ENSPIRING.ai: Has Big Oil changed? - FT Film
The video explores the historic testimony of top fossil fuel executives before Congress, highlighting the complexity of the oil industry's role in climate change. Just as big tobacco was once accused of covering up health harms, big oil faces similar scrutiny for allegedly suppressing scientific data on the climate impact of carbon emissions. Despite their economic significance and profitability over the decades, these companies are currently struggling with a tarnished reputation while trying to address mounting public and political pressures.
The ongoing global energy crisis, exacerbated by geopolitical tensions, has shifted the narrative surrounding the oil industry's responsibilities. The video discusses the historical background and influence of major oil companies, their lobbying power, and their strategies to adapt to changing environmental regulations. The industry faces tensions as it grapples with climate change-related criticisms while simultaneously being asked to increase production to curb reliance on hostile nations.
Main takeaways from the video:
Please remember to turn on the CC button to view the subtitles.
Key Vocabularies and Common Phrases:
1. opprobrium [əˈproʊbriəm] - (noun) - Harsh criticism or censure. - Synonyms: (disgrace, reproach, condemnation)
I think Big Oil has attracted the opprobrium many times, deservedly, but also sometimes it goes a bit over the top.
2. transgressions [trænsˈɡrɛʃənz] - (noun) - Acts that go against a law, rule, or code of conduct. - Synonyms: (violations, offenses, breaches)
Big companies crushing campaigners and whistleblowers and people who are trying to highlight their transgressions.
3. repudiate [rɪˈpjuːdiˌeɪt] - (verb) - To refuse to accept or support something. - Synonyms: (reject, disavow, renounce)
The psychic shock for that man, of realizing that he'd gone overnight from being a hero to a zero, that his own grandchildren, and it was all of his grandchildren, couldn't bear to tell their friends what his day job had been was a real wake up call.
4. facade [fəˈsɑːd] - (noun) - A deceptive outward appearance. - Synonyms: (illusion, false front, guise)
So there it's a facade of dealing with the real issue of climate change as opposed to really grappling with transitioning their industry away from fossil fuels.
5. lobbying [ˈlɒbiːɪŋ] - (noun) - The act of attempting to influence decisions made by officials in the government. - Synonyms: (advocacy, persuasion, influence)
The lobbying industry is highly advanced in Washington, DC and has more than 100, about 150 lobbying firms that focus just on oil and gas.
6. monopoly [məˈnɒpəli] - (noun) - The exclusive possession or control of the supply of or trade in a commodity or service. - Synonyms: (domination, cartel, oligopoly)
And so were viewed as is this concentrated, monopoly like business.
7. greenwash [ˈɡriːnˌwɒʃ] - (verb) - To deceptively promote the perception that an organization's products, aims, or policies are environmentally friendly. - Synonyms: (deceptive eco-friendliness, eco-spin, cosmetic environmentalism)
There is debate about whether it is meaningful and in good faith, or whether it is being used to, quote, greenwash the companies
8. effluent [ˈɛfluənt] - (noun) - Liquid waste or sewage discharged into a river or the sea. - Synonyms: (waste, discharge, pollution)
They are trying to readjust that impression now, and they're trying to change the impression from the general public.
9. grappling [ˈɡræplɪŋ] - (verb) - Engaging in a close struggle to deal with or overcome a difficult problem. - Synonyms: (wrestling, struggling, tackling)
So there it's a facade of dealing with the real issue of climate change as opposed to really grappling with transitioning their industry away from fossil fuels.
10. conundrum [kəˈnʌndrəm] - (noun) - A confusing and difficult problem or question. - Synonyms: (dilemma, puzzle, enigma)
One of the interesting things we've seen this year coming out of the pandemic and after Russia's invasion of Ukraine is a real shift in the conversation around some of these big oil players.
