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‘Climate Arsonists’: 8 Major Oil Companies Fail to Align With Paris Agreement

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Original article by OLIVIA ROSANE republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

An ExxonMobil oil refinery is pictured in Baton Rouge, Louisiana. (Photo: Barry Lewis/InPictures via Getty Images)

“We cannot trust fossil fuel corporations to do anything but line the pockets of their CEOs and investors at the cost of our climate and communities,” one campaigner said.

The eight largest U.S. and Europe-based oil and gas producing companies are failing to align their plans with the Paris agreement goal of limiting global heating to 1.5°C above preindustrial levels and avoiding ever more catastrophic climate impacts.

Oil Change International’s Big Oil Reality Check report, released Tuesday, concludes that the plans of BP, Chevron, ConocoPhillips, Eni, Equinor, ExxonMobil, Shell, and TotalEnergies would actually put the world on track for more than 2.4°C of warming and burn through nearly one-third of the global carbon budget for hitting the 1.5°C target.

“It’s clearer than ever that oil and gas companies—the climate arsonists fueling climate chaos—cannot be trusted to put out the fire,” David Tong, report author and global industry campaign manager at Oil Change International, said in a statement. “There is no evidence that big oil and gas companies are acting seriously to be part of the energy transition.”

“The Big Oil Reality Check report reveals that oil and gas corporations are more interested in looking like they are acting on climate change than actually acting on climate change.”

For its fourth annual Big Oil Reality Check, Oil Change International judged the oil companies’ climate plans and pledges against a set of minimum standards for alignment with the Paris agreement. The standards were divided into three main categories: ambition, integrity, and people-centered transitions.

Under ambition, the companies were assessed on whether they had plans to stop oil and gas exploration, stop approving new extraction projects, decrease production every year through 2030, and stop extraction on a certain date while outlining a long-term plan to end production.

Under integrity, the companies were assessed on whether their emissions-reduction plans included their entire supply chain, whether they relied on carbon capture or offsets, whether their methane-reduction plans were really in line with climate goals, and whether they lobbied or advertised against climate action.

For people-centered transitions, they were assessed on whether they had just transition plans for employees and members of frontline communities and whether they respected human rights overall and the rights of Indigenous peoples, including to free, prior, or informed consent to any fossil fuel activities.

The companies were then rated from “fully aligned” to “grossly insufficient” for how well their plans complied with the Paris goals within the assessment’s framework, but all eight companies scored “insufficient” or “grossly insufficient” for a majority of the criteria.

Only one company—Eni—scored above “insufficient” in any category, earning a ranking of “partially aligned” for having greenhouse gas-reduction plans that included its supply chains. The three U.S.-based companies—Chevron, ConocoPhillips, and ExxonMobil—scored “grossly insufficient” for all 10 criteria.

“American fossil fuel corporations are the worst of the worst,” Oil Change International’s U.S. program manager Allie Rosenbluth said. “Chevron, ExxonMobil, and ConocoPhillips perpetuate harm in frontline communities not only across the U.S. but worldwide.”

Oil Change found that six out of the eight companies have official plans to increase oil and gas production. The only two that did not were BP and Shell; however, these companies employ a misleading strategy. They compensate for new oil and gas projects by selling off polluting assets. While the emissions from the sold operations no longer count toward company emissions, they still count toward the planet’s total. This practice is out of line with the GHG Protocol on corporate emissions accounting and may violate the United Nations Guiding Principles on Business and Human Rights.

Four of the companies assessed in the report—BP, Shell, Exxon, and Chevron—were also the subject of a recent U.S. House investigation and Senate hearing detailing how the fossil fuel industry playbook has shifted from outright denial of climate science to greenwashing its activities by presenting itself as part of the solution to the climate crisis while its day-to-day operations continue to raise global temperatures.

“The efforts of climate and social movements have forced oil and gas companies to acknowledge that fossil fuels are dirty and dangerous, leading to a variety of climate pledges and ‘plans,'” said Oil Change campaigner Myriam Douo. “The Big Oil Reality Check report reveals that oil and gas corporations are more interested in looking like they are acting on climate change than actually acting on climate change.”

“They spend billions on smoke and mirrors to try to fool us into believing they have solutions for a livable planet when, in reality, they are perpetuating harm to the climate and local communities while trying to suck every last ounce of profit out of their dirty fossil fuel business,” Douo concluded.

