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Oil giant Shell accused of 'greenwashing' and misleading investors

The Climate 202

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🚨 The Biden administration is nearing partial approval of a controversial oil drilling project on Alaska’s North Slope, known as Willow, our colleague Timothy Puko reports. More on that below. But first:

Advocacy group accuses Shell of ‘greenwashing’ and misleading investors in SEC complaint

An advocacy group is accusing the oil giant Royal Dutch Shell of misleading investors by classifying its investments in natural gas as spending on renewable energy.

In a complaint filed today with the Securities and Exchange Commission, the group Global Witness argues that Shell’s classifications amount to “greenwashing” — the practice of portraying a business or product as more environmentally friendly than it really is.

The pioneering complaint opens a new front in a burgeoning battle over gas’s green credentials. While gas has lower emissions than coal, its primary component is methane, a powerful planet-warming pollutant.

“Shell has been engaging in what we consider to be pretty egregious greenwashing,” Zorka Milin, a senior legal adviser at Global Witness, told The Climate 202. “And we would like to invite scrutiny from the appropriate authorities.”

The complaint alleges that Shell has improperly included gas investments in the category “Renewables and Energy Solutions” in its annual reports to the SEC.

  • In Shell’s most recent annual report, for instance, the company said it directed 12 percent of its capital expenditure to “Renewables and Energy Solutions” in 2021.
  • But according to a Global Witness analysis of figures reported by Shell, the company directed just 1.5 percent of its capital expenditure to developing renewable energy sources such as wind and solar power. The rest of the spending went toward gas.
  • As a result, Global Witness alleges, Shell has misled investors about its commitment to transitioning away from fossil fuels and reducing its exposure to climate-related risks. 

The complaint urges the SEC to investigate the matter and take “appropriate enforcement action” if it finds that Shell has unlawfully made misleading statements or omissions.

Asked for comment, Shell spokesman Curtis Smith said in an email that “we’re confident Shell’s financial disclosures are fully compliant with all SEC and other reporting requirements.”

Smith added that the oil giant budgeted $20 billion last year for “energy transition activities,” including investments in “low-carbon fuels,” wind, hydrogen, and carbon capture and sequestration.

‘Not climate radicals’

The complaint comes as policymakers advance controversial plans to classify gas as green on both sides of the Atlantic.

  • Ohio Gov. Mike DeWine (R) recently signed a bill to legally redefine gas as a source of “green energy,” capping a successful campaign by dark money groups with ties to the gas industry.
  • And last summer, the European Parliament voted to move ahead with a plan to label gas and nuclear power as “green” in some circumstances, a response to energy challenges created by Russia’s invasion of Ukraine.

Supporters of these moves argue that gas has lower carbon dioxide emissions than coal, the dirtiest fossil fuel. But detractors contend that the main component of gas is methane, which traps about 80 times as much heat as carbon dioxide during its first 20 years in the atmosphere.

Milin noted that even the International Energy Agency, a historically conservative body, has said there can be no new gas, oil and coal development if humanity wants to prevent dangerous global warming beyond 1.5 degrees Celsius (2.7 degrees Fahrenheit).

“They’re not climate radicals by any measure, and they’ve made very clear that there’s no long-term future for gas,” Milin said.

Record-smashing profits

Meanwhile, the country’s largest oil companies are also facing scrutiny for posting record profits while gasoline prices creep up amid the war in Ukraine, our colleague Evan Halper reports.

  • ExxonMobil on Tuesday reported a record annual profit of $55.7 billion for 2022, soaring past its earlier record of $45 billion in 2008.
  • Chevron on Friday posted a $36.5 billion annual profit for 2022 that was more than double its earnings last year, drawing a rebuke from the White House.
  • The announcements come as the national average for a regular gallon of gas hovers around $3.51, according to AAA. That’s down from a record $5.02 in June, but up from an average of $3.37 a year ago.

