Oil Companies are Thinking about a Low-Carbon Future (But Only Thinking)

Lewis Fulton, Daniel Sperling

Security, Americas

Discussions about Big Oil’s interest in sustainability center on continued global demand for petroleum.

The global oil industry stands at a crossroads. Corporate leaders are weighing how closely to stay wedded to their legacy business – finding, extracting and refining fossil energy – versus preparing for an uncertain low-carbon future.

There are signs of an impending pivot. Most of the largest multinational oil companies have formally supported the Paris climate agreement. Total has purchased electric power company DirectEnergie and charging solutions provider G2Mobility. Shell has acquired e-mobility company NewMotion; its CEO, Ben van Beurden, has expressed support for a zero-carbon world target.

The companies least willing to shift focus today tend to be national companies and nationally owned firms, such as those in Kuwait and Venezuela. Such companies control nearly 90% of all the oil in the world. However, some, such as Saudi Aramco, are looking at a range of green projects including solar, carbon capture and hydrogen.

As transportation/energy scholars, we are most interested in decisions by major private oil companies that are subject to greater public pressure. What should shareholders expect from these companies? And what can policymakers do to encourage further investment in more sustainable options? Oil companies clearly are thinking about a low-carbon future, but many are still exploring ways to get there.

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