All told, Rystand energy data suggests that the combined production of the eight companies will be 17% by 2030 than they were last year.

“Such an increase in production on a global scale would put the world on a path towards global heating well beyond 2°C, locking in destruction of vulnerable communities and ecosystems,” the report authors wrote.

The report finds that all of the companies intend to rely on unproven carbon capture technology or offsets schemes to meet their claimed emission-reduction goals and have continued to spend money on lobbying against climate action and greenwashing their own activities since the agreement in Paris.

Further, no company has plans consistent with ensuring a just transition or protecting human rights. In one recent and urgent example, ExxonMobil, Chevron, TotalEnergies, BP, Shell, and Eni all continue to provide Israel with crude oil despite “the Israeli military’s ongoing assault on Palestinian civilians, ecosystems, and infrastructure in Gaza and mounting evidence of war crimes,” a March Oil Change investigation found.

The report comes nearly half a year after world leaders agreed to contribute to “transitioning away from fossil fuels” at the COP28 U.N. climate change conference in Dubai. In light of its conclusions, Oil Change called on governments to take action to further a just transition:

  1. Stop permitting or approving new fossil fuel projects or infrastructure;
  2. Set a Paris-aligned date for phasing out fossil fuel production;
  3. End subsidies and financing for fossil fuels and false solutions like carbon capture;
  4. Use tax policy to incentivize against investing in fossil fuels;
  5. Craft a just transition, including by making polluters pay for cleanup and reparations; and
  6. Passing laws to protect human rights and Indigenous rights and giving communities a legal mechanism to seek redress from corporate polluters.

Oil Change also argued that governments in the Global North should hold companies headquartered within their borders accountable for harm abroad and put money into funds to enable the Global South to transition to renewable energy, adapt to climate change, and pay for inevitable loss and damage.

“This year’s Big Oil Reality Check makes it clearer than ever—we cannot trust fossil fuel corporations to do anything but line the pockets of their CEOs and investors at the cost of our climate and communities,” Rosenbluth said. “People around the world are rising up to end the era of fossil fuels and build a just energy system that puts climate and communities first.”

Original article by OLIVIA ROSANE republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

Continue Reading‘Climate Arsonists’: 8 Major Oil Companies Fail to Align With Paris Agreement

BP and Shell ‘Shaped’ UK Carbon Tax Proposals, Private Emails Show

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Original article by Adam Bychawski republished from DeSmog

Prime Minister Rishi Sunak at the 2023 Policy Exchange summer reception. Credit: Policy Exchange / YouTube

Internal documents expose how oil and gas majors were given the chance to influence a report by the Policy Exchange think tank.

Fossil fuel giants BP and Shell were given “ample opportunity” to privately influence proposals for taxing oil and gas companies that were later backed by the government, new documents reveal.

Internal BP emails show that its UK executives were reassured by a controversial oil industry group that they could “shape [the] internal thinking” of a 2018 report on carbon taxes produced by the right-wing think tank Policy Exchange.

The emails were among hundreds of documents released by a powerful committee of U.S. politicians last week as part of its three year-long investigation into how the oil industry has worked to undermine efforts to tackle climate change.

Policy Exchange has been credited by Prime Minister Rishi Sunak for helping to draft laws that have cracked down on climate protests, and has in the past received money from the oil and gas major ExxonMobil. 

The think tank was commissioned to produce a report on carbon pricing by the Climate Leadership Council (CLC), a controversial U.S. non-profit whose “founding members” include BP, Shell and TotalEnergies, car manufacturers Ford and General Motors as well as multinationals like Unilever and Microsoft. 

The think tank’s recommendations largely mirrored the CLC’s proposal for a rising tax on carbon emissions, a controversial idea that has been accused of being a favoured policy of the fossil fuel industry. The report also proposed that several UK environmental regulations be phased out to reduce the “burden on business.”

The UK has taxed carbon emissions since 2005, first under an emissions trading scheme created by the European Union. 

The scheme works by setting a maximum overall cap on the amount of carbon emissions that the energy and manufacturing industry can emit. Polluters are given allowances that allow them to emit only a set quota of carbon; if they exceed their allowances they can be fined. To avoid being fined, companies can buy additional allowances from other companies who have excess allowances because their emissions are lower than their quota. 

