fossil fuel industry has encouraged and embodied AGW [anthropogenic global warming] narratives fixated on individual responsibility," the paper says. The study used automated methods to analyze 180 ExxonMobil documents, 32 previously published internal company documents, and 76 New York Times "advertorials" where the company took positions on climate change. The authors believe that these methods of efficiently reviewing a large number of company records could prove useful later in litigation, where larger batches of documents may need review.
The number of climate liability lawsuits worldwide and in the U.S. continues to grow. A January 2021 United Nations report tallied 1,200 cases in the U.S. and 350 other lawsuits in nearly 40 other jurisdictions worldwide — nearly double the number of lawsuits underway three years ago by the report authors' count. Not all of those cases involve ExxonMobil — but some of the highest profile lawsuits include those filed by state attorneys general and state and local governments alleging that the company misled investors or consumers or others.
Supran and Oreskes have both assisted with legal briefs or served as expert witnesses in climate liability cases, but in an email to DeSmog, Supran noted that virtually all of that work has been done pro bono (with the sole exception that Oreskes once billed 3.5 hours for her work reviewing the historical accuracy of allegations in one 2017 case). Supran called their work and testimony in climate liability cases "a logical application of our knowledge and expertise."
ExxonMobil did not respond to a request for comment about their study from DeSmog.
As it has become less credible to contest the legitimacy of climate science, the paper notes, the company has shifted its rhetoric on climate to focus on "risk."
"In ExxonMobil Corp's 2005 Corporate Citizenship Report, for instance, which extensively questions whether AGW is human caused and serious, a member of the public [is quoted asking]: 'Why won't ExxonMobil recognize that climate change is real…?'" Oreskes and Supran write. "The company replies: 'ExxonMobil recognizes the risk of climate change and its potential impact' (emphases added)."
That subtle shift lets ExxonMobil "inject uncertainty" into conversations about climate change, the paper continues, "even while superficially appearing not to."
"We have also observed that, starting in the mid-2000s, ExxonMobil's statements of explicit doubt about climate science and its implications (for example, that 'there does not appear to be a consensus among scientists about the effect of fossil fuel use on climate') gave way to implicit acknowledgments couched in ambiguous statements about climate 'risk' (such as discussion of lower-carbon fuels for 'addressing the risks posed by rising greenhouse gas emissions,' without mention of [anthropogenic global warming])," the paper reports.
It's also a way of talking that also lets ExxonMobil leave out any description of what, exactly, is being put at risk, the paper notes.
The company's public messaging pits clear-cut descriptions of the benefits of using fossil fuels against the risks of climate change — but while it offers examples of the ways people find fossil fuels useful, ExxonMobil is a lot more vague about what, exactly, the risks associated with climate change are, the paper argues.
That's not for a lack of available scientific data. "Today, we are at 1.2 degrees of warming and already witnessing unprecedented climate extremes and volatility in every region and on every continent," U.N. Secretary General António Guterres said in a December 2020 address. "The science is crystal clear: to limit temperature rise to 1.5-degrees Celsius above pre-industrial levels, the world needs to decrease fossil fuel production by roughly 6 per cent every year between now and 2030."
The biggest remaining questions about climate change don't concern the ways that our lives will be increasingly disrupted by extreme weather, wildfires, rising seas and the like. There's a strong body of scientific evidence that lets scientists make good predictions about what happens when we collectively burn fossil fuels at different rates. And a peer-reviewed study published last year in the journal Geophysical Research found that climate models dating back to the 1970s through 2007 have proved remarkably accurate
The biggest open questions are about policy and products, not about what the science shows.
The real source of uncertainty, in other words, is how long we will continue doing the things that cause climate change.
Polling shows that Americans' understandings of climate science have shifted dramatically in recent years. In 2014, NBC News recently reported, less than half of Americans polled believed that climate change was caused by human activity. Polls from 2020, however, show that now 57 percent of Americans cite human activity as causing climate change, a jump of roughly ten percent.
But there may still be times and places where not only is discussion of risk familiar and habitually framed in terms of risk management, but also where ExxonMobil's framing might find a particularly receptive audience.
Asked by DeSmog, Supran said that investors may be particularly vulnerable to what he called ExxonMobil's "fossil fuel savior" framing.
"Within this frame, the company is an innocent supplier, simply giving consumers what they demand. That is, ExxonMobil are the good guys who we should trust to address the climate risks that we, the public, brought upon ourselves," he said. "It's also worth noting that these modern forms of propaganda are increasingly subtle and insidious, and so being exposed to them ad nauseam, as shareholders are, could make them more vulnerable to this 'discursive grooming'."
Going forward, the new paper predicts that companies like ExxonMobil may continue to rely on the strategies developed by the tobacco industry.
"In their public relations messaging, industry asserts smokers' rights as individuals who are at liberty to smoke," the paper says. "In the context of litigation, industry asserts that those who choose to smoke are solely to blame for their injuries."
"ExxonMobil's framing is reminiscent of the tobacco industry's effort 'to diminish its own responsibility (and culpability) by casting itself as a kind of neutral innocent, buffeted by the forces of consumer demand,'" it continues. "It is widely recognized that the tobacco industry used, and continues to use, narrative frames of personal responsibility — often marketed as 'freedom of choice' — to combat public criticism, influence policy debates, and defend against litigation and regulation."
Reposted with permission from DeSmog.
- Climate Polluters Are Greenwashing Sports Sponsorships - EcoWatch ›
- Massachusetts Sues ExxonMobil For Climate Disinformation ... ›
- DC and Minnesota Sue Fossil Fuel Giants for Misleading Public on ... ›
By Rich Collett-White
Facebook is "fuelling climate misinformation" through its failure to get to grips with misleading content, according to a new report that calls on companies to boycott the platform until significant action is taken.
Campaign group Stop Funding Heat, which produced the report, warns that the problem is likely to escalate in the coming months as the next major UN climate summit, COP26, approaches and wants to see action taken against "repeat offenders."
The social media giant recently announced its operations were now running on 100 percent renewable energy and it had reached "net zero" emissions. But the new report argues this counts for far less than the role Facebook plays in allowing climate misinformation to spread on its platform.
Bringing together existing research on the issue, the report calls on the company to incorporate climate misinformation into its policies governing use of the social media platform, which do not make explicit mention of climate change currently.
Lead Researcher Sean Buchan told DeSmog: "This year sees the most important UN climate summit since the Paris Agreement in 2015. Important events like this have been derailed by disinformation campaigns before — as seen with "climategate" in 2009 and the recent UN Compact for Migration. Facebook needs to take action before misinformation escalates on its platform at this crucial time."