Industry analysts say the profits are not connected to the current upward swing in gas prices. But they are giving politicians and drivers plenty to vent about, with Sen. Catherine Cortez Masto (D-Nev.) tweeting Tuesday that “price gouging our families is wrong, and I'm fighting to hold these companies accountable.”

Shell is set to report its profits on Thursday, potentially fueling even further scrutiny of the oil giant.

Agency alert

Giant Alaskan oil project nears final approval

Biden administration officials are drafting a key environmental assessment to say the Interior Department can grant partial approval to ConocoPhillips’s controversial drilling project on Alaska’s North Slope, known as Willow, setting the stage for one of the administration’s most consequential climate decisions, The Washington Post’s Timothy Puko reports.

The final environmental impact statement for Willow, due this week, is expected to lay out a preferred alternative that allows three well pads, down from the originally requested five, according to two people briefed on the process, who spoke on the condition of anonymity because they were not authorized to comment publicly. 

That would match a preliminary proposal the agency released this summer, and be in line with what ConocoPhillips officials have publicly said they need to make the project worth the company’s investment. After the environmental assessment is released, the Biden administration will have 30 days to weigh a final decision on the project. 

The New York Times first reported those recommendations. Interior declined to comment.

According to an analysis by the Center for American Progress, a liberal think tank, the larger site would have generated up to 287 million metric tons of carbon dioxide over the next 30 years — equivalent to the annual emissions of 76 coal-fired power plants. ConocoPhillips has disputed those estimates.

On the Hill

Grijalva announces top Democrats on Natural Resources panel

Rep. Raúl M. Grijalva (D-Ariz.), ranking member of the House Natural Resources Committee, on Tuesday announced the top Democrats on the panel, which plays a key role in crafting climate and environmental policy.

Rep. Alexandria Ocasio-Cortez (N.Y.) got a coveted seat on the committee and will become ranking member of the Subcommittee on Energy and Mineral Resources.

The other top Democrats include:

  • Rep. Jared Huffman (Calif.), ranking member of the Subcommittee on Water, Wildlife and Fisheries.
  • Rep. Joe Neguse (Colo.), ranking member of the Subcommittee on Federal Lands.
  • Rep. Melanie Stansbury (N.M.), ranking member of the Subcommittee on Oversight and Investigations.
  • Rep. Teresa Leger Fernandez (N.M.), ranking member of the Subcommittee on Indian and Insular Affairs.
  • Rep. Sydney Kamlager-Dove (Calif.), vice ranking member of the full committee.

Natural Resources Committee Chair Bruce Westerman (R-Ark.) has not yet named the panel’s top Republicans. Westerman spokeswoman Rebekah Hoshiko said in an email they will be announced during the committee’s organizing meeting today at 10:15 a.m.

Pressure points

Biden is touting giant EVs. Are they actually good for the planet?

President Biden took the wheel of an electric Hummer during a visit to General Motors "Factory Zero" plant in Detroit on Nov. 17, 2021. (Video: Reuters)

President Biden visits a General Motors plant in Detroit. (Reuters)

President Biden has made driving very large electric vehicles a signature move, one meant to demonstrate his efforts to electrify the transportation sector, which accounts for nearly 30 percent of the nation’s carbon emissions, The Post’s Shannon Osaka reports.  

On Monday, for instance, the president’s Twitter posted a picture of him behind the wheel of an electric Hummer with the caption: “On my watch, the great American road trip is going to be fully electrified.”

But despite Biden’s enthusiasm for some of the biggest vehicles around, these giant EVs pollute the planet more than small cars running on gasoline, research shows.

An electric Hummer driven on the average power grid in the United States emits about 276 grams of carbon dioxide per mile, while a gas-powered Toyota Corolla emits 269 grams, according to an analysis by Quartz. Small EVs, such as the Tesla Model 3 or the Chevy Bolt, emit 97 to 108 grams.

One reason is that huge EVs are incredibly heavy, at 6,000 to 9,000 pounds, and more weight means more energy is needed to drive. Plus, EVs emit less carbon dioxide when they are charged in states with cleaner electricity mixes.

In the atmosphere


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