Every year, the EU reduces the overall cap on emissions, meaning that the price of allowances – also known as a carbon price – rises, which the bloc says acts as an incentive to reduce emissions.

However, according to Bill McGuire, professor emeritus of geophysical and climate hazards at UCL, the policy is popular among oil and gas companies.

“Paying a carbon tax is preferable to stopping all exploration, keeping fossil fuels in the ground and changing business models to embrace renewables – which is what is required – and they have obviously come to the conclusion that, given their colossal profits, this is something they can easily handle,” he said.

After the UK left the EU in 2016, the UK government began devising its own replacement trading emissions scheme, which the Policy Exchange report sought to influence. 

The report was cited last December in a policy paper for the government’s new, long-term emissions trading scheme, used to justify the claim that “Carbon pricing is an effective, market-based way of allowing businesses to make economically rational decarbonisation investment decisions.”

Policy Exchange acknowledged at the time that the report was financially supported by the CLC, which claimed to be a “strategic partner”. However, the think tank said it was “not intended to represent the views of the council or of its founding members on UK or EU matters.”

Internal BP emails reveal that the British oil company’s bosses were initially alarmed that the CLC had commissioned the report and sought a meeting with the council’s founder.

According to the emails, BP was able to use this meeting to lay out “various potential policy, political and commercial concerns” with the content of the report, given the firm’s “unique position in the UK and the timing.”

After the meeting, Paul Jefferiss, then BP’s head of group policy, reassured Andrew Mennear, BP’s director for UK government affairs, that “I don’t think there is immediate cause for concern.”

Jefferiss noted that, “There will be ample opportunity for UK-focused CLC members (BP, Shell, Unilever) to input perspectives and shape the internal thinking” of the report before it is published. 

BP also appears to have been offered the chance to collaborate with the council on a communications strategy around its release.

Jolyon Maugham, director of the Good Law Project, said: “While the BBC launders Policy Exchange as ‘centre right’, and the charities so-called regulator sits on its hands, the revealed reality is that Policy Exchange is acting like a front for the oil and gas industry.”

Policy Exchange, the CLC, and BP have been approached for comment. 

‘Another Form of Greenwashing’

Climate experts are divided over whether the policy of taxing carbon is effective, and past scandals have led to accusations that it is being used as a smokescreen by the fossil fuel industry.

McGuire believes that a carbon tax is “ultimately just another form of greenwashing and a sop to the [oil] sector’s critics”.

However, other experts, like Adam Bell, director of policy at consultancy firm Stonehaven and a former head of strategy at the Department for Business, Energy and Industrial Strategy, believe that carbon taxing can be effective.

“Carbon pricing can only be part of a policy approach to tackling climate change, it can’t be the solution by itself. Fossil fuel companies will survive while there is demand for what they produce. You’ve got to eliminate that demand if you want to eliminate them”.

To do that, you should “focus on getting renewables built and heat systems and transportation electrified,” he said.

The CLC has led calls for a federal carbon price in the U.S. and has attracted criticism in the past for attaching conditions to its proposals that would be favourable to the fossil fuel industry. It has previously proposed the repealing of federal emissions regulations, the Environmental Protection Agency (EPA) losing its authority to regulate carbon emissions, and legal immunity for companies from any prosecution over their role in climate change.

The CLC dropped the latter provision from its proposal in 2019 because it was “distracting focus away from the many economic and environmental upsides of the plan”, but critics have questioned whether it remains privately committed to the idea.

In 2021, the CLC “suspended” Exxon from its list of founding members after one of its lobbyists was caught on camera saying that the oil company had only pledged to support a carbon tax because it was unlikely to ever become law.

Policy Exchange’s report likewise proposed that some environmental regulations “be phased out thus reducing the regulatory burden on business” after the introduction of a carbon tax, though it claimed that “this will in no way reduce environmental protection”.

In an afterword to the report, CLC’s founder Ted Halstead, and Martin Feldstein and George P. Shultz, two economists who served under Ronald Reagan’s administration, wrote that the plan “will help free businesses from unnecessary regulation”.

Steve Tooze, a spokesperson for Extinction Rebellion said, “These emails are the smoking gun that blows fatal holes in Policy Exchange’s already-tattered and frankly laughable claims to be an independent research ‘think tank’”.

