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Big Oil investors reject calls for stricter climate goals — so far

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Big Oil investors reject calls for stricter climate goals — so far

Investors in three of the world's largest oil and gas companies this week rejected proposals for the firms to set stronger climate targets, as fossil fuel firms reap record profits following Russia's invasion of Ukraine.

But the fight is far from over, according to climate activists pushing oil companies to embrace swifter climate action during the 2022 proxy season.

The details: Oil and gas majors on both sides of the Atlantic are scheduled to hold their annual shareholder meetings this month. The Dutch climate activist group Follow This has introduced proposals for several firms to align their climate strategies with the more ambitious goal of the Paris agreement — limiting global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above preindustrial levels.

So far, shareholders of three energy companies have beat back the climate resolutions, although the 2022 proxy season is set to continue in the coming weeks.

  • At BP's annual general meeting in London on Thursday, only 15 percent of shareholders voted in favor of the climate resolution, down from 21 percent in 2021.
  • At ConocoPhillips's meeting on Wednesday, 39 percent of shareholders supported the climate proposal, compared to 58 percent in 2021.
  • And at the Norwegian state-owned energy company Equinor, 38 percent of non-government shareholders backed the climate resolution during its meeting in Oslo on Wednesday.
  • U.K.-based Shell will hold its annual shareholder meeting on May 24, while France's TotalEnergies has scheduled its meeting for May 25.
  • In the United States, Chevron and ExxonMobil have both slated their meetings for May 25.
Windfall profits

BP shareholders on Thursday appeared less concerned about the climate crisis than about maximizing profits amid the war in Ukraine, Follow This founder Mark van Baal said in a statement after the vote.

“BP may have convinced investors that addressing the current energy shortage overrides addressing climate change,” van Baal said. “Neither our climate resolution nor BP’s strategy have changed; their current strategy still does not lead to emission reductions by 2030. However, investor sentiment apparently has changed, likely as a result of the energy crisis and windfall profits brought on by the war in Ukraine.”

Fossil fuel firms have reaped record profits since Moscow's invasion of Ukraine, which sent crude oil prices surging above $100 a barrel. 

At Thursday's meeting, BP Chairman Helge Lund urged shareholders to reject the resolution from Follow This. He noted that the company has already announced a goal of reaching net-zero emissions by 2050 or sooner, with interim targets in 2025 and 2030.

“BP already has a net-zero ambition,” Lund said. “We already have targets and aims for emissions reductions for the short, medium and long term. And we are already providing regular updates on progress and performance. For those reasons, Resolution 24 offers nothing beyond what we are already doing — other than to undermine your board’s control of our strategy.”

A BP spokesman declined to comment further.

Past successes

Andrew Logan, an analyst who tracks the oil and gas industry at the sustainability nonprofit Ceres, said the war in Ukraine has created “head winds” for climate proposals that call for curbing scope 3 emissions, or the emissions generated by a company's customers and suppliers.

For fossil fuel firms, reducing scope 3 emissions would involve cutting oil and gas production, even as Europe scrambles to stock up on oil and gas before imposing tighter sanctions on Moscow's energy sector.

Still, Logan noted that the climate resolutions from Follow This are “more ambitious” this year than during the 2021 proxy season, when the activist group did not specifically urge U.S. oil majors to align their trajectories with the Paris accord. 

“At a high level, it's not surprising that votes are lower this year because of the success of past shareholder seasons,” he added.

Chevron studies methane

At its annual general meeting later this month, Chevron's board has encouraged investors to support a resolution from Mercy Investment Services focused on methane, a potent planet-warming gas.

The resolution “requests that the board oversee the preparation of a report analyzing a critical climate change concern, the reliability of Chevron’s methane emission disclosures.”

With the backing of the board, the proposal will probably pass, said Mary Minette, director of shareholder advocacy at Mercy Investment Services.

“We were pleasantly surprised that the board decided to support the methane proposal,” Minette said in an email. “It doesn't happen that often!”

On the Hill

House to vote on bill to bar ‘excessive’ gasoline prices

The House is set to vote next week on a measure that would prohibit price increases at the gas pump during national energy emergencies, Ari Natter and Billy House report for Bloomberg News.

Sponsored by Reps. Kim Schrier (D-Wash.) and Katie Porter (D-Calif.), both of whom are facing competitive reelection races, the measure would empower the Biden administration to issue an emergency declaration barring companies from setting “unconscionably excessive” gas prices.