"People should certainly be free to say and post what they want, but freedom of speech does not equate to freedom of reach. Facebook has control of how much it spreads harmful content and our recommendations all focus on reduction, not censorship. The exception is paid adverts, because we firmly believe that no organization, Facebook included, should directly receive money to spread climate misinformation," he added.
Last year, DeSmog revealed a Facebook page called Eco Central, linked to a number of pro-Brexit Conservative MPs, had been running paid adverts claiming climate change was a "hoax."
Stop Funding Heat, a spin-off from the Stop Funding Hate campaign, which aims to pressure companies into pulling its adverts from papers spreading "hate and division," says there has been a disproportionately small amount of attention paid to misleading climate-related content on the platform, compared with other forms of "false news" — Facebook's term for misinformation.
A petition has been launched based on the report calling on the platform to ban climate denialist pages from running paid adverts, close "fact-checking loopholes" whereby politicians are exempt from climate-related fact-checks, and open up its internal research on climate misinformation to researchers and journalists.
The report also argues that efforts to tackle the problem so far by Facebook, the world's largest social media company, are "insufficient". It argues that despite the use of third-party fact-checkers to add labels to misleading content and the launch of a "Climate Science Information Centre," people exposed to climate misinformation are not always guided to a relevant fact-check.
When the center was launched last year, Facebook's Vice President of Global Affairs and former UK Deputy Prime Minister Nick Clegg said the company only removed content when there was an "obvious link to immediate and impending real world harm," which did not apply to climate change.
Facebook has hit back at the criticism, however, pointing to the work it has already done to tackle the problem.
Speaking to DeSmog, a company spokesperson said:
"We combat climate change misinformation by connecting more than 100,000 people every day to reliable information from leading organizations through our Climate Science Information Center and working with a global network of independent fact-checking partners to review and rate content."
"When they rate this content as false, we add a warning label and reduce its distribution so fewer people see it. We also take action against Pages, Groups, and accounts that continue to share false claims about climate science."
Facebook also said its own analysis had found that misinformation makes up a small proportion of the overall content about climate change on its platforms and that it did not allow adverts rated false by its fact-checkers.
It rejected a claim in the report that its "machine-learning" models do not help identify new forms of climate misinformation for its fact-checking partners to review.
Rich Collett-White is Deputy Editor of DeSmog. He joined the organisation in December 2018 as a UK researcher and reporter, having previously worked in communications for the climate charity Operation Noah.
Reposted with permission from DeSmog.
By Rich Collett-White and Rachel Sherrington
Fossil fuel companies could face legal challenges over their misleading advertising, after a DeSmog investigation uncovered the extent of their "greenwashing."
Environmental lawyers ClientEarth have put companies on notice with the publication of the Greenwashing Files. The analyses, which use DeSmog's research, show how adverts of major fossil fuel companies and energy producers continue to overemphasize their green credentials, giving the public a misleading impression of their businesses.
DeSmog analyzed the advertising output of Aramco, Chevron, Drax, Equinor, ExxonMobil, Ineos, RWE, Shell and Total, and compared this with the reality of the companies' current and future business activities.
ClientEarth submitted a complaint against BP's advertising in 2019, before the company decided to withdraw its "Possibilities Everywhere" campaign. The lawyers say other fossil fuel companies could face similar challenges if they mislead the public through their advertising. The group is calling for tobacco-style advertising bans and health warnings to counter fossil fuel companies' "deceptive" marketing.
DeSmog's investigation found messaging that touts companies' climate pledges without being transparent about their large emissions contributions is widespread across advertising campaigns and social media promotions.
The adverts regularly highlight the companies' preferred solutions to climate change — from carbon capture and storage, to experimental algae biofuels, and investment in renewable energy sources — without being open about the small percentage of overall investment allocated to these technologies, nor their various limitations.
The Greenwashing Files lay bare the contrast between the public image these adverts create, and the reality of the fossil fuel companies' activities.
All companies featured in this article were contacted for comment.
ExxonMobil – 'Powering Progress'
"We're working on ways to provide energy while addressing the risks of climate change, producing clean-burning natural gas to reduce emissions from power plants, capturing CO2 before it reaches the atmosphere, and exploring unexpected energy sources like biofuels made from algae," a reassuring voice tells us in Exxon's "Powering Progress" advert – one of several released in recent years that present the US oil giant as a leader in green technologies.
But while the ad shows Exxon scientists hard at work developing "algae farms" and technology designed to suck carbon dioxide from the air, its business activities tell a different story.
Exxon is increasingly an outlier among fossil fuel companies and other major emitters, having refused to set an absolute emissions reduction target, opting instead for gradual "carbon intensity" reductions which still allow for overall emissions to increase. It has no plans to cut oil and gas production, which energy analysts say is urgently needed to meet the goals of the Paris Agreement.
While Exxon remains responsible for a significant portion of global emissions – with documents in 2019 revealing a total annual output roughly equivalent to that of Canada – its spending on clean energies has been a tiny fraction of its investments, with just 0.2 percent of its investment in new projects going to low carbon sources between 2010 and 2018.
And while "Powering Progress" and other ads put Exxon's investments in algae biofuels at the fore, it has spent just $300 million on the technology in a decade, compared with yearly capital investment of around $20 billion. Experts doubt whether the technology will ever be commercially viable or usable at scale.
RWE – 'We are the new RWE'
A video by German energy giant RWE takes the viewer through landmark inventions that have spurred on human civilisation since the industrial revolution – the light bulb, the radio, mass transport – before arriving at the present day. "Every time has its energy," the ad tells us, adding that "times are changing. Society is changing. Companies are changing, and we are changing too."
The images cut to wind turbines, and the forces of nature that are powering what we are told is today's "renewable age." The company positions itself at the heart of this transition, telling the viewer it is "focusing on renewable energies and storage, for a sustainable world," and that it is providing "clean, reliable and affordable" energy as part of its transition to "the new RWE."
The campaign accompanies pledges to become "carbon neutral" by 2040 and oversee a significant expansion into wind and solar energy.
But the growth of RWE's low-carbon activities has not been matched by an exit from fossil fuels. RWE remains the largest emitter in Europe, according to a recent study by Greenpeace, and its three major lignite coal-fired power stations all feature in the EU's top five highest-emitting plants. Under current plans, it will continue to generate coal-fired electricity until the end of 2038, almost a decade after the deadline recommended for OECD countries by climate experts, at the same time as expanding its already significant fossil gas business.
Despite its claims to focus on clean energy, 80 percent of the company's energy still comes from non-renewable sources, mostly highly-polluting brown coal, hard coal and gas. The company also counts controversial and carbon-intensive biomass amongst its "renewable" energy sources despite warnings from scientists over its use.
