Why Is Big Oil Backing the Paris Climate Agreement?

Now, the White House’s ‘An America First Energy Plan’ does not mention the Paris accord, and although we’re halfway through the first 100 days of President Trump’s term in office, the word is that his advisers and executives are divided over that particular campaign pledge.

For ConocoPhillips and Exxon—as well the non-U.S. oil and gas heavyweights; BP, Royal Dutch Shell, Eni, Total, and Statoil—backing the Paris Agreement is not just riding the trend of increasingly environmentally-conscious businesses.  Those companies with operations all over the world stand to benefit from the Paris Agreement because the nations’ efforts to cut carbon emissions will lead to transitioning from coal-fired plants to gas-fired plants.  And natural gas is quite a substantial portion of all those majors’ businesses, investments and profits.

So it’s no wonder that Big Oil has pledged US$1 billion over the next ten years to fighting climate change under the Oil and Gas Climate Initiative that includes BP, CNPC, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil, and Total.

Although U.S. companies are not part of that initiative, Exxon and ConocoPhillips have identified opportunities in the global climate change actions. ConocoPhillips says that it sees opportunities and value in lower carbon emission energy in its existing business of natural gas exploration and production.
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In his first blog post on the company website, Exxon’s new chairman and CEO Darren Woods said a national revenue-neutral carbon tax would be good, and that his company was encouraged:

“The pledges made at last year’s Paris Accord create an effective framework for all countries to address rising emissions”.  Of course, he singled out natural gas as one of the “powerful tools for meeting global energy demand while reducing emissions”.

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