This briefing contains an overview of the corporate lobbying detected by InfluenceMap related to fossil fuels for the month of February 2023:
In the United States, trade associations and companies from multiple sectors opposed the Federal Acquisition Council’s proposal to require science-based GHG emissions reduction targets for federal contractors. Additionally, the oil and gas industry pushed back on the “duty of candor” rule proposed by the Federal Energy Regulatory Commission in November 2022.
In Canada, a new report from InfluenceMap on the six largest oil and gas companies headquartered in Canada and the Canadian Association of Petroleum Producers (CAPP), shows the Canadian oil & gas sector’s advocacy to push for fossil fuel expansion while also opposing progress on climate policy.
In Asia, there appears to be a significant effort to advocate for the prolonged and expanded role of fossil fuels from companies in China, Korea and Japan.
In February 2023, oil majors announced record-breaking profits and chose to double-down on fossil fuels. This month, InfluenceMap writes a briefing on BP and Shell’s recent announcements in particular, arguing their climate policy engagement continues to be a more accurate proxy for the companies’ climate strategies than top-line statements and long-term transition plans.
In November 2022, the Federal Acquisition Council – consisting of the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration – proposed a climate disclosure rule that would amend the Federal Acquisition Regulation to require “major” federal contractors1 to set science-based targets to reduce their GHG emissions. The proposal received heavy opposition from several sectors, including trade groups American Gas Association, National Mining Association, and U.S. Chamber of Commerce and companies BP and Valero.
In a February 9th joint letter, a trade group coalition opposed the science-based targets for reducing GHG emissions and advocated for regulators to “abandon and withdraw the proposal entirely.” The signatories of the letter included the American Chemistry Council, American Petroleum Institute, National Mining Association, Portland Cement Association, and the U.S. Chamber of Commerce.
In February 13th comments, the American Gas Association (AGA) opposed the GHG emissions targets and questioned the FAR Council’s legal authority. The group also opposed the proposal’s GHG emissions targets on the grounds that it would “likely result in significant energy shortages and inflationary energy costs for the federal government.” In its own comments, the National Association of Manufacturers (NAM) also suggested that the FAR Council was acting beyond its legal boundary and advocated for the proposal to be “set aside in its entirety.” NAM had previously submitted December 12th comments that pushed back on the rule and requested that the public comment period be extended to March 14th, 2023.
In February 13th comments, BP pushed back on the GHG emissions targets and advocated for incentives in lieu of requirements. Similarly to AGA’s comments, the company did not support the proposal’s impact on the energy mix because of its potential to “limit the ability of companies to supply needed energy to the American people in times of crisis.” Valero, meanwhile, submitted comments on February 13th that advocated for regulators to withdraw the proposal “due to anticipated impacts on U.S. national security” and emphasized that it violated legal authority.
1 The FAR Council defines major contractors as “offerors that received more than $50 million in Federal contract obligations (as defined in OMB Circular A-11) in the prior Federal fiscal year as indicated in the System for Award Management.”
Over the past two years, InfluenceMap has tracked the use of disinformation by the oil and gas industry in lobbying against climate policies and in favor of pro-fossil fuel outcomes. This has occurred across social media advertising, in CEO statements, and government consultation submissions, and has largely taken the form of misleading and inaccurate statements about the science of climate change and how it relates to fossil gas. Tackling this issue has predominantly fallen under the remit of advertising regulators so far, and is reflected in the number of consumer fraud suits currently ongoing against the oil and gas industry, such as the Massachusetts Attorney General Office’s lawsuit against ExxonMobil for use of deceptive advertising. No policies have been developed, however, to prevent the use of disinformation and misleading claims in engagements with policymakers.
In July 2022, the Federal Energy Regulatory Commission (FERC) introduced a proposed rulemaking requiring all entities communicating with the Commission to submit "accurate and factual information and not submit false or misleading information or omit material information." In its proposal, the FERC stated that "introducing incorrect or inaccurate information into the Commission's decision-making process can lead to uneconomic, unfair, unjust, unreasonable, or even dangerous outcomes,” including on decisions regarding "pipeline approval and operations." While the FERC proposal does not appear to extend to information about climate change or climate science, it does provide an interesting case study into how regulators are trying to prevent and protect policymakers from disinformation.
Lobbyists engaged from the oil and gas industry all opposed the policy, with the exception of TC Energy, which advocated for significant amendments to the policy proposal. Oppositional positions were submitted by several entities, including the American Petroleum Institute, American Gas Association, Edison Electric Institute, U.S. Chamber of Commerce, Natural Gas Supply Association, and Enbridge. Reasons for opposition included the breadth of the proposal, concerns that it would "chill" communications, lacks a factual basis, and that the proposal is legally challengeable and contravenes the First Amendment. In addition, there was a concern around how the rule would affect the "efficacy" of industry associations.