Policy Exchange

At the 2022 Conservative Party conference, Jacob Rees-Mogg, at the time serving as business, energy and industrial strategy secretary, said: “I believe that where Policy Exchange leads, governments have often followed.”

The think tank, which has charity status, chooses not to disclose its donors and was given the lowest possible rank by openDemocracy’s Who Funds You? project, which rates the funding transparency of think tanks.

OpenDemocracy previously uncovered that Exxon donated $30,000 to Policy Exchange’s American fundraising arm in 2017, the same year its UK carbon pricing report was being drafted.

The think tank would go on to author a report in 2019 that proposed tough new policing laws to crackdown on climate protestors. Rishi Sunak later credited Policy Exchange for helping the government draft what would become the Police, Crime, Sentencing and Courts Act, which explicitly targeted groups like Extinction Rebellion.

Sunak is an alumni of Policy Exchange, having worked there before his 2015 election to Parliament, as is Claire Coutinho, his energy security and net zero secretary. The think tank has significant access to ministers, having held more than a hundred meetings with the government since 2012.

DeSmog revealed in August 2023 that Policy Exchange engaged in a high-level influencing campaign over the UK’s North Sea oil and gas policies, and echoed the fossil fuel lobby by emphasising the importance of hydrogen power and carbon capture utilisation and storage (CCUS) to the green transition.

The evidence unearthed by U.S. politicians has further demonstrated how fossil fuel giants have been downplaying the climate crisis and lobbying against green laws, despite being provided with academic research showing the scale of the problem.

BP was warned by Princeton University researchers in 2016 that climate change accelerated in part by new global supplies of shale gas could lead to catastrophic events such as “mass extinctions and unprecedented famine.” 

Yet, despite acknowledging internally the concern that “gas doesn’t support climate goals,” the firm embarked on a marketing campaign to “advance and protect the role of gas – and BP – in the energy transition.”

Original article by Adam Bychawski republished from DeSmog

Rishi Sunak on stopping Rosebank says that any chancellor can stop his huge 91% subsidy to build Rosebank, that Keir Starmer is as bad as him for sucking up to Murdoch and other plutocrats and that we (the plebs) need to get organised to elect MPs that will stop Rosebank.
Rishi Sunak on stopping Rosebank says that any chancellor can stop his huge 91% subsidy to build Rosebank, that Keir Starmer is as bad as him for sucking up to Murdoch and other plutocrats and that we (the plebs) need to get organised to elect MPs that will stop Rosebank.
Image of InBedWithBigOil by Not Here To Be Liked + Hex Prints from Just Stop Oil's You May Find Yourself... art auction. Featuring Rishi Sunak, Fossil Fuels and Rupert Murdoch.
Image of InBedWithBigOil by Not Here To Be Liked + Hex Prints from Just Stop Oil’s You May Find Yourself… art auction. Featuring Rishi Sunak, Fossil Fuels and Rupert Murdoch.
Continue ReadingBP and Shell ‘Shaped’ UK Carbon Tax Proposals, Private Emails Show

Fossil Fuel Giants to Lavish Shareholders With Record Paydays as Climate Crisis Deepens

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Original article by JULIA CONLEY republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

Greenpeace activists display a billboard during a protest outside Shell headquarters on July 27, 2023 in London.  (Photo: Handout/Chris J. Ratcliffe for Greenpeace via Getty Images)

“The global energy crisis has been a giant cash grab for fossil fuel firms,” said one campaigner. “And instead of investing their record profits in clean energy, these companies are doubling down on oil, gas, and shareholder payouts.”

The year 2023 was marked by weather events that made it increasingly clear that the Earth has entered what United Nations Secretary General António Guterres called the “era of global boiling,” with wildfires and prolonged heatwaves impacting millions of people and scientists confirming their suffering was the direct result of fossil fuel extraction and planetary heating.

But for the world’s five largest oil giants, the year marked record profits and the approval of several major new fossil fuel projects, allowing the companies to lavish their shareholders with payouts that are expected to exceed $100 billion—signaling that executives have little anxiety that demand for their products will fall, said one economist.

The companies—BP, Shell, Chevron,ExxonMobil, and TotalEnergies—spent $104 billion on shareholder payouts in 2022, and are expected to reward investors with even more in buybacks and dividends for 2023, The Guardian reported.

