Irina Slav
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
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By Irina Slav – Mar 30, 2024, 4:00 PM CDT
- Climate Action 100+ criticizes Big Oil for falling short of net-zero preparedness criteria.
- Global oil and gas demand remains strong, challenging the transition to renewable energy.
- Transition details and costs are proving more complex and expensive than anticipated.
Climate Action 100+, a lobby group comprising many of the world’s biggest asset managers, has criticized Big Oil majors for falling short of a set of criteria devised to assess a company’s preparedness for a net-zero world.
The finding, as detailed in a recent Reuters report, is hardly a surprise since it has been a while since anyone involved in the transition push had a good word to say about the oil industry. However, the timing of this latest attack on the oil industry is notable. Climate Action 100+ is slamming oil and gas producers for doing what they do as more signs emerge that the transition away from oil and gas will be a lot more challenging than hoped.
Climate Action 100+ used a rating framework designed by the Transition Pathway Initiative Centre, an entity of the London School of Economics to rate the 10 biggest public oil and gas companies in Europe and North America. It found that, overall, those companies only met 19% of the requirements set out in the framework for net-zero preparedness.
The ratings were done in three segments, namely Disclosure, Alignment, and Climate Solutions. The best performer was TotalEnergies, which scored high on Disclosure, which refers to how open a company is about its operations, and on Climate Solutions, which covers investments in alternative energy. Like the rest of the companies analyzed, however, even TotalEnergies rated low on Alignment, which refers to the amount of oil and gas each company produces.
Climate Action 100+ essentially criticized Big Oil for producing too much oil and gas, for not reporting enough about its operations, and for not investing enough in alternative energy. None of these criticisms are new, and none of them are going away.
But they are coming at the industry at a time when physical demand for oil and gas is shattering forecasts of peak oil and gas. With them, the health of demand for oil and gas is also shattering the argument that a transition away from hydrocarbons is both possible and possible fast.
Artificial intelligence is a pertinent example. Big Tech is in a rush to expand on its AI capabilities and sell them to everyone they work with. But there is a problem. AI data centers are even more power hungry than non-AI data centers. This means that AI is driving a surge in electricity demand,