One afternoon, when I was about nine years old, I was standing in the garden with my younger brother trying to blow bubbles. We didn’t have any store-bought bubble mix, so we held a tall drinking glass with a solution I’d made from a recipe of dish soap, water, and a bit of sugar. We used straws to blow the bubbles, without much success.
A neighbor down the street, a girl about my age, came over and asked what we were doing. I explained that we were trying to make bubbles with homemade bubble mix. She said it tasted like drinking it, and for some reason I decided to convince her that it didn’t taste that bad because it had sugar in it. She didn’t believe me, so I insisted it was pretty good and pretended to drink a little while glancing at my brother to shut him up. I handed Hannah a straw.
To my lasting surprise and dismay, Hannah not only tasted the bubble mix, she took a big sip through the straw, took on a sickly green hue, and finally threw up on the lawn. I ran inside for help and got into a lot of trouble. The consequences followed.
During my hours and days of home confinement, I’ve theorized about different variations of this encounter, and in particular one in which someone leaves a bottle of bubble mix (or poison) in a public park. Who is to blame if a passerby picks it up and drinks? I finally concluded that (a) the bottle should be sealed well enough, so that only a determined adult could open it; and (b) the bottle should be clearly identified with a graphic skull and crossbones. If both were true, then was the depositor of the bottle still at fault if someone drank from it and got sick? And would it matter if the bottle was left in a public park rather than somewhere else? Or if the passerby got really sick from just a stomach ache?
These dilemmas came back to me this week as I reflected on the responsibility of oil and gas companies for their past and current role in climate change. When there is evidence that they suppressed or downplayed the science of climate change in order to grow their business, the case against them seems pretty clear. But if they didn’t indulge in misinformation or misinformation, and simply provided their product to those who asked for it, should they still be held accountable? And does it matter whether it’s a retrospective apology or a forward-looking justification?
Last month, Chevron’s chief financial officer, Pierre Breber, was interviewed for the Dean’s Speaker Series at the Haas School of Business in Berkeley. Breber explained that Chevron continues to invest in its traditional oil and gas business while also investing in clean technology. “We’re going to have a traditional business that’s going to be very low carbon (1), but it’s going to meet society’s demand, which we don’t know what it’s going to be. Then we will have a new, faster growing energy business. And we don’t think we have to choose one or the other, we think we can do both. And then depending on the pace of the energy transition, the speed of the two and the size of the two can vary.
According to its description, Chevron is a passive market player, simply responding to customer demand and investor interest. (2)
The Dean and several of the students challenged him to this position. Reports from the IPCC and the International Energy Agency (IEA) indicate that investment in fossil fuels must fall rapidly in order to avoid the worst impacts of climate change and achieve net zero by 2050. Breber’s response was to reiterate that Chevron is simply responding to demand: “Demand for our products is increasing, not decreasing. And that’s partly because it’s 7.5 billion people, we’re going to go to 9 billion people. Hundreds of millions of people, hopefully billions, are going to be lifted out of poverty, into a higher standard of living, closer to the standard of living that we have, and that takes energy. (3)
He encouraged everyone to read the American Petroleum Institute report Climate Action Framework, which argues that even in 2040 nearly half of our energy will come from oil and gas. (4)
Source: American Petroleum Institute Climate Action Framework
The students kept pushing back, insisting on a better future for themselves and their children. One pointed out that we are acting very late on climate change and suggested that Chevron and the American Petroleum Institute and other fossil fuel companies bear the blame because of delay campaigns and of denial that have lasted for decades. So oil and gas companies should take more responsibility to get us out of this mess. Breber again asserted Chevron’s passive role: “I don’t accept your premise that we caused this. We provide the energy we need today. We will provide the energy we need tomorrow.
The rafter is using this same defense in a lawsuit in Hawaii, denying financial responsibility for the climate effects suffered by the inhabitants. Chevron argues that everyone has known about climate change for decades and they are not responsible for the choices people make. “Members of the public – including the media and government officials – had plenty of data with which to make informed political and personal decisions.”
So does that mean it’s okay to put a bottle of poison on a public park bench as long as it’s clearly marked? “Quench your thirst but make you sick – you decide!” It never occurred to my younger self to consider the case of a company distributing these bottles to hundreds of parks and profiting from them. And yet we have cigarettes. We continue to allow companies to produce and sell cigarettes despite their adverse health effects. Over time, we have required warning labels on packaging, and in 2023 we may have the more graphical warnings shown below. But the tobacco companies themselves have shown little interest in weaning people off their products and we do not insist that they do so.
Chevron is aware of the harm (and good) that results from the consumption of its products and rejects any suggestion that it should be responsible for driving the energy market away from fossil fuels. A student who worked as a consultant for oil and gas companies said he was surprised and frustrated by their low adoption of clean technologies. He asked what Chevron was doing specifically to accelerate its customers’ transition to clean energy, given that the world needs to do this and Chevron has tremendous leverage. Breber’s frothy response was unconvincing: “Everyone is working on it. Last year, around the same time, we put a full focus on the energy transition. We only talked about our energy transition strategy. So that’s something that’s really key to winning back investors…. It will take a lot of talent, a lot of companies, a lot of solutions. If it was easy, it would have been done. »
The student’s question stuck with me. Given where we are now and all we know about how we got here and what the future holds, shouldn’t oil and gas companies use their position and influence to accelerate the transition rather than spending their time and money challenging their right not to care? Breber spoke of the need “to balance our fiduciary responsibility to our shareholders who are…teachers, firefighters and people saving for retirement.” But what about the lives of the children and grandchildren of these teachers and firefighters?
It seems cowardly for oil and gas companies like Chevron to subject their moral compass to the machinations of the markets. But that’s too often how America works. The dollar determines our code of conduct and when we don’t price externalities properly, we end up with unhealthy levels of trade. We’ve been delaying an update to the social cost of carbon, which obviously should be two or even three times higher than it is today. Will such a change, if any, be enough to accelerate investment and encourage real leadership from Chevrol? Or are we just going to be dragged through the courts once again?
What do you think of Chevron’s role and responsibilities in the clean energy transition?
Notes and References
1. By “ultra-low carbon,” Breber refers to Chevron’s goal to reduce the carbon intensity of its fossil fuels by 35% from 2016 levels by 2028. It may be more accurate to consider this as “relatively weak” rather than “very slow”.
2. Breber explained that they are pursuing the clean energy path because their customers demand it for their own net zero goals, and investors are looking ESG options.
3. He observed that many sectors are difficult to electrify, which he says means continued demand for oil and gas. When a student pointed out that clean hydrogen can work for many of these sectors, he replied, “You’re right, hydrogen can work for a lot of these heavy sectors, that’s why we go there. are, but there is not much wind and solar.
4. The American Petroleum Institute chart is based on a 2018 IEA report that sees us reaching net zero by 2070. While the science of global warming and its impacts has advanced in recent years, the IEA has published a more recent report calling for a “critical but formidable” roadmap to net zero by 2050. In this roadmap, fossil fuels drop to just 35% of our energy in 2040 and 22% by 2050.
Current climate data (September 2022)
Global impacts, American repercussions, CO2 Metric, Climate Dashboard
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