Shell announced plans in November to pay investors at least $23 billion—more than six times the amount it planned to spend on renewable energy projects—while BP promised shareholders a 10% raise in dividends and Chevron could exceed the $75 billion stock buyback it announced early last year.

Alice Harrison, a campaigner for Global Witness, noted that fossil fuel shareholders will be enjoying their paydays as households across Europe struggle with fuel poverty and the world faces the rising threat of climate disasters brought on by the industry.

“The global energy crisis has been a giant cash grab for fossil fuel firms,” Harrison told The Guardian. “And instead of investing their record profits in clean energy, these companies are doubling down on oil, gas, and shareholder payouts. Yet again millions of families won’t be able to afford to heat their homes this winter, and countries around the world will continue to suffer the extreme weather events of climate collapse. This is the fossil fuel economy, and it’s rigged in favor of the rich.”

In 2023 campaigners intensified their demands for accountability from the oil, gas, and coal industries, and as of last month had successfully pressured more than 1,600 universities, pension funds, and other institutions to divest from fossil fuels. In the U.S., provisions in the Inflation Reduction Act, which has been touted as the “largest investment in climate and energy in American history,” went into effect.

But Dieter Helm, a professor of economic policy at the University of Oxford, The Guardian that if the industry were truly fearful of policymakers phasing out fossil fuel extraction and expediting a transition to renewable sources, they would be spending far less on new projects and shareholder payouts.

“For this to be the case you would have to believe that the energy transition is happening, and that demand for fossil fuels is going to fall,” Helm told The Guardian.

In 2023, U.S. President Joe Biden infuriated climate campaigners by approving the Willow oil drilling project in Alaska, which could lead to roughly 280 million metric tons of heat-trapping carbon dioxide emissions. His administration also included in a debt limit deal language that would expedite the approval of the Mountain Valley Pipeline, which could emit the equivalent of more than 89 million metric tons of carbon dioxide, while the U.K. government greenlit a massive oil drilling field in the North Sea and French company TotalEnergies continued to construct the 900-mile-long East African Crude Oil Pipeline, which would transport up to 230,000 barrels of crude oil per day.

“These companies are investing a huge amount in new projects, and they’re handing out bigger dividends because they are confident that they’re going to make big returns,” Helm said. “And when we look at the state of our current climate progress, who’s to say they’re wrong?”

Climate campaigner Vanessa Nakate pointed out that the shareholder paydays are expected following a deal on a loss and damage fund at the 28th annual United Nations Climate Change Conference, aimed at helping developing countries to fight the climate emergency. That fund was hailed as “historic” and included a commitment of $700 million from wealthy countries—a sum that is expected to be dwarfed by fossil fuel investors’ profits.

“They have picked people’s pockets, fueled inflation and pollution, and deepened poverty,” U.K. House of Lords member and Tax Justice Network co-founder Prem Sikka said of the oil giants. “Governments do nothing to end their monopolistic control. Need to break-up this cartel.”

Original article by JULIA CONLEY republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

Continue ReadingFossil Fuel Giants to Lavish Shareholders With Record Paydays as Climate Crisis Deepens

Fossil Fuel Firms ‘Building Bridge to Climate Chaos’

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North Sea oil rigs in Cromarty Firth, Scotland. Credit: joiseyshowaa (CC BY-SA 2.0)
North Sea oil rigs in Cromarty Firth, Scotland. Credit: joiseyshowaa (CC BY-SA 2.0)

Original article by JAKE JOHNSON republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

An updated database shows that more than 1,000 oil and gas companies around the world are planning to expand their planet-wrecking infrastructure.

More than a thousand fossil fuel companies around the world are currently planning to build new liquefied natural gas terminals, pipelines, or gas-fired power plants even as scientists warn that fossil fuel expansion is incompatible with efforts to prevent catastrophic warming.

That’s according to an updated database released Wednesday by Urgewald and dozens of partner groups. Described as the most comprehensive public database on the fossil fuel industry, the Global Oil & Gas Exit List (GOGEL) covers 1,623 companies that are operating in the upstream, midstream, or gas-fired power sector and collectively account for 95% of global oil and gas production.