Drax – 'Beyond Coal'
Drax, another energy company that now relies heavily on biomass and operates the UK's largest power station in North Yorkshire, has worked hard to bolster its green credentials in recent years, positioning itself as an ally in the fight against climate change.
Last year, it released an advert celebrating the company's shift away from coal-fired energy production, which it completed in March. Set to an uplifting soundtrack, the video calls the move a "major step towards Drax's ambition to become carbon negative by 2030," while touting a new "Zero Carbon Skills Taskforce" to ensure the surrounding area "isn't defined by its past, but by its future."
A 2020 year-in-review video meanwhile describes Drax as "among Europe's lowest carbon intensity power generators," producing "77 percent renewable electricity."
But the company's claims about the climate-friendliness of biomass, which has now taken over from coal as the principal source of energy at its power station thanks to generous government subsidies, have been widely disputed. Burning wood pellets has been found to be more carbon-intensive than fossil fuels in most circumstances, while experts doubt that trees planted in their place can re-absorb the carbon dioxide emitted, on a meaningful timescale.
Carbon capture and storage – another key plank of Drax's low-carbon strategy – remains uneconomical at scale, with the company's own use of the technology still in the pilot phase.
In response to questions from DeSmog, Drax said emissions from biomass energy are "already accounted for in the land-use sector and therefore considered carbon neutral at the point of combustion," in line with "established global best practice" set out by the UN IPCC.
It also said biomass should be considered renewable "because the forests we source from are growing and storing more carbon" and pointed to its plans for a bioenergy with carbon capture and storage (BECCS) unit by 2027, "creating tens of thousands of jobs" and "permanently removing millions of tonnes of carbon dioxide from the atmosphere each year."
Aramco – 'The Moment is Now'
The Saudi Arabian state-owned oil and gas giant, Aramco, became the most valuable listed company in history when it floated on the stock market at the end of 2019. But the fossil fuel behemoth is at pains to assure viewers it is concerned about more than just its bottom line.
In an advert titled "The Moment is Now," an Aramco employee tells a lecture theatre full of colleagues that "as we open up to the world, we know more than ever before that we must continue towards a sustainable future."
"We value the natural resources we discover but never forget it is our human energy that drives us to create a better world," she says to the audience, who reward her presentation with a standing ovation.
Elsewhere, the company insists it is driven by a "commitment to preserving the environment because protecting our planet is one of our most important values."
That's despite the company being the world's largest corporate greenhouse gas emitter, responsible for an estimated four percent of all global emissions since 1965.
Aramco's oil and gas reserves total more than those of ExxonMobil, Chevron, Shell, BP and Total combined, while the company refuses to disclose its full emissions. Its majority shareholder, the Saudi Arabian government, has been at the forefront of efforts to stall international action on climate change for decades. At the last UN climate talks in Madrid, over a third of Saudi Arabia's representatives were associated with the oil and gas industry, many with Aramco.
Equinor – 'This is what changed us.'
Previously trading under the name Statoil, the Norwegian state-owned oil and gas company Equinor rebranded in 2018, with the hope of highlighting its transformation into a "broad energy company" and its growing low-carbon energy division.
Equinor explained its reasons for the name change in an advert called "Equinor. This is what changed us." Scenes of raging storms and melting ice caps are displayed while the narrator says: "Some changes are so profound that they transcend everything. Changes that require us to find a new balance."
In a more recent ad, the company insists that "emissions must come down and it must happen fast."
Equinor is certainly taking steps to increase its investments in low-carbon technologies, with plans to up its renewable energy capacity to 4-6 gigawatts by 2026, and has set a "net zero" emissions target for 2050.
But this shift is largely in addition to, rather than in place of, its core oil and gas business. The company is still exploring for more oil and gas reserves and does not intend to start reducing its fossil fuel production before 2030. Last year, it opened the largest oil field in Western Europe and is heavily involved in ventures in the Arctic.
Equinor promotes natural gas as the "perfect fuel to balance renewable energy" and was given a warning two years ago by the UK's Advertising Standards Authority for claiming the fuel was a "low-carbon" energy source.
Another technology the company touts is carbon capture and storage (CCS), but all of the projects it is involved in currently amount to less than three percent of its overall emissions.
ClientEarth lawyer Johnny White said the collection of adverts showed the fossil fuel companies were involved in a "great deception."
"We need to reduce reliance on fossil fuels. But instead of leading a low-carbon transition, these companies are putting out advertising which distracts the public and launders their image," he said.
"These adverts are misrepresenting the true nature of companies' businesses, of their contribution to climate change, and of their transition plans," he added, saying that "we cannot underestimate the real world impact this advertising has on the pace of change."
You can find the full set of adverts and analyses here.
Additional research by Michaela Herrmann. Edited by Mat Hope.
Disclaimer: ClientEarth lawyer Sophie Marjanac sits on the board of DeSmog UK Ltd.
Reposted with permission from DeSmog.
By Ian Urbina
About 100 miles off the coast of Thailand, three dozen Cambodian boys and men worked barefoot all day and into the night on the deck of a purse seiner fishing ship. Fifteen-foot swells climbed the sides of the vessel, clipping the crew below the knees. Ocean spray and fish innards made the floor skating-rink slippery.
Seesawing erratically from the rough seas and gale winds, the deck was an obstacle course of jagged tackle, spinning winches and tall stacks of 500-pound nets. Rain or shine, shifts ran 18 to 20 hours. At night, the crew cast their nets when the small silver fish they target — mostly jack mackerel and herring — were more reflective and easier to spot in darker waters.
This was a brutal place, one that I've spent the past several years exploring. Fishing boats on the South China Sea, especially in the Thai fleet, had for years been notorious for using so-called sea slaves, mostly migrants forced offshore by debt or duress.
Two-thirds of the planet is covered by water and much of that space is ungoverned. Human rights, labor and environmental crimes occur often and with impunity because the oceans are vast. What laws exist are difficult to enforce.
Arguably the most important factor, though, is that the global public is woefully unaware of what happens offshore. Reporting about and from this realm is rare. As a result, landlubbers have little idea of how reliant they are on the sea or the more than 50 million people who work out there.
Forced labor on fishing ships is not the only human rights concern. Hundreds of stowaways and migrants are killed at sea annually. A multibillion-dollar private security industry operates at sea, and when these mercenary forces kill, governments rarely respond because no country holds jurisdiction in international waters. Somewhere in the world, at least one ship sinks every three days, which is part of the reason that fishing is routinely ranked as among the deadliest professions.
