Date: 2024-07-17 Page is: DBtxt003.php txt00017505
Energy
Important conversation
A climate advocate walks into an oil industry summit ... And says 'ow.' But seriously, folks...
Good article and very interesting ... but at the same time somewhat frustrating. I graduated a long time ago (1961) after studying engineering and economics at Cambridge. Subsequently I became an accountant with the job of helping to manage to optimize company performance (i.e. profits) and later on worked internationally on economic development and humanitarian relief. I have concluded that we are not well served by conventional financial accounting and management information. Rather, we need a system of numbering that better reflects the reality of the global socio-enviro-economic system in all its complexity. Most of the concepts already exist in conventional accountancy ... such as balance sheets. P&L accounts, consolidation principles, group accounts, multi-currency accounting, and a lot more ... and they can be applied to social capital numbering, natural capital numbering and economic capital numbering in a comprehensive system that embraces everything that is important. In the system I envision, numbering is not monetization and the metrics do not change with market sentiment. It is more than 25 years since John Elkington articulated the idea of the Triple Bottom LIne but it remains a talking point and not a ubiquitous framework for numbering. Another issue that must be addressed is the way numbering reflects multiple responsibilities along the supply chain, through use and into the post use waste chain. The idea that it is only the corporate producer that is to blame is wrong ... the life cycle of the product depends on many actors, all of whom have some responsibility, and especially consumers. Without numbering there cannot be management (Peter Drucker). We must have a radical upgrade of the way the numbering gets done so that all economic activities are associated with the impacts they have had, are having and will have on all the capitals, not just financial capital. Not easy ... not simple ... but incredibly important!
Peter Burgess
oil pipeline and climate change activist signs ShutterstockGreenBiz Collage / Cardaf / arindambanerjee
And says 'ow.' But seriously, folks...
Last week, I moderated a panel on the mainstage of the Western States Petroleum Association (WSPA) annual conference. I was joined by representatives from Ceres, Chevron, WSPA, the American Forest Foundation and a California assemblymember to discuss the role of the oil and gas industry in climate politics and policies.
I spent two days at the summit, and it was surreal. In a former life, I campaigned against WSPA, which was working hard to weaken and dismantle California climate policy. Suddenly, I was in the lion’s den, meeting and talking to actual people I once fired shots at across the Twittersphere.
I was invited because WSPA aims to increase communication with climate advocates and environmentalists in an attempt to be part of the climate conversation. While I’m perennially suspicious of the oil and gas industry’s motives, spending two days in the belly of the beast brought me around to the idea that we would all benefit from talking to people with opposing worldviews. How can we solve global problems if we all disagree on the building blocks of the challenge?
In a former life, I campaigned against WSPA, which was working hard to weaken and dismantle California climate policy. Suddenly, I was in the lion’s den.
Here are five ideas, narratives and perspectives that I haven’t been able to stop thinking about since the WSPA conference:
1. The oil industry believes in climate change and that it is complicit
I thought I was going to hear a healthy dose of denial and delay-ism from WSPA members. After all, if you believe mainstream science, why would you work for a company actively accelerating the world toward climate chaos?
Instead, person after person agreed climate is real, we owe it to our children to act now and we need to rapidly curb fossil fuel-related emissions to tackle the challenge. We all wanted the same things: a safe climate future, clean air and water, and affordable, accessible and clean energy (although conference participants would be quick to replace the adjective 'clean' with 'low carbon').
2. The oil industry is doing more than people know to curb emissions
The story goes like this: Natural gas operations are reducing emissions from coal, fossil fuel companies are behind leaps in energy efficiency and productivity, the industry has made progress in capturing emissions from extraction and production. But no one knows about it: Speaker after speaker at the conference agreed the oil industry is doing a bad job telling its own story of climate action.
I was not persuaded. If the stats shared by presenters from the American Gas Association are accurate, the fossil fuels have become more productive — but are incapable of ever reaching the deep decarbonization needed to reach the commitments of the Paris climate accord. This narrative celebrates tinkering on the margins at a time when we need a fundamental shift. The focus reflects how out of step the oil industry with from other sectors, many of which made ambitious climate commitments just one week before at Climate Week.
From left to right: Sarah Golden, GreenBiz; Tracey Cameron, Ceres; Assm. Heath Flora (R-Ripon); Catherine Reheis-Boyd, WSPA; Kirsten Thorne, Chevron; Nathan Truitt, American Forest Foundation
3. Transitioning from fossil fuels too quickly will lead to economic ruin
The clean energy community and fossil fuel industry have very different talking points about the potential of their respective technologies.
While clean energy experts point out that the levelized cost of renewables is cheaper than fossil fuel generation (never mind the socialized cost of pollution), the high-level talking point at the conference was that fossil fuels are the only option for lifting — and keeping — people out of poverty, citing the low cost of natural gas that has made electricity more accessible to more people.
This disconnect about something that comes down to hard numbers made me long for better communication between the two sides. Perhaps we’re beyond being able to agree on which 'facts' are correct, but if we’re serious about addressing climate change, having a candid conversation about the lowest-cost option to reach decarbonization goals might help us find a way forward.
4. Climate activists are setting the fossil fuel agenda
Those in the oil industry see themselves on the defensive, responding to activists that have turned the public against an industry, despite that industry is still needed to power the economy. I heard several versions of a downcast refrain like 'they hate us' and 'they want us to not exist.'