More than a thousand fossil fuel companies around the world are currently planning to build new liquefied natural gas terminals, pipelines, or gas-fired power plants even as scientists warn that fossil fuel expansion is incompatible with efforts to prevent catastrophic warming.

That’s according to an updated database released Wednesday by Urgewald and dozens of partner groups. Described as the most comprehensive public database on the fossil fuel industry, the Global Oil & Gas Exit List (GOGEL) covers 1,623 companies that are operating in the upstream, midstream, or gas-fired power sector and collectively account for 95% of global oil and gas production.

According to the 2023 GOGEL, 96% of the 700 upstream oil and gas companies in the database are exploring or actively developing new oil and gas fields, projects that Urgewald said “severely jeopardize efforts to limit global temperature increase to 1.5 °C.”

Nearly 540 companies in the database are collectively planning to produce 230 billion barrels of oil equivalent (bboe) over the short term, the database shows.

“The seven companies with the largest short-term expansion plans are Saudi Aramco (16.8 bboe), QatarEnergy (16.5 bboe), Gazprom (10.7 bboe), Petrobras (9.6 bboe), ADNOC (9.0 bboe), TotalEnergies (8.0 bboe) and ExxonMobil (7.9 bboe),” Urgewald noted. “These seven companies are responsible for one-third of global short-term oil and gas expansion.”

The database also shows that fossil fuel companies are planning to expand global LNG capacity by 162%, a significant threat to critical climate targets. A United Nations-backed report published last week warned that fossil fuel expansion plans are “throwing humanity’s future into question.”

Urgewald pointed specifically to the LNG boom in the U.S., which the group said is “cementing its position as the world’s largest export hub for LNG” with 21 new export facilities planned along the Gulf Coast. Those facilities account for more than 40% of worldwide LNG expansion documented in the GOGEL database.

“Most of the fossil gas that will be exported from these terminals stems from the Permian Basin, the heart of the U.S. fracking industry,” Urgewald observed.

The updated database shows that nearly 80 companies—including Exxon, Chevron, and BP—are currently operating in the Permian Basin, located in the U.S. Southwest.

Climate campaigners and experts have also sounded alarm over Calcasieu Pass 2 (CP2), a planned $10 billion LNG export hub that would ship up to 24 million tons of gas annually once it is completed.

“The fossil fuel industry wants to pave undeveloped wetlands all along the coast with LNG facilities like NextDecade Corporation’s Rio Grande LNG Terminal, Rebekah Hinojosa, a member of the South Texas Environmental Justice Network said Wednesday. “Besides their environmental implications, these plans violate Indigenous sacred lands, and people working in fishing, shrimping, and eco-tourism risk losing their jobs. Our communities refuse to be sacrificed for the fracking industry’s dirty gas exports.”

Original article by JAKE JOHNSON republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

Continue ReadingFossil Fuel Firms ‘Building Bridge to Climate Chaos’

Revealed: The Oil and Gas Lobbying Campaign to Water Down Windfall Tax

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Original article by Adam Barnett republished from DeSmog.

Industry figures held more than 200 meetings with key politicians in the year following Russia’s 2022 invasion of Ukraine, new research finds.

Prime Minister Rishi Sunak tours a Shell gas plant in Aberdeen in July 2023. Credit: Number 10 (CC BY-NC-ND 2.0)
Prime Minister Rishi Sunak tours a Shell gas plant in Aberdeen in July 2023. Credit: Number 10 (CC BY-NC-ND 2.0)

The UK government’s weakening of its windfall tax on energy profits matched the demands of a high-level lobbying campaign by the oil and gas industry, new research reveals. 

Trade body Offshore Energies UK (OEUK), formerly Oil and Gas UK, and its operator members including BP, Shell, ExxonMobil, TotalEnergies, and Equinor, met with ministers at least 210 times in the 12 months following Russia’s 2022 invasion of Ukraine.

The meetings – which include in-person talks with the then Business and Energy Secretary Kwasi Kwarteng and his minister Greg Hands (now the Conservative Party chairman) – are revealed in research by Fossil Free Parliament (FFP), a group campaigning against fossil fuel influence on UK politics. 

They form part of a lobbying blitz by fossil fuel firms against the windfall tax, conducted through meetings, drinks receptions, letters, parliamentary groups, and a “fiscal forum” with the Treasury attended by the then chancellor (and now prime minister) Rishi Sunak. 