And then there's the environmental crisis. Oil spills aren't the worst of it. Every three years, ships intentionally dump more oil and sludge into the oceans than the Exxon Valdez and BP spills combined. Acidification is damaging most of the world's coral reefs.
Most of the world's fishing grounds are depleted. Some research predicts that by 2050, the sea will contain more plastic than fish. Overfishing, often boosted by government subsidies, means smaller catches closer to shore and an industry becoming more desperate. One out of every five fish on American plates comes from pirate fishing vessels.
Recent events have reminded the world of its dependence on maritime commerce. In the Port of Los Angeles, a COVID-induced bottleneck of dozens of cargo ships left consumers with shipping delays and deckhands idling, unable to reach the shore. In the Suez Canal, one sideways-turned ship led to a $10-billion traffic jam.
Despite occasional news coverage when calamity strikes offshore, reporting from this untamed frontier is generally scarce. Many news outlets have pulled back from international reporting because it is time-consuming and expensive.
The Outlaw Ocean Project, a nonprofit journalism organization, is working to fill this gap. A report we published last year with NBC News revealed the largest illegal fishing fleet ever discovered: more than 800 Chinese fishing boats operating in North Korean waters in violation of UN sanctions. These ships were accelerating the collapse of the squid stock while violently displacing local and smaller North Korean ships, with deadly consequences, as hundreds of these local fishermen were getting stranded too far from shore and dying.
But even with striking stories — about the oceans or anything else — journalism is struggling to reach younger people, who increasingly are turning to alternate sources of information from online platforms like Facebook, YouTube, and Twitter. And unless the public is engaged and interested, very little will change in terms of international policies or enforcement.
As much as we are devoted to the urgency of these ocean issues, it is clear that our investigations need to reach broad and new audiences to have impact. That's why we combined our traditional journalism with an experiment in using music to bring people to our work.
We created The Outlaw Ocean Music Project, an effort to help disseminate and financially support the reporting. More than 480 musicians from over 80 countries have joined the project to make albums in their own style and in a variety of genres, each inspired by the stories. The music has been published on more than 200 digital platforms (including Apple Play, YouTube and Amazon), with the streaming revenue funding more reporting.
Several artists from Seattle, Washington including Quackson, Petey Mac, and Hello Meteor, have participated in the project and share a common goal of creating EPs that tell the often-overlooked stories of the sea.
The musicians use audio samples from the video footage captured during the reporting, integrating sound clips such as machine-gun fire off the coast of Somalia and chanting captive deckhands on the South China Sea. This music has had a combined reach of more than 90 million people, many of whom move from the songs to the videos and to the written reports.
The oceans are existentially important. They are the circulatory system of global commerce, as 80 percent of the world's commercial cargo is carried by ships. They are also the lungs of the globe, serving as a carbon sink helping to clean the air while also producing half of the oxygen we breathe.
But for all its importance and breathtaking beauty, the sea is also a dystopian place, home to dark inhumanities. Too big to police and under no clear international authority, immense regions of treacherous water play host to rampant criminality and exploitation. The only way to better govern this offshore frontier, and to counter the human rights and environmental problems occurring out there, is to shine a continuous light on them. And for that, journalism — with an assist from music — has an urgent role to play.
Ian Urbina, a former investigative reporter for the New York Times, is the director of The Outlaw Ocean Project, a non-profit journalism organization based in Washington, DC, that focuses on reporting about environmental and human rights crimes at sea.
Reposted with permission from DeSmog.
By Nick Cunningham
The decade-long fracking boom in Appalachia has not led to significant job growth, and despite the region's extraordinary levels of natural gas production, the industry's promise of prosperity has "turned into almost nothing," according to a new report.
The fracking boom has received broad support from politicians across the aisle in Appalachia due to dreams of enormous job creation, but a report released on February 10 from Pennsylvania-based economic and sustainability think tank, the Ohio River Valley Institute (ORVI), sheds new light on the reality of this hype.
The report looked at how 22 counties across West Virginia, Pennsylvania, and Ohio — accounting for 90 percent of the region's natural gas production — fared during the fracking boom. It found that counties that saw the most drilling ended up with weaker job growth and declining populations compared to other parts of Appalachia and the nation as a whole.
Shale gas production from Appalachia exploded from minimal levels a little over a decade ago, to more than 32 billion cubic feet per day (Bcf/d) in 2019, or roughly 40 percent of the nation's total output. During this time, between 2008 and 2019, GDP across these 22 counties grew three times faster than that of the nation as a whole. However, based on a variety of metrics for actual economic prosperity — such as job growth, population growth, and the region's share of national income — the region fell further behind than the rest of the country.
Between 2008 and 2019, the number of jobs across the U.S. expanded by 10 percent, according to the ORVI report, but in Ohio, Pennsylvania, and West Virginia, job growth only grew by 4 percent. More glaringly, the 22 gas-producing counties in those three states — ground-zero for the drilling boom — only experienced 1.7 percent job growth.
"What's really disturbing is that these disappointing results came about at a time when the region's natural gas industry was operating at full capacity. So it's hard to imagine a scenario in which the results would be better," said Sean O'Leary, the report's author.
The report cited Belmont County, Ohio, as a particularly shocking case. Belmont County has received more than a third of all natural gas investment in the state, and accounts for more than a third of the state's gas production. The industry also accounts for about 60 percent of the county's economy. Because of the boom, the county's GDP grew five times faster than the national rate. And yet, the county saw a 7 percent decline in jobs and a 2 percent decline in population over the past decade.
"This report documents that many Marcellus and Utica region fracking gas counties typically have lost both population and jobs from 2008 to 2019," said John Hanger, former Pennsylvania secretary of Environmental Protection, commenting on the report. "This report explodes in a fireball of numbers the claims that the gas industry would bring prosperity to Pennsylvania, Ohio, or West Virginia. These are stubborn facts that indicate gas drilling has done the opposite in most of the top drilling counties."
A Boom Without Job Growth
This lack of job growth was not what the industry promised. A 2010 study from the American Petroleum Institute predicted that Pennsylvania would see more than 211,000 jobs created by 2020 due to the fracking boom, while West Virginia would see an additional 43,000 jobs. Studies like these were widely cited by politicians as proof that the fracking boom was an economic imperative and must be supported.
But the Ohio River Valley Institute report reveals the disconnect between a drilling boom and rising GDP on the one hand, and worse local employment outcomes on the other. There are likely many reasons for this disconnect related to the long list of negative externalities associated with fracking: The boom-and-bust nature of extractive industries creates risks for other business sectors, such as extreme economic volatility, deterring new businesses or expansions of existing ones; meanwhile air, water, and noise pollution negatively impact the health and environment of residents living nearby.
