Has Big Oil changed? | FT Film
The US fossil fuel industry has been accused of using lobbying and disinformation to prevent action on climate change. And with the climate emergency, the war in Ukraine, and the global energy crisis, Big Oil is under pressure as never before. The FT looks at changing attitudes towards the industry and asks if it has changed
Produced, reported, filmed and edited by Gregory Bobillot. Additional filming by James Sandy. Graphics by Russel Birkett. Data for charts provided by Federica Cocco. Colour grading by Lloyd Barnes.
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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 proof that carbon emissions were essentially contributing to global warming.
We live in a petroleum era. And the company is at the centre of the oil industry that constitutes 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 Ame,rica 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 that they're hostile to efforts to control climate change. But they have decades of lobbying against these rules to overcome.
And 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 the industry really got going by John D Rockefeller. 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 of 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 Mobil and these huge companies.
Heat, mobility, mechanised 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 70s, 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 we're 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 is on fire.
How dare you continue to look away.
Thousands of companies have already recognised 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, 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 and 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. 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. And they're buying gasoline from wherever they can. They're usually owned by a local family. But there are 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 dreamed of making. And they are making more money now than they burnt through during a decade of debt fuelled 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 capitalised on that tragedy to lock in a huge amount of 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. You could end that lobbying.
The American political system is filthy in every sense, in 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 capital. 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 $2.6bn on lobbying and ranked sixth among all industries.
Look, of course there's lobbying efforts. And 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. A highly competitive marketplace is good for the little guys, for big guys. A harder to get into industry is may be advantageous.
The other side of the influence buying coin to lobbying is campaign contributions. Political contributions are investments usually in incumbent policymakers, legislators. In the first 21 months of the 2022 election cycle, oil and gas has spent more than $150mn, 68 per cent of that favouring Republican candidates and parties. Over time, back to 1989, they've spent more than $1.6bn on political donations.
The largest organisation 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 organisation 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 group 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.
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 for us?
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.
...can raise prices.
That could really hurt folks on a fixed income like your mum.
They are trying to readjust that impression now, and they're trying to change the impression from the general public that 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 realising 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 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. And 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.
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 greenwash the product that is very, very problematic concerning amount of climate change.
Yeah, 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 then 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 that oil production. And their strategy revolves more around producing oil, but trying to reduce the emissions from this oil. So what you hear from them is that oil isn't the problem. The emissions are the problem.
Carbon capture, hydrogen, algae - they emphasise 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 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. I mean, 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 arisen in Western economies, as long as we're 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 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 the big oil companies.
If anyone thinks that Big Oil is going to suddenly implode, 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 shrinkage as, effectively, oil and gas companies are forced or encouraged to put more and more emphasis onto renewables-- but as, also, the world becomes more energy-efficient and better at using the supplies we have in a much more effective way.