Fossil fuel doublespeak

The world’s transition into a decarbonized economy is being undermined by continued public investment into the oil and gas sector. How has the fossil fuel industry duped governments into supporting their energy projects?

oil rig offshore
The top 20 private oil and gas companies invest £23bn globally in exploration − less than half the £55bn being ploughed in by G20 governments. Image: Shutterstock

Since the Paris climate agreement was signed in 2015, too many policymakers have fallen for the oil and gas industry’s rhetoric about how it can help to reduce greenhouse-gas emissions. Tall tales about “clean coal,” “oil pipelines to fund clean energy,” and “gas as a bridge fuel” have coaxed governments into rubber-stamping new fossil-fuel projects, even though current fossil-fuel production already threatens to push temperatures well beyond the Paris agreement’s limit of well below 2° Celsius above pre-industrial levels.

The International Energy Agency (IEA) estimates that in 2016, investment in the oil and gas sector totaled $649 billion, and that fossil-fuel subsidies within the G20 countries amounted to $72 billion. And by 2030, investments in new gas projects across G20 countries are expected to surpass $1.6 trillion.

Clearly, the industry has pulled out all the stops to expand production and profits before the world moves to a decarbonised economy. And so far, it is succeeding, because it has convinced governments of multiple falsehoods.

For starters, there is the claim that natural gas can be a “bridge fuel” to a stable climate even though its climate impact often equals that of coal—or worse. In reality, a “dash for gas” would consume almost two-thirds of G20 countries’ combined carbon budget by 2050. Worse, new gas production often displaces not coal, but wind- and solar-energy projects, both of which are now cheaper than coal and gas in many regions. The fact that most new investments in gas production assume at least a 30-year operational timeline should be evidence enough that they are not geared toward reducing emissions anytime soon.

One would expect the European Union to lead the way toward a decarbonised future. But, if anything, it seems to be doing the opposite. Since 2014, the EU has allocated €1 billion ($1.16 billion) to the natural gas sector. And though the European Commission’s proposed 2020-2027 budget would reduce such funding, it would allow member states to continue spending taxpayers’ money on fossil-fuel production. Yet, according to a study by British climate scientists Kevin Anderson and John Broderick, in order to meet its climate commitments, the EU must phase out all fossil fuels by 2035.

Another industry canard is that income from oil and gas expansion is needed to fund the transition to a clean economy. This incoherent claim has underpinned policy in Canada, where the authorities continue to push for major new tar sands pipelines. Most recently, the government stepped in and paid the Texas-based energy firm Kinder Morgan $3.4 billion for a 65-year-old pipeline in order to ensure its planned expansion, which the company had deemed too risky.

This use of public funds is particularly objectionable because it threatens to lock in the very energy sources that are driving dangerous climate change. Implicit in any major new investment in energy infrastructure is that operations will continue for decades, as even if demand and prices fall dramatically, an owner or investor will prefer some income return on that capital rather than nothing. As a result, politically and legally, it is much harder to shut down a project than to stop it before it starts.

A third ingredient of fossil-fuel flimflam is so-called clean coal, often relying on carbon capture and storage (CCS) technologies. Governments and the energy industry have long framed CCS as a silver bullet for climate change, and thus as a perfect excuse for postponing meaningful reductions in fossil-fuel use. And now, CCS is even being promoted as an enabling technology for magical schemes that can “suck” carbon out of the atmosphere.

CCS was originally developed for enhanced oil recovery (EOR), whereby pressurised CO2 is pumped into older oil reservoirs to extract otherwise inaccessible crude oil, significantly boosting production, and thus greenhouse gas emissions. The technique has been used for more than 40 years, particularly in the United States. But it is costly in terms of both money and energy: a coal-fired power station that adopts CCS must burn even more coal in order to produce the same amount of energy.

The main reason that oil companies have become such strong proponents of CCS is that it offers them a source of subsidised CO2 for use in EOR. Companies such as Shell and Statoil have spent decades and billions of dollars on CCS research and development, and all they have to show for it is a few commercial-scale CCS operations. It is already clear that CCS is commercially viable only when used for EOR, which means that coal itself will never be a clean fuel, even if modern filters can be used to reduce particulate air pollution.

A final claim often made by oil and gas companies is that they can execute any given project more “cleanly” than anyone else. Energy companies have been racing to announce new technologies and measures that supposedly improve the efficiency of their current operations, as if that should give them the right to increase production unabated.

But, as with the rest of the industry’s doublespeak, this logic more often than not leads to further lock-in, as firms sink ever more funding into unproven negative-emissions technologies and other measures that will perpetuate dependence on fossil fuels. For example, the Canadian province of Alberta, home of the tar sands, is investing $304 million explicitly to “help [oil sands] companies increase production and reduce emissions.”

At a time when science and expertise are increasingly being dismissed as elitist conceits, governments that know better should not be helping fossil-fuel companies profit from the mounting climate crisis. The industry’s spin machine threatens to trap us all in a dangerous status quo.

The global climate movement is redefining leadership on this issue, but nongovernmental organisations and activists alone cannot usher in a decarbonised future. Governments that claim to be committed to the Paris accord must offer a robust plan for phasing out fossil fuels, rather than supporting that sector’s continued expansion.

Lili Fuhr heads the Ecology and Sustainable Development Department at the Heinrich Böll Foundation. Hannah McKinnon is Director of the Energy Futures and Transitions Program at Oil Change International.

Copyright: Project Syndicate, 2018.

Like this content? Join our growing community.

Your support helps to strengthen independent journalism, which is critically needed to guide business and policy development for positive impact. Unlock unlimited access to our content and members-only perks.

Most popular

Featured Events

Publish your event
leaf background pattern

Transforming Innovation for Sustainability Join the Ecosystem →