"There can be no mistake that the closer people live to shale gas development, the higher their risk for poor health outcomes," Alison Steele, executive director of the Southwest Pennsylvania Environmental Health Project, told DeSmog. "More than two dozen peer-reviewed epidemiological studies show a correlation between living near shale gas development and a host of health issues, such as worsening asthmas, heart failure hospitalizations, premature births, and babies born with low birth weights and birth defects."
Moreover, oil and gas drilling is capital-intensive, not job-intensive. As the example of Belmont County shows, only about 12 percent of income generated by the gas industry can be attributable to wages and employment, while in other sectors, on average, more than half of income goes to workers.
In other words, it costs a lot of money to drill, but it doesn't employ a lot of people, and much of the income is siphoned off to shareholders. To top it off, equipment and people are imported from outside the region — many of the jobs created went to workers brought in from places such as Texas and Oklahoma.
Despite the huge increase in shale gas production over the past decade, the vast majority of the 22 counties experiencing the drilling boom also experienced "economic stagnation or outright decline and depopulation," the report said.
The American Petroleum Institute did not respond to a request for comment.
"[W]e could see long ago that the job numbers published and pushed out by the industry years ago were based in bluster, not our economic realities," Veronica Coptis, executive director of Coalfield Justice, a non-profit based in southwest Pennsylvania, told DeSmog, commenting on the report. "At industry's behest and encouragement, Pennsylvania promoted shale gas development aggressively in rural areas for more than a decade. And yet, the southwestern counties at the epicenter of fracking do not show any obvious improvement in well-being."
Petrochemicals Also a False Hope
After natural gas prices fell sharply amid a glut of supply beginning in 2012, the number of wells drilled began to slow. Industry proponents then pinned their hopes on a new future: plastics. Petrochemical facilities would process low-cost natural gas into the building blocks of plastic and spur a virtuous cycle of new manufacturing while prolonging the drilling boom.
A 2017 study from the American Chemistry Council said that Appalachia could support as many as nine ethane crackers, massive petrochemical facilities that use natural gas liquids to manufacture little plastic pellets. This study said that the Appalachian petrochemical "renaissance" was in its early stages, but the build-out would bring along a slew of processing facilities, and crucially, a large-scale petrochemical storage hub. Once built, the industry boasted that all of this petrochemical infrastructure would attract more than $35 billion in investment to the region, add more than 25,000 direct jobs, and another 43,000 indirect jobs.
But this petrochemical promise, too, has mostly been a mirage. Most of the proposed ethane crackers have been cancelled or delayed. Only one has moved forward: Shell's ethane cracker in Beaver County, Pennsylvania, which was lured to the state with a $1.6 billion tax credit, the largest tax break in Pennsylvania history.
Even in Beaver County, job growth has been anemic: the county saw employment actually contract by 0.5 percent between 2008 and 2019, despite breaking ground on Appalachia's flagship petrochemical facility, according to ORVI. In reality, the Shell cracker will employ several thousand people temporarily during construction, but only employ 600 people permanently when it comes online.
The market for petrochemicals has soured dramatically since Shell gave the greenlight on the project several years ago, raising doubts about future growth. And yet, in 2020, the Pennsylvania legislature passed another $667 million tax credit intended to lure in more petrochemical facilities to the state. Democratic Governor Tom Wolf supported it.
As the ORVI report concluded: "[P]olicymakers should look very critically at proposals to expand or otherwise assist the natural gas industry, which has yet to demonstrate that it is capable of contributing positively locally or on a large scale to the states and counties where it is most prevalent."
Reposted with permission from DeSmog.
- Unemployed Texas Oil Workers Find Jobs in Growing Solar Industry ›
- As Fracking Companies Face Bankruptcy, U.S. Regulators Enable ... ›
- Delaware River Basin Commission Votes to Ban Fracking - EcoWatch ›
'Disappointing' Decision From Norway's Supreme Court in Climate Lawsuit Challenging Arctic Offshore Oil Licenses
By Dana Drugmand
Norway's Supreme Court on Tuesday ruled not to overturn the Norwegian government's approval of new licenses for offshore oil drilling in the fragile Arctic region.
The ruling – a culmination of four years of high-profile litigation in a case challenging continued fossil fuel production on climate change grounds — came as a big disappointment, and even outrage, for environmental and climate activists in Norway and internationally.
"We are outraged with this judgment, which leaves youth and future generations without Constitutional protection. The Supreme Court chooses loyalty to Norwegian oil over our rights to a liveable future," Therese Hugstmyr Woie, head of a youth-led environmental organization called Young Friends of the Earth Norway, said in a press release.
"I am disappointed and outraged by the fact that the Norwegian constitution doesn't provide me and my peers with judicial protection from politicians stealing our future," Andreas Randøy, deputy head of Young Friends of the Earth Norway, told DeSmog in an emailed statement. "I wasn't old enough to vote out the politicians who opened up for new oil drilling in the arctic, further north than ever before. Yet I am a part of the generation who has to deal with its consequences. I really thought the Supreme Court would value that to a greater extent."
Today we are disappointed and worried: The Supreme Court of Norway has chosen to back oil over our rights to a live… https://t.co/ZLWPL6Lvsu— Greenpeace (@Greenpeace)1608643674.0
Young Friends of the Earth Norway and Greenpeace Norway sued the Norwegian government in 2016 over the government's granting of new offshore oil licenses in the Barents Sea. The environmental organizations argued permitting new oil drilling is incompatible with the Paris Agreement goal to limit global warming to well below 2 degrees Celsius and constitutes a violation of section 112 of Norway's constitution that outlines a right to a healthy environment.
The lawsuit sought a court order to invalidate the oil licenses based on this constitutional provision, and considering that climate science dictates that the vast majority of fossil fuels be left in the ground to avoid the most catastrophic levels of warming. The United Nations Special Rapporteur on Human Rights and the Environment David Boyd supported the lawsuit and warned that Norway's continued oil production during a time of climate emergency amounts to a violation of human rights
The Norwegian courts ultimately disagreed that rights had been violated. The Oslo District Court initially determined in January 2018 that there was no constitutional violation stemming from the government's grant of new oil licenses. On appeal, a Norwegian appeals court upheld this ruling in January this year, though the appeals court did decide that the Norwegian government should be responsible for the carbon emissions tied to its petroleum exports.
The Supreme Court of Norway took up the case this year on another appeal, with hearings held in November. The court issued its decision on December 22, ruling 11-4 in favor of the government and against the environmental organizations. The four dissenting judges found the government had made procedural errors in its oil licensing decision, according to Greenpeace Norway.