Has Big Oil changed? - FT Film
This is a historic hearing. For the first time, top fossil fuel executives are testifying together before Congress under oath about the industry's role in causing climate change. Just as big tobacco today is accused of knowingly covering up evidence of the harm that tobacco products were causing, so too, big oil is being accused of knowingly crushing the scientific that carbon emissions were essentially contributing to global warming. We live in a petroleum era, and the companies at the center of the oil industry that constitute big oil, they have huge, huge significance for the global economy. They have been there for decades. They've been producing this oil for decades. They've been extremely profitable for decades because we all burn so much of the stuff that they sell.
These companies that represented american capitalism, corporate America, were reliable dividend payers and so on. In recent decades, their reputation has changed. They are trying to readjust the impression from the general public they're hostile to efforts to control climate change, but they have decades of lobbying against these rules to overcome. When there's an energy crisis of the kind that we're seeing now, suddenly the debate changes. Oil companies were being told to stop producing these fossil fuels. Now they're being asked by governments around the world to produce more of them. So that's where some of the tension lies.
So, in the old days, right, the industry really got going by John D. Rockefeller. Right? And he built just an incredible company that put its competitors out of business by selling kerosene at a lower price than everyone else. Lighting fuel. Kerosene displaced that. And fortunately, a couple decades later, gasoline became the main product coming out of oil and Henry Ford and cars. But it started with a huge company, and Standard Oil was broken up into Exxon and chevron and mobile. And these huge companies. Heat mobility, mechanized agriculture, modern medicine, quite literally, the food we eat, the clothes we wear, and the standard of living we enjoy.
For more than 140 years, Chevron has proudly delivered energy that drives the world forward. In the seventies, there was a great book called the Seven Sisters, the seven major oil companies, five Americans, British Petroleum and Shell, and the amazing scale they had across the global oil industry. And so were viewed as is this concentrated, monopoly like business. This was the era, of course, when we had places like Texas and Dallas and that wonderful soap opera where everyone had big hair, big cars, and big was good. Today, the world has changed. The science has been crystal clear. Our planet's on fire. How dare you continue to look away of companies have already recognized the imminent threat of climate change.
Essentially, big is no longer seen as being automatically good. But more importantly, the idea of big oil is often allied with big tobacco, in the sense of big companies crushing campaigners and whistleblowers and people who are trying to highlight their transgressions and using their political muscle to really push forward with a very negative agenda. There's lots of reasons to hate big oil. There have been spills across the world. They've been on the wrong side of human rights. You know, human rights. Abusing regimes in places like Myanmar or South Sudan or wherever it is, Libya, agitating for conflict or being quick to get into conflict zones and not caring too much about the authorities and what they're doing to people. They've lobbied against rules on new laws, on climate change and pollution, and that has really, really blackened the image of the industry.
Our products, fuel, hospitals, schools, offices, restaurants, stores and homes. They enable the movement of goods around the world and right to our very doorsteps. They create good paying jobs that support families across the country. I'm a great fan of the comment by Upton Sinclair, the american novelist, saying, it's very hard to get a man to believe if his job depends on not believing. We all tend to turn our eyes away from inconvenient truths. And the case of carbon emissions from big oil was certainly one of those, because they're more visible than others. You know, when you want to say you're really mad at the oil industry, it's big oil. I hate big oil. And when you drive around, you look at signs by gas stations, you see Exxon, you see chevron, you see Conoco, and they are indeed big companies.
But again, most of those signs, those are not their gas stations. They're branded. They may. And they're buying gasoline from wherever they can. They're usually owned by a local family, but they're this image of these evil, greedy guys. And then the other thing about oil companies, why they have such a bad reputation. Since the pandemic, they have made more money than they have ever dreamt of making. And they are making more money now than they burnt through during a decade of debt fuel drilling binges across Texas.