Those in the industry pointed out that it is mad to want a massive energy transition and shut out the largest providers of energy, and all of their expertise, from the conversation. The caricature etched about climate advocates were naive, unreasonable, influential and mean.
I found this fascinating. The oil industry has been exposed repeatedly for funding front groups, sowing misinformation campaigns and lobbying against climate policy, yet those I spoke to genuinely believed their industry was always on its heels. People sounded genuinely hurt that others wanted their companies to die.
I felt like I was back to the politicking of high school when I said, 'It’s not that they hate you, it’s that your product is incompatible with a safe climate future, which is why you need to transition. If you don’t transition, yeah, you’re going to have to go away… you know what I mean?'
5. 'Fossil fuel companies don’t burn fuel, they just supply it'
In conversations over meals and in hallways, several conference attendees shared the idea that 'we don’t burn fossil fuels. We produce them.' The idea being that fossil fuel emissions is a demand-side problem, and as long as there’s a demand we won’t curb the supply.
This is a familiar argument in California. Former Gov. Jerry Brown, hailed as a climate advocate, permitted massive amounts of oil extraction in California and focused his policy on reducing demand.
I get what they’re saying here. As long as people will buy it, someone will sell it, so why not us? If this logic is followed, it does not bode well for the oil industry’s cooperation in any climate policy. That tragedy-of-the-commons rationale is that of an industry that does not have designs on becoming a clean energy leader.
It also ignores the inextricable connection between supply and demand, and the oil industry's culpability in actively working to keep demand high, such as just unfolded with its successful opposition to clean car standards.
My takeaway
Despite my many doubts, having open conversations with members of the petroleum industry was extremely illuminating. It was yet another reminder of the way our polarized discourse is denying us the opportunity to pull our oars in the same direction.
I hope oil companies begin to think about how they will become 'energy' companies. The industry has the capital flow and infrastructure experience that the clean energy transition needs. But I also think it is unlikely the oil industry will get there if they’re only speaking to each other. I don’t know which is more unlikely: that the clean energy transition will happen with the oil industry or that it can happen without it.
This article has been adapted from GreenBiz's newsletter, Energy Weekly, running Thursdays. Subscribe here.
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COMMENTS
PeterBurgess • 2 minutes ago
Good article and very interesting ... but at the same time somewhat frustrating. I graduated a long time ago (1961) after studying engineering and economics at Cambridge. Subsequently I became an accountant with the job of helping to manage to optimize company performance (i.e. profits) and later on worked internationally on economic development and humanitarian relief. I have concluded that we are not well served by conventional financial accounting and management information. Rather, we need a system of numbering that better reflects the reality of the global socio-enviro-economic system in all its complexity. Most of the concepts already exist in conventional accountancy ... such as balance sheets. P&L accounts, consolidation principles, group accounts, multi-currency accounting, and a lot more ... and they can be applied to social capital numbering, natural capital numbering and economic capital numbering in a comprehensive system that embraces everything that is important. In the system I envision, numbering is not monetization and the metrics do not change with market sentiment. It is more than 25 years since John Elkington articulated the idea of the Triple Bottom LIne but it remains a talking point and not a ubiquitous framework for numbering. Another issue that must be addressed is the way numbering reflects multiple responsibilities along the supply chain, through use and into the post use waste chain. The idea that it is only the corporate producer that is to blame is wrong ... the life cycle of the product depends on many actors, all of whom have some responsibility, and especially consumers. Without numbering there cannot be management (Peter Drucker). We must have a radical upgrade of the way the numbering gets done so that all economic activities are associated with the impacts they have had, are having and will have on all the capitals, not just financial capital. Not easy ... not simple ... but incredibly important!
Matt Carrell • 3 days ago
Hmm… interesting. Thought provoking.. but how do you tell these oil barons, many of whom are 'dabbling' in clean energy to simply bite the bullet, invest in clean energy and move beyond their legacy without simply being really blunt and telling them to do just that? Yes, there is a reason many people hate them, because they have actively facilitated the creation of the problem, actively fought the solutions for the problem, actively denied through countless PR campaigns that there was a problem, or that they weren't part of the solution. They want to be loved but they don't want to do the hard work and face the music (which means they have to invest/spend their 'hard earned'—ahem billions of dollars they have accrued by fleecing the public of its money with their constant price increases at perfectly timed points on the calendar to maximize profits, their constant taking and lobbying for subsidies they don't need while still raking in higher profits than ever. This money they rightfully should have to give back to the public they have betrayed can instead be spent on guaranteeing them a chair at the table if they invest it properly in the current and future clean technologies…)…. But to tell you the truth, I just on't see a future for them. People are tired of having their lives run and railroaded by money grubbing profit-obsessed monopolistic energy corporations and to be truthful much of the energy future is aimed at people generating their own energy for themselves. This doesn't leave much room for companies hell-bent on fleecing the public for yet more money to be middle-men in that equation. For these over-paid oil execs, I think they had better look elsewhere for their future employment opportunities than the energy sector if they think that they can just move into renewables and somehow for them it will be business as usual because that just isn't in the cards for them, but hey, I hear McDonald's is alway hiring! ;)
Pat Matt Carrell • 2 days ago
So well said. 👍