InfluenceMap’s latest report, released in February 2023, looks at the Canadian oil and gas sector’s engagement on climate policy. The report focuses on the six largest oil and gas companies headquartered in Canada and the Canadian Association of Petroleum Producers (CAPP). The companies include Canadian Natural, Cenovus, Enbridge, Imperial Oil, Suncor, and TC Energy, which together make up around 67% of the market cap of the energy sector in Canada.
The Canadian oil and gas sector appears to be contradicting the guidance provided by the IPCC to phase out fossil fuels, as it continues to advocate for their expansion while also opposing progress on climate policy. This trend raises concerns that the sector's commitment to achieving net-zero emissions may simply be a guise for continuing to lobby in favor of fossil fuels.
CAPP and all six companies have advocated for measures to increase the role of fossil fuels in Canada, such as pushing for new oil and projects and advocating for financial and regulatory support for the industry. They also appear involved in attempts to weaken emission reduction policies, such as Canada's 2022 oil and gas emissions cap and methane regulations.
In its engagement, the sector frequently portrays Canadian oil and gas as a climate-friendly solution – for example, arguing that increased exports of Canada's oil and gas could replace 'dirtier' coal elsewhere in the world and enable overall emissions reductions.
The six companies have ties to several other industry groups that advocate negatively on climate, such as the Canadian Fuels Association, Canadian Chamber of Commerce, American Petroleum Institute, and American Gas Association.
The first two months of 2023 saw Asian oil & gas companies advocating to not only prolong, but increase, the role of fossil fuels in the energy mix. This included several instances of companies supporting increasing coal or oil production capacity and infrastructure both domestically and internationally, and the exploration of new fossil fuel resources:
In a March 2023 interview with China Economic Times, CNPC Economics & Technology Research Institute (ETRI), a think tank of PetroChina, predicted an increased production of coal and gas in the following years and advocated for further exploration of oil and gas.
In a February 2023 interview with China Energy News, CNPC ETRI supported doubling down on domestic oil and gas exploration to ensure national energy security, and advocated for building new oil and gas pipelines that connect China with Central Asia and Russia.
Also in February, CNPC appeared supportive of further exploration of oil and gas in Africa, indicating the huge potential for oil and gas production growth in the region. CNPC also supported fossil gas for its importance in building a low-carbon and efficient energy system, and advocated for investment in fossil gas projects and infrastructure in Central Asia.
During a February 2023 Resources and Fuels subcommittee meeting hosted by the Ministry of Environment, Trade and Industry (METI) of Japan, The Federation of Electric Power Companies of Japan advocated for the extended role and stable supply of coal in Japan over LNG, citing energy security and supply concerns around LNG.
In another METI Fuels Subcommittee meeting in February 2023, the Japan Gas Association supported Japanese government efforts to ‘secure stable LNG and upstream development’, as well as to ‘secure strategic surplus LNG.’
In January 2023, the CEO of KOGAS appeared to support the potential for ‘new growth…in LNG infrastructure’ and pledged to make sure that natural gas ‘does not remain at the limit of the role of bridge energy’ in the carbon-neutral transition.
In February 2023, BP and Shell, along with several oil majors, announced record-breaking profits. For BP, this announcement also included the company’s decision to roll back its climate targets and invest more heavily in oil and gas. Over the past few years, BP and Shell have tried to position themselves as ‘part of the solution’ to climate change. For instance, InfluenceMap’s 2022 report ‘Big Oil’s Real Agenda’ found that 70% of Shell’s 2021 communications contained ‘green’ claims, and for BP the figure totaled 61%. As such, these recent decisions to double down on fossil fuels came as a surprise to many.
Analysis of the policy engagements by BP and Shell on climate, however, show they have continued to push for policies that would facilitate greater investment into oil and gas production. The Intergovernmental Panel on Climate Change and the International Energy Agency have both found that investment in new oil and gas exploration, production, or infrastructure is incompatible with net-zero by 2050 and efforts to limit global warming to 1.5C. As such, BP and Shell’s policy engagement has continued to be fundamentally misaligned from the findings of the IPCC and IEA. This advocacy not only undermines the integrity of BP and Shell’s top line claims around net-zero, but it also makes these targets impossible to achieve. As such, it appears actual climate policy engagement is a far more accurate proxy for corporate thinking on climate than top line statements or long-term transition plans.
This policy engagement has taken place in major economies around the world, with evidence assessed by InfluenceMap in 2022 in the US, UK, EU, and Australia. This includes successfully advocating to remove critical criteria from the UK’s Climate Compatibility Checkpoint in February 2022 (BP and Shell), advocating for a continued role for gas across EU climate policies (BP and Shell), and testifying to the US House Committee on Energy and Commerce for more permits and investment into oil and gas exploration in April 2022 (BP America and Shell USA).
It also shows BP and Shell’s support for India to become a ‘gas-based economy’ in September 2022 (BP and Shell), a concerning development which indicates the oil majors’ efforts to lock in fossil fuels in the Global South. InfluenceMap will be further examining corporate lobbying in India later this year and welcomes engagement on the topic from interested parties.