We're seeing this extraordinary kind of financial windfall from high oil prices and high gas prices after Russia's invasion of Ukraine. They have capitalized on that tragedy to lock in a huge amount of a natural gas export infrastructure. They've been exporting enormous amounts of lng, liquefied natural gas. What distinguishes big oil from the thousands of other, smaller oil companies in the US as well, is their relationship with Washington. And you could do something here. You could tell them to knock it off for the sake of the planet. You could end it. You could end that lobbying. The american political system is filthy in every sense and quite a literal sense, in that big oil has been very effective at using its money to essentially buy political access, to push for its own self interest, to ensure it has powerful lobbyists, to ensure that politicians know that they rely heavily on big oil for donations in many parts of America.
I am Sheila Krumholtz, executive director of open secrets. We are comprehensively following the money from K Street to Main street, from Washington to each state capitol. The lobbying industry is highly advanced in Washington, DC and has more than 100, about 150 lobbying firms that focus just on oil and gas. Over time, they have spent $2.6 billion on lobbying and ranks 6th among all industries. Look, of course there's lobbying efforts. Of course our industry is big. So there's lots of trade groups. And in fact, sometimes they're lobbying for different things. There's different interests. You know, a highly competitive marketplace is good for the little guys, for big guys, you know, a harder to get into industry maybe is advantageous.
The other side of the influence buying coin to lobbying is campaign contributions. Political contributions are investments in, usually in incumbent policymakers, legislators. In the first 21 months of the 2022 election cycle, oil and gas has spent more than $150 million, 68% of that favoring republican candidates and parties. Over time back to 1989, they've spent more than $1.6 billion on political donations. The largest organization for us in Washington is the American Petroleum Institute. API. I'm sitting here in the western states. We have the Western Energy alliance, because in the western part of our country, there's a lot of federal lands. So the western energy alliance focuses on policy on federal lands.
In the western United States, there's an organization that represents the smaller companies, the domestic Energy Producers alliance, that's based in Oklahoma, but it's really focused on the little guys, the most powerful lobby groups in the world. The American Petroleum Institute gets its funding from big oil companies and smaller oil companies, but pretty much represents the interests of big oil in America. And it is extremely powerful in Washington. It's very knowledgeable. It has alliances with senators and representatives on both sides of the House, Democrats and Republicans.
Third month has been higher, so we're using the same amount of energy. But our bill keeps going up and it can go higher. How? Apparently it's a lack of access to affordable energy like gas and oil. Look at this extreme environmental plan, a proposed ban on developing energy sources on federal lands. So what does that mean, API will lobby both on a federal level and on a state level. And we see a lot of that in their direct lobbying to policymakers, but also in their advertising. We've seen API in particular really target ads towards state level policies. EV mandates in one state whilst running ads against gas bans in another. Like New York was a recent one. So they function at both levels. That could really hurt folks on a fixed income, like your mom.
Yeah, they are trying to readjust that impression now, and they're trying to change the impression from the general public. They're hostile to efforts to control climate change, but they have decades of lobbying against these rules to overcome. And so that's where some of the tension lies. A few years ago, when I was chatting to one of the leaders of one of the biggest american oil companies, who told me with real sincerity and conviction that he'd spent most of his career in his community, really thinking that he was doing nothing but good for the american political economy and being admired and respected and feeling very proud of what he did. And then one day, about four years ago, his own granddaughter came home and begged him not to tell her new boyfriend what he did for a job, because she was so ashamed of it. And the psychic shock for that man, of realizing that he'd gone overnight from being a hero to a zero, that his own grandchildren, and it was all of his grandchildren, couldn't bear to tell their friends what his day job had been was a real wake up call.
That's the kind of shock that many of the leaders of the fossil fuel world have essentially been experiencing in the last few years. So they've moved to a sort of a more sophisticated messaging tactic. They know that outright denying the reality of climate change doesn't play well with a big chunk of the american people. So instead, what we've seen is a shift towards these more nuanced and more subtle tactics, where the strategy is to undermine and unpick science based policy action instead. And that's operating on an individual level with specific policies, but also around the broader conversation. And that will be things like promoting gas as a climate solution, for instance, is an argument that we've seen a lot of out of the us oil and gas industry and groups like API and the American Gas association as well, and really trying to undercut policy that way.