The evidence, published in a briefing today (October 24) and shared exclusively with DeSmog, indicates that certain changes requested by the oil and gas industry were accommodated by the government when developing the scope of the levy.

It comes as Sunak faces criticism for delaying some net zero targets and granting 100 new North Sea oil and gas licences, including Equinor’s Rosebank project. As DeSmog reported in March, the Conservative Party received £3.5 million from fossil fuel and polluting interests in 2022. 

A spokesperson for OEUK defended its contact with the government: “We will always champion our industry to all parliamentarians on a cross-party basis and do so in an open and transparent manner.”

Caroline Lucas, Green Party MP for Brighton Pavilion, described the research as “shocking”.

“Fossil fuel giants have been committing countless climate crimes, polluting our planet and reaping obscene profits – while everyone else faces sky-high energy bills and a cost of living scandal,” she told DeSmog. 

“This research reveals the extent to which the dirty fossil fuel lobby has been aided and abetted by this Tory government – taking their donations, offering privileged access, and handing over staggering tax breaks and subsidies to carry out yet more climate-wrecking damage.”

Windfall Tax ‘Loophole’

The Energy Profits Levy, known as the windfall tax, was announced by the government in May 2022 to tax energy companies’ billions in excess profits due to the global price spike fueled by Russia’s February 2022 invasion of Ukraine. 

Then chancellor Sunak said the windfall tax would raise around £5 billion over the next year to help with cost of living. However, when the levy was passed in July 2022, it included a loophole where companies received 91p tax relief for every pound they invest in UK extraction, in what the independent Institute of Fiscal Studies called a “huge tax subsidy” for energy companies. 

As of September 2023 the windfall tax had raised £2.6 billion, just over half of what was promised, and following a year of record profits by five oil majors. Between them, Chevron, ExxonMobil, Shell, BP and TotalEnergies made a total of £195 billion in profits last year. 

The new research indicates this ‘loophole’ came about following a surge in meetings and lobbying between OEUK and its member companies with the government, 

In June 2022, the month the windfall tax was being consulted on and drafted, meetings between the government and OEUK and its members nearly doubled from 15 to 29, according to the new research. 

In the same month, OEUK also wrote letters to Sunak warning the proposed windfall tax would have a negative impact on oil and gas investments in the UK. The letters also called for an emergency summit, including a meeting of the “fiscal forum”, a talking shop between the industry and the Treasury. OEUK describes the fiscal forum as a tool for “facilitating coherent engagement with government authorities to drive the policy agenda”. 

On 20 June, the day before the consultation’s launch, the British Offshore Oil and Gas Industry All-Party Parliamentary Group (APPG), which is co-run by OEUK, held a summer reception at the Houses of Parliament. The reception saw speeches from Conservative MP Peter Aldous, the APPG’s chair, and Greg Hands, then a minister in the Department for Business, Energy and Industrial Strategy. 

At the reception, OEUK’s then chief executive Deirdre Michie gave a speech claiming the windfall tax could “undermine and disrupt” energy investment at a time when the UK needs to focus on “energy security and working for net zero”. 

Three days later, Sunak, Hands and exchequer secretary Helen Whately attended an “Oil and Gas Roundtable”. The meeting, also known as a fiscal forum, was held in Aberdeen, Scotland, with OEUK and members including BP, Shell, Equinor, and TotalEnergies. According to a 28 June letter from Michie, the meeting discussed the “negative impact” of the windfall tax “on investor confidence”, while companies warned of its “damage to the UK’s competitiveness”. 

Michie wrote: “While we remain disappointed at the decision to create the EPL [Energy Profits Levy], OEUK and our members want to work constructively with you to help rebuild investor confidence and ensure that the EPL is designed and implemented thoughtfully and is fit for purpose.”

OEUK’s concerns appear to have been taken into account by the government. 

For example, in Michie’s 28 June letter she insisted that the windfall must tax end in 2025: “Industry needs certainty that the EPL will be terminated by the end of 2025 at the latest and we would hope that ministerial statements will continue to reinforce the timebound nature of the EPL.” A deadline of 31 December 2025 was later included in the EPL bill. 