The leader of Greenpeace Norway, one of the organizational plaintiffs in this case, said the Supreme Court ruling is disappointing and that the plaintiffs are looking at other avenues to continue making their case.
"It is absurd that our right to a liveable environment cannot be used to stop Norway's most harmful activities for our climate and environment," said Frode Pleym, head of Greenpeace Norway. "We will now consider all possibilities to stop this harmful industry, including an application to the European Court of Human Rights."
'This Should Be a Warning to the Oil Industry'
Although the Norwegian Supreme Court declined to overturn the grant of oil licenses in this instance, the ruling did acknowledge that Norwegian authorities may have a duty to deny oil companies' permits to actually produce the oil given the constitutional right to a healthy environment.
In other words, as Carroll Muffett, president of the Center for International Environmental Law explained to DeSmog, the court concluded there is a distinction between oil exploration and oil production.
"Here's the part that is the worst possible news for oil companies. The court actually emphasized that simply finding oil under authority of an exploration license doesn't give any company any guarantee that they'll be permitted to produce the oil," Muffett said.
"There's a real missed opportunity on the part of the court in moving the law of human rights and the rights of future generations forward in this decision," he added. "And at the same time when you look at the practical impacts of this decision, what the decision says for industry is you're welcome to go and invest massive amounts of money in exploring for new oil if you want, but the critical question government is going to have to ask is can you produce it if it is contributing to climate change?"
Norway's Sup Ct failed to invalidate licenses to explore for Arctic oil, but made clear that finding oil is no guar… https://t.co/9rtGn6SJS6— Carroll Muffett (@Carroll Muffett)1608647745.0
Muffett said the ruling will also increase pressure for Norway's political leadership to listen to their citizens and consider following Denmark's lead in halting new oil and gas exploration and production. A recent opinion poll in Norway found that a majority of Norwegian citizens agree that oil exploration in the Arctic should be stopped for climate and environmental reasons.
"The Court has let the government off the hook at this time, but leaves the door open for an assessment on climate impacts, including emissions after export, at the later production stage," said Greenpeace Norway's Frode Pleym. "This should be a warning to the oil industry. At this moment in history, no oil producing country holds a credible position on climate without ending exploration for new oil and setting a plan for retiring the industry."
Reposted with permission from DeSmog.
By Dana Drugmand
An unprecedented climate lawsuit brought by six Portuguese youths is to be fast-tracked at Europe's highest court, it was announced today.
The European Court of Human Rights said the case, which accuses 33 European nations of violating the applicants' right to life by disregarding the climate emergency, would be granted priority status due to the "importance and urgency of the issues raised."
This is the first climate lawsuit to be filed with the international court in Strasbourg, France, and campaigners say the decision represents a major step towards a potential landmark judgment.
‘Protect Our Future’
Cláudia Agostinho (21), Catarina Mota (20), Martim Agostinho (17), Sofia Oliveira (15), André Oliveira (12) and Mariana Agostinho (8) are bringing the case with nonprofit law firm Global Legal Action Network (GLAN), arguing that none of the countries have sufficiently ambitious targets to cut their emissions.
Portugal recently sweltered through its hottest July in 90 years and has seen a rise in devastating heatwaves and wildfires over recent years due to rising temperatures. Four of the applicants live in Leiria, one of the regions worst-hit by the forest fires that killed more than 120 people in 2017.
Responding to the development, André Oliveira, 12, said: "It gives me lots of hope to know that the judges in the European Court of Human Rights recognise the urgency of our case."
"But what I'd like the most would be for European governments to immediately do what the scientists say is necessary to protect our future. Until they do this, we will keep on fighting with more determination than ever."
"This is an appropriate response from the Court given the scale and imminence of the threat these young people face from the climate emergency," he added.
By suing the 33 countries all together, the youths aim to compel these national governments to act more aggressively on climate through a single court order, which would potentially be more effective than pursuing separate lawsuits or lobbying policymakers in each country.
If successful, the defendant countries would be legally bound not only to ramp up emissions cuts, but also to tackle overseas contributions to climate change including those of their multinational enterprises.
The countries targeted include all of the European Union member states as well as Norway, Russia, Switzerland, Turkey, Ukraine and the United Kingdom, none of which are currently aligned with Paris agreement target to limit global temperature rise to well below 2 degrees C (3.6 degrees F) and pursue a limit of 1.5 degrees C (2.7 degrees F).
Climate Action Tracker rates most of Europe as "insufficient" in terms of its emissions reduction policies based on the Paris target, while Ukraine, Turkey and Russia are assessed as "critically insufficient" – meaning they are on track for a warming of 4 degrees C or higher.
The European Union has pledged to slash its emissions by at least 55 percent by 2030. But the Portuguese youth plaintiffs are calling for cuts of at least 65 percent by 2030, a level that European climate campaigners say is necessary to meet the 1.5 degrees warming limit.
The 33 countries must each respond to the youths' complaint by the end of February, before lawyers representing the plaintiffs will respond to the points of defense.
"Nothing less than a 65 percent reduction by 2030 will be enough for the EU member states to comply with their obligations to the youth-applicants and indeed countless others," Gerry Liston, legal officer with GLAN, said in a press release.
"These brave young people have cleared a major hurdle in their pursuit of a judgment which compels European governments to accelerate their climate mitigation efforts."
Reposted with permission from DeSmog.
By Nick Cunningham
A growing number of refineries around the world are either curtailing operations or shutting down entirely as the oil market collapses.
Oil prices have fallen precipitously to their lowest levels in nearly two decades. Typically, falling oil prices are a good thing for refiners because they buy crude oil on the cheap and process it into gasoline, jet fuel, and diesel, selling those products at higher prices. The end consumer also tends to consume more when fuel is less expensive. As a result, the profit margin for refiners tends to widen when crude oil becomes oversupplied.
But the world is in the midst of dual supply and demand shock — too much drilling has produced a substantial surplus, and the global coronavirus pandemic has led to a historic drop in consumption. Oil demand could fall by as much as 20 percent, according to the International Energy Agency, by far the largest decline in consumption ever recorded.
Consumption of jet fuel around the world has plunged by 75 percent. Average retail gasoline prices in the U.S. are dropping below $2 per gallon nationwide and have already fallen below $1 per gallon in some places. They will fall further still.
"If oil continues to sell at such a low price, some of those companies are going to have severe financial issues tr… https://t.co/hHNTRFJ7uc— KENS 5 (@KENS 5)1585594804.0
In fact, margins even fell into negative territory, meaning that the average refiner was losing money on every gallon of gasoline produced. Refiners now find themselves facing a painful financial squeeze.