But one area where experts agree is that oil and natural gas will continue to be the leading energy sources for decades to come. And it is important that we take action to reduce emissions while providing that energy. The biggest driver of reducing greenhouse gas emissions. Natural gas is the fastest growing energy source on the planet because it's mostly displacing coal. Thank you for the question, congresswoman. It's an important one and one that we've been focused on for quite some time, is striking the balance of continuing to meet the growing demand for energy while reducing emissions.
Natural gas has been pointed out as one step towards replacing higher emission fuel systems. We are also working on reducing our own emissions at our plant. You know, while it may have some greenhouse gas benefits compared to coal, it's still not a very clean source. And the industry is really using the claim that it's cleaner than coal to deceptively, you know, green wash, a product that isn't very, very problematic and concerning about climate change.
There's the big debate in the industry right now about what role big oil companies are going to play in the energy transition. And you see companies adopting very different strategies, really. And you see an especially big split between the american companies and the european companies. So european companies like BP, Shell, total are being much more aggressive going into wind power, solar power, batteries and these kind of technologies explicitly moving away from oil and reducing their oil production.
You do not see that in the US. I mean, I think the us companies still, when it comes down to it, see themselves as oil producers. They plan to continue producing oil, they hope to continue producing more oil and growing oil production. And kind of their strategy revolves more around producing oil but trying to reduce the emissions from those oils. So what you hear from them is that oil isn't the problem, the emissions are the problem. Carbon capture, hydrogen, algae. They emphasize technological solutions that are supposedly just around the corner, and they tend to downplay the ability of renewables to meet the world's energy needs.
So it's a more sophisticated tactic, but the goal is really the same, to lock in as much profit from fossil fuels as possible for as long as possible. There is debate about whether it is meaningful and in good faith, or whether it is being used to, quote, greenwash the companies. So there it's a facade of dealing with the real issue of climate change as opposed to really grappling with transitioning their industry away from fossil fuels.
It's complicated. There are lobbyists that are working on a wide array of issues. There are also PR professionals who are working with these companies. For these companies to shape public opinion. So it is not just what is being reported by the registered lobbyists and what's being spent on that, but also the money that is being invested in sophisticated advertising campaigns by the companies. So what we're reporting is the tip of the iceberg. It's really just the beginning.
I think Big Oil has attracted the opprobrium many times, deservedly, but also sometimes it goes a bit over the top. These are companies that fundamentally began life by digging stuff out of the ground, providing it to us so that we could move from one place to the other. And that's essentially what they still do. They're very good at making sure that that's profitable and making sure that the rules don't stop them from being profitable, especially in the United States. But at their essence, they are providing a service that we all rely on. And we really, as consumers, also need to decide what the future of big oil is, because as long as we continue to consume their products and not resist the car dependent cultures that have risen in western economies, as long as we were willing to keep consuming this stuff at ever greater volumes each year, the more power we give to the oil industry and to big oil.
Yeah. One of the interesting things we've seen this year coming out of the pandemic and after Russia's invasion of Ukraine is a real shift in the conversation around some of these big oil players, like Exxon and Chevron and the industry itself and their kind of role in the economy and their role in society. They're hearing the opposite signal. Produce more oil. Produce more natural gas. We need it because we want to break our dependence on Russia, because we want to drive down gasoline prices. We need more and more and more. It's a very, very mixed signal, but it's one that's brought some relief to big oil companies.
If anyone thinks a big oil is going to suddenly imply clothes or shut up shop tomorrow or die a dramatic death of the thought that people like the activist Greta Thunberg Hope, well, I've got news for you. It ain't happening. The world is going to be dependent on oil and gas for a pretty long time, and what you're likely to see is a slow, stealthy reorientation or a shrinkage, as effectively, oil and gas companies are forced or encouraged to put more and more emphasis onto renewables. But also the world becomes more energy efficient and better at using the supplies we have in a much more effective way.
Climate Change, Fossil Fuels, Economics, Politics, Lobbying, Energy Transition, Financial Times
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