Family feud: Shell breaks rank with other oil producers over low-carbon future

The world’s major oil companies are so tightly aligned that they were once known as the Seven Sisters. But as the climate crisis grows, the family bond is fading.

In April, Royal Dutch Shell announced that it had recently reviewed its role in 19 industry associations in Europe, North America and Australia and that it would pull out of one of them and serve notice to nine more.

Relative to major oil peers, the Anglo-Dutch oil giant has been among the leaders on climate change, endorsing the Paris Agreement as well as the UN’s Sustainable Development Goals.

Shell released its 45-page report, Industry Associations Climate Review, in response to various non-profit organizations’ concerns highlighting that some energy companies claiming to be proactive about climate change were actually supporting associations that were not. After all, every month that passes without reform pours more money into Big Oil.

The audit compared the positions of 19 industry associations in relation to Shell’s support of four key positions: the Paris Agreement; government-led carbon pricing tactics such as carbon taxes; incentives for alternative energy; and a transition role for natural gas in a low-carbon future.

The audit found “alignment” with nine associations and “misalignment” with nine more. Shell found “material misalignment” with one association, the American Fuel & Petrochemical Manufacturers (AFPM), which opposes carbon-pricing and supports the rollback of the U.S. Environmental Protection Agency’s fuel economy standards – both offside of Shell’s positions. As a result, Shell is cancelling its AFPM membership in 2020.

The AFPM responded like a patronizing parent: “We thank Shell for their longstanding collaboration with AFPM and wish them all the best in the future…Like any family, we aren’t always fully aligned on every policy, but we always strive to reach consensus positions on policies that are in the best interest of our membership and the communities that rely on us.”

The Canadian Association of Petroleum Producers (CAPP) was one of the nine questionable partners. The association has been reluctant to support the Paris accord as well as federal and provincial carbon pricing frameworks. Shell will continue to engage with these bodies but says it will reassess its membership when it “identifies a risk of material misalignment.”

In an interview with the Canadian Press, CAPP CEO Tim McMillan said its policy is determined by its 50-member board of governors, which includes Shell Canada president Michael Crothers.

McMillan also said CAPP isn’t interested in dictating solutions on carbon pricing and that Canada is experimenting with several different approaches: “We’re neither for nor against any particular one of those. We just want to see the outcomes.”

Greenpeace Canada energy strategist Keith Stewart told CBC News he welcomed Shell’s initiative, stating that it’s going to “help shake up the industry.”

But Shell gets no pass for 110 years of greenhouse gas emissions. Greenpeace is encouraging Toronto and other cities to explore legal action that would hold oil firms responsible for the costs of climate change including more frequent flooding, heatwave and fire events.

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