"We're seeing gasoline cracks at negative margins. We're seeing jet cracks even worse," Brian Mandell, an executive with Phillips 66, said on a March 24 phone call with investors. "Cracks" refer to the difference between the cost of buying crude oil and selling the refined product, and it stands in as a reference point for a refiner's profit margin.
One of the main strategies that refiners use when a particular product is oversupplied is to alter their processing mix. Facing a glut of gasoline, refiners could switch their operations away from gasoline to a focus on diesel, where margins have not declined by nearly as much. "With strong price signals pushing refiners towards diesel production, they would have made immediate adjustments to tweak their refined product yields," RBN Energy, a consultancy, wrote in a report.
However, some refiners already switched over to diesel following tighter international sulfur regulations on maritime fuels that took effect at the start of this year, which placed a premium on low-sulfur diesel. Having already tapped that strategy, the ability to adjust away from gasoline production is "likely limited," RBN concluded.
Collapsing Demand Leads to Refinery Closures
There are around 3 billion people on some form of a lockdown around the world. In those circumstances, refiners have seen buyers vanish overnight.
"We're seeing even our Latin American customers asking us if they can back out of cargoes now, so we see that the demand destruction is starting to move toward Latin America," Brian Mandell, the Phillips 66 executive, told investors.
With no buyers, gasoline is set to pile up in storage. Refiners are looking at no other choice but to curtail or shut down operations.
Valero Energy, for instance, recently announced that it would limit output at six of its 12 U.S. refineries. ExxonMobil announced significant cuts to its refineries in Texas and Louisiana, citing the lack of sufficient storage capacity. Notably, Exxon said it would shut down its gasoline unit at its Baytown, Texas, complex, the company's largest such unit in the United States.
"The refiners are struggling mightily, due to the steep drop in demand," John Kilduff, a partner at Again Capital LLC, told Bloomberg. "The poor refining margins will push companies to reduce operating rates further."
The danger for some refineries is that they cannot simply throttle back and operate at really low levels. "In our experience, crude throughput in the 60 percent to 70 percent range is approaching the minimum rates that a refinery can operate without completely shutting down units," RBN said.
According to Phillips 66, even that threshold might be optimistic. "I don't think a good rule of thumb would be down in the 60 percent range for refiners. Most refineries can't turn down that far," Robert Herman, an executive with Phillips 66, said on an investor call. With refiners already lowering processing, "we're nearing kind of minimum crude rates in many of our refineries today," he added.
In other words, facing a mounting glut and no ability to lower output further, some refineries may simply need to shut down entirely.
We are now witnessing oil refiners not just cutting runs, but in some markets they are completely shutting down.… https://t.co/0ndZjNMUHE— Javier Blas (@Javier Blas)1585569542.0
In one particularly unusual move, India's Reliance Industries said it would simply sell the crude oil that it had in transit at sea, rather than allowing the cargo to arrive at its refineries. Reliance, which operates the world's largest refining complex, said it would instead cut processing rates. "As of now, the plan is to cut refining throughput in April because demand is not there," a source told Reuters.
In the U.S., refineries unable to switch away from gasoline are most at risk, as are those in the Midwest and the Rockies, where access to pipelines and storage capacity is a fraction of that on the Gulf Coast, according to RBN.
"It is not difficult to see run cuts of 10 mmb/d (million barrels per day) soon, perhaps peaking at 15-20 mmb/d at the height of the pandemic. This is likely to force some refineries to close down, while others will reduce rates severely," research firm FGE said in a report on March 30.
Running out of Storage, Oil Prices to Crash Further
The situation could unravel rather quickly. Consumers aren't consuming and refiners are lowering their operations. Ultimately, that means that oil drillers will have no place to sell their oil.
A number of pipeline companies have already asked oil drillers to cut back on their production because the pipeline system was becoming overwhelmed.
The estimated 20-million-barrel-per-day surplus will lead to storage filling up in the next two to three months. To avoid such an outcome, analysts widely see crude prices crashing even further.
"Demand for gasoline (no driving) and jet fuel (no flying) has now crashed and inventories for these products are already brimming. Refineries in many places are now losing money for every barrel they process, or they have no place to store their output of oil products," Bjarne Schieldrop, chief commodities analyst at SEB, a Swedish corporate bank, said in a statement. "For land-based or land-locked oil producers, this means only one thing: the local oil price or well-head price they receive very quickly goes to zero or even negative."
Reposted with permission from DeSmog.
- Trump Bails Out Oil Industry, Not U.S. Families, as Coronavirus ... ›
- Trump's Christmas Gift to Big Oil: Killing Hopes of Electric Car Tax ... ›
- BP to Cut 10,000 Jobs as Oil Demand Plummets - EcoWatch ›
Two years after internal documents surfaced showing that Royal Dutch Shell, like ExxonMobil, knew about climate dangers decades ago, the oil giant released its latest annual report outlining its business strategy and approach to addressing climate change. Despite clear warnings from scientists, global health experts and even central banks of impending climate-driven crises, Shell's report largely sends a message that everything is fine and the company's "business strategy is sound."
That is not to say that Shell is ignoring the challenges facing it and other oil majors. But overall Shell appears to be toeing the line between saying it is responding to the climate challenge and inevitable energy transition on the one hand, and maintaining its core oil and gas business model on the other.
Shell's 2019 Annual Report is filled with statements that reveal the company's perspective on the Paris agreement, the energy transition, and climate litigation and regulatory risk to its business. A few of these statements seem contradictory, and it is important to keep in mind the context of #ShellKnew when the company says now, in 2020, that it is committed to being part of the solution.
According to the report, there are three parts to Shell's overall strategy going forward: to thrive in the energy transition, to provide a world-class investment case, and to sustain a strong societal license to operate. That may sound good on paper, but in reality significant challenges are mounting for each of these pillars.
In terms of the energy transition, Shell appears to be paying lip service to it more than actually revamping its portfolio or overhauling its business model. Its core business remains oil and gas. Period.
The company may be ahead of some other oil giants like Exxon and Chevron in terms of adding alternative energies to its energy mix, but overall its commitment to clean energy is minimal.
Shell notes in its report that it spends "$1-2 billion a year until 2020 in different services and products from a range of cleaner sources," and "investments in power could grow to $2-3 billion a year on average" from 2021 to 2025. The vast majority of the company's capital expenditure ($24bn to $29bn in 2020) goes into oil and gas, and failure to replace proved reserves could have a "material adverse effect." Instead of aligning with the energy transition, Shell's business model is based on continual hydrocarbon exploitation.