Michie’s letter also requested that the windfall tax should not apply to the Petroleum Revenue Tax (PRT), a tax break that oil and gas companies receive for decommissioning oil rigs, adding: “[we] have written to your officials with detailed proposals on the changes to the draft legislation and hope you will give this significant consideration”. The final windfall tax bill did not apply to PRT, as Michie had requested.  

“This research makes it abundantly clear that our government has an open-door policy when it comes to the fossil fuel industry”, said Carys Boughton, a campaigner with Fossil Free Parliament. 

“They ask for special treatment; they get special treatment, and the rest of us pay for it – with obscenely high energy bills, and a worsening climate crisis.”

She added: “Our political leaders should be channelling every effort into a just transition from fossil fuels, but this won’t happen until the industry with a vested interest in keeping us all hooked on oil, gas and coal is kicked out of our politics.”

Jeremy Hunt and the ‘Price Floor’

A tranche of additional documents, obtained by Fossil Free Politics and seen by DeSmog, shed further light on the extent of industry lobbying, which continued beyond the introduction of the windfall tax. 

After Liz Truss’s disastrous September mini-budget, newly-installed chancellor Jeremy Hunt used his Autumn statement in November 2022 to extend the windfall tax to 2028 and increase it from 25 percent to 35 percent. 

OEUK raised its opposition to these changes with Victoria Atkins MP, Financial Secretary to the Treasury, in a meeting on 17 November 2022. 

Minutes of the meeting, obtained via a Freedom of Information request, show the body’s chief executive Deirdre Michie telling Atkins that the windfall tax extension “plays into investors being undermined”, and that the 10 percent increase “will impact companies borrowing and projects”. 

Michie also complained of a “lack of engagement” with ministers, and brought up “the previous HMT [Treasury] fiscal forum”. 

A few weeks later, on 9 December, Hunt hosted a fiscal forum in Edinburgh with OEUK and its members BP, Shell, Equinor, TotalEnergies and others. There he promised “more regular fiscal forum meetings in future”, according to a Treasury press release. 

Ahead of the meeting, OEUK said it would urge the government to “scrap the windfall tax on homegrown energy when oil and gas prices fall back to normal levels”. This would mean that if prices drop below a certain point, the windfall tax could be removed before 2028. 

Ahead of the Spring Budget in March 2023, OEUK repeated this demand, reportedly writing to Hunt to call for a “trigger price” which “switches off” the windfall tax. 

Lobbying continued through the spring. In a meeting on 15 March with Treasury’s Exchequer Secretary James Cartlidge, OEUK’s new chief executive David Whitehouse told Cartlidge that the industry was “extremely disappointed that oil and gas did not get a mention in the budget” and called for more engagement and “a public signal” to “shore up confidence”. 

On 9 June, OEUK got its wish. Hunt introduced a “price floor” to the windfall tax, which meant the tax would end before 2028 if wholesale energy prices fall back to normal levels – as OEUK and member companies had been requesting.

‘Cosy Relationship’

When contacted by DeSmog, OEUK did not address the evidence of lobbying specifically on the windfall tax.  A spokesperson said the industry body was “proud” to provide a secretariat function to the all-party parliamentary group for offshore oil and gas.

“The offshore sector is a crucial part of the UK economy, supporting over 200,000 jobs in communities across the country and in nearly every parliamentary constituency,” they said.  

“Our industry is playing a vital role in the UK’s low-carbon energy future and paid £11 billion in production taxes in 2022/23. It has paid a total of £400 billion in taxes over the lifetime of the basin.”

Shell referred DeSmog to OEUK for comment. All other companies named in this story were also approached but had not responded by publication.

The Conservative Party, Cabinet Office, and the Department for Energy Security and Net Zero were also contacted for comment.

Tessa Khan, executive director of Uplift, a North Sea campaign and research group, said the findings revealed the latest in the industry’s “long enjoyed unwarranted influence over our politics”.

“This is an industry that has made obscene amounts of money while millions of ordinary people – older and disabled people, families with young children – have struggled to heat their homes,” she said. “That they then lobbied in private against a windfall tax designed to claw back some of these profits, is disgusting if unsurprising.”

“The cosy relationship between government and profiteering oil and gas companies needs to end, not just for the sake of everyone facing unaffordable energy bills, but for a liveable climate too.”

Original article by Adam Barnett republished from DeSmog.

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Continue ReadingRevealed: The Oil and Gas Lobbying Campaign to Water Down Windfall Tax