Senate Majority Leader Charles E. Schumer (D-N.Y.) also plans to bring to the floor legislation from Sen. Maria Cantwell (D-Wash.) that would allow the Federal Trade Commission to issue penalties for price gouging. That measure is unlikely to draw enough Republican support in the evenly divided Senate.

Merkley cites climate in voting against Powell's second term as Fed chair

The Senate on Thursday confirmed Federal Reserve Chair Jerome H. Powell to a second term leading the central bank by a vote of 80 to 19, The Washington Post's Rachel Siegel reports.

Sen. Jeff Merkley (D-Ore.) was one of several Democrats and Republicans to vote against the nomination, saying Powell has been insufficiently committed to tackling climate change, an issue the world's central banks are increasingly confronting.

“During his tenure, Chair Powell resisted calls for the Fed to use its tools and during a hearing this year he said, ‘we are not and we don’t seek to be climate policymakers.’ This is not good enough,” Merkley said in a statement. “We need a Fed Chair who understands the risks that climate chaos poses to our economy and who is prepared to take this head-on.”

Sen. Sheldon Whitehouse (D-R.I.), who last year issued a joint statement with Merkley opposing Powell's climate record, voted to confirm him.

Clean energy executives discuss tax credits with Manchin, Granholm

Clean energy executives on Thursday met separately with Sen. Joe Manchin III (D-W.Va.) and Energy Secretary Jennifer Granholm to discuss the clean energy tax credits in President Biden's stalled budget reconciliation bill.

The meetings were organized by Advanced Energy Economy, an energy industry trade association, and included executives from SunPower and EDF Renewables. The conversation with Manchin lasted about half an hour and focused on the importance of production-based manufacturing credits, a staffer with Advanced Energy Economy told The Climate 202, speaking on the condition of anonymity to describe the politically sensitive discussion.

The energy trade association also sent a letter to senators, the White House and the Commerce Department calling for the passage of the clean energy tax credits and a halt to Commerce's investigation into solar panel makers from four Asian countries.

House panel investigates Postal Service plan to buy mostly gas-powered trucks

The House Oversight and Reform Committee has launched an investigation into the U.S. Postal Service’s February decision to purchase mostly gas-powered mail delivery trucks, seeking confidential records on the vehicles' environmental impact and costs, The Washington Post's Jacob Bogage reports. 

In a letter sent Wednesday evening to Postmaster General Louis DeJoy, Oversight Chair Carolyn B. Maloney (D-N.Y.) said the agency may have “relied on flawed assumptions” when it signed the $11.3 billion contract to buy a fleet in which only 1 in 10 vehicles would be electric.

The Postal Service has the largest civilian fleet in the federal government and is crucial to achieving President Biden’s goal of electrifying the entire fleet by 2035. The agency has so far refused to voluntarily turn over records to lawmakers about the trucks, setting the stage for a potential congressional subpoena this summer. 

Pressure points

The swift march of climate change in North Carolina’s ‘ghost forests’

The scars of climate change are unmistakable in North Carolina's “ghost forests,” where barren tree trunks stand in place of once-towering pines and landscapes have succumbed to saltwater, The Post's Brady Dennis reports.

Rising sea levels and intensifying storms have left scientists racing to study the ghost forests before it's too late. In a paper published last year, scientists wrote that “these unprecedented rates of deforestation and land cover change due to climate change may become the status quo for coastal regions worldwide.”

In a normal scenario, such forests act as massive natural carbon sinks. But as they die and land retreats to the ocean, huge amounts of the potent gas could be released back into the atmosphere, further complicating efforts to stave off global warming and future disasters.

International climate

As the E.U. ditches Russian gas, Senegal sees opportunity and ‘hypocrisy’

Months after promising to stop financing new fossil fuel projects to tackle climate change, the European Union is turning to African nations rich with oil and gas reserves to quickly make up for lost Russian energy, potentially securing oil and gas contracts for years more than planned, The Post's Danielle Paquette and Evan Halper report.

European energy leaders are looking at Senegal as a replacement for Russia — which previously shipped 39 percent of the bloc's natural gas — despite pledging to transition completely to clean energy in the coming decades. 

Senegal is set to begin production next year in new gas fields that would be used over the next three decades — even as environmentalists warn of damage to the county’s shorelines and wildlife.

In the atmosphere

Viral

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