In terms of a "world-class investment," the oil and gas sector is particularly vulnerable at the moment to financial pressure and investors are increasingly turning away from fossil fuels. Jim Cramer infamously dubbed fossil fuels "in the death knell phase." Shell acknowledges this risk. It notes in its report that fossil fuel divestment "could have a material adverse effect on the price of our securities and our ability to access capital markets."
Shell also recognizes its vulnerability to an eroding social license as the public and particularly younger generations start to scorn Big Oil.
"In 2019, many protested about climate change, sometimes directly targeting Shell," Shell CEO Ben Van Beurden wrote in the report. The company includes challenges to its reputation as a risk factor, noting, "There is increasing focus on the role of oil and gas in the context of climate change and energy transition. This could negatively affect our brand, reputation and licence to operate."
Shell did not immediately respond to a request for comment on the risk to its social license.
Shell Claims to Support Paris Agreement, Plans for Gradual Energy Transition
In its report, Shell says it fully supports the Paris agreement goal to limit warming well below 2 degrees C, and supports "the vision of a transition towards a net-zero emissions energy system." But, in contrast to fellow European oil major BP, Shell is not committing its own business to net zero emissions.
Shell says it has "no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years." Instead, Shell's Net Carbon Footprint "ambition" is to reduce emissions (including its customers' and suppliers' emissions) of its energy production and products by 20 percent by 2035 and by 50 percent by 2050. This is not aligned with climate science guidelines that say complete decarbonization or "net zero" is necessary by 2050 at the latest.
Shell's own business is therefore not aligned with the goal of the Paris agreement, and the company is facing a lawsuit over this in its home country of the Netherlands. Current emissions reduction plans or "Nationally Determined Contributions" (NDCs) submitted by countries under the Paris agreement are also inadequate. As Shell notes in its report, current NDCs amount to about 3 degrees C of warming. "In coming decades, we expect countries to tighten these NDCs to meet the goals of the Paris agreement," the report states. Shell's view appears to be that the world has decades to get its act together.
In that view, Shell says it is fully on board with the energy transition and plans to transform its own business "over time." The report includes statements like "Shell aims to become an integrated power player and grow, over time, a material new business", and, "for us, protecting the environment also means working to transform our product mix over time, for example, by expanding the choice of lower-carbon products we offer customers."
Yet, in a seeming contradiction to these statements, Shell says it "agrees with the Intergovernmental Panel on Climate Change (IPCC) 1.5°C special report," which clearly warned that limiting warming to 1.5°C would require, as Shell notes, "an even more rapid escalation in the scale and pace of change."
While Shell claims to fully support the Paris agreement, in another seeming contradiction, the company states in its report that the government action necessary to meet Paris targets could harm its business: "Policies and regulations designed to limit the increase in global temperatures to well below 2°C could have a material adverse effect on Shell – through higher operating costs and reduced demand for some of our products."
Shell also says it is wary of governments actually taking climate action: "we believe measures taken by governments to control national energy transitions may also have unintended consequences."
Yet, at the same time, Shell says it expects to be subject to increasing regulation. "We also expect that GHG regulation, as well as emission reduction actions by customers, will continue to result in suppression of demand for fossil fuels, either through taxes, fees and/or incentives to promote the sale of lower-carbon electric vehicles or even through the future prohibition of sales of new diesel or gasoline vehicles, such as the prohibition in the United Kingdom (UK) beginning in 2035. This could result in lower revenue and, in the long term, potential impairment of certain assets," the report states.
Climate Litigation Risk
Shell, like other fossil fuel companies, has long been concerned about governments imposing climate policies or regulations that would affect its business. Shell and its industry peers are already facing climate lawsuits, and Shell is explicitly identifying climate litigation as part of a broader risk factor associated with "rising climate change concern."
In its report, Shell acknowledged the lawsuits could negatively impact its financial condition: "In some countries, governments, regulators, organisations and individuals have filed lawsuits seeking to hold fossil fuel companies liable for costs associated with climate change. While we believe these lawsuits to be without merit, losing any of these lawsuits could have a material adverse effect on our earnings, cash flows and financial condition."
Shell actually foresaw climate-related lawsuits as a possibility more than 20 years ago. One of the internal documents that a Dutch news organization first uncovered (and published on the site Climate Files) is a 1998 document of Shell planning scenarios where the company hypothetically envisions a series of violent storms battering the eastern U.S., which then spur environmental NGOs to bring "a class-action suit against the US government and fossil-fuel companies on the grounds of neglecting what scientists (including their own) have been saying for years: that something must be done."
One statement from Shell's annual report rings particularly true: "Shell has long recognised that greenhouse gas (GHG) emissions from the use of fossil fuels are contributing to the warming of the climate system."
Indeed, Shell has long known that fossil fuels are warming the planet and that the consequences would be of a huge magnitude.
One internal Shell document from 1988 called "The Greenhouse Effect" warned that GHG emissions would lead to warming over the next century, likely ranging from 1.5 C to 3.5 C. According to that document, "The changes may be the greatest in recorded history." Some parts of the planet may become uninhabitable, and there may be "significant changes in sea level, ocean currents, precipitation patterns, regional temperature and weather," it says. Impacts could be severe and "could have major social, economic, and political consequences."
What did Shell do with that knowledge? It started introducing doubt and giving weight to a 'significant minority' of 'alternative viewpoints' as the full implications for the company's business model became clear.
Shell was a member of the Global Climate Coalition, a fossil fuel industry-funded group that worked to undermine climate science and block climate policy internationally. The group formed in 1988 and Shell was a member throughout much of the 1990s.
During that time Shell was not exactly upfront with its own shareholders about potential risks climate change posed to its business. The first time Shell even mentioned climate change was in a 1991 annual report. But it wasn't until 2004 that Shell made a clear warning in its annual report about financial risk associated with fossil fuel investment.
Critics have for many years accused Shell's of greenwashing — acknowledging the climate threat and touting its "commitment" to being part of the solution, despite continuing to spend heavily on oil and gas with only minimal investment in alternative energy. Shell's latest annual report suggests the company isn't deviating far from that strategy.
Reposted with permission from DeSmog.
- A New Golden Age for Big Oil or a Golden Goodbye? - EcoWatch ›
- Shell Shareholders Vote Down Climate Change Proposal But Signal ... ›
- ExxonMobil Lambasted Over 'Grossly Insufficient' Emissions Reduction Plan - EcoWatch ›
- Climate Polluters Are Greenwashing Sports Sponsorships ›
- In Historic Ruling, Dutch Court Rules Shell Must Abide by Paris Agreement ›
- In Sign of Climate Pressure, Royal Dutch Shell Sells Permian Basin Holdings - EcoWatch ›