Big Oil Drops Renewable Goals, Expands Fossil Fuels

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Last week, British Petroleum announced that it was slashing more than $5 billion in planned green energy investments. It was a marked departure from the early 2000s, when the oil giant branded itself as “beyond petroleum,” and even 2020, when the company targeted a 20-fold increase in its renewables portfolio.

“Today, we have fundamentally reset BP’s strategy,” said BP’s CEO, Murray Auchincloss, as part of the most recent announcement. “This is a reset BP, with an unwavering focus on growing long-term shareholder value.”

BP isn’t the only oil giant rolling back its climate commitments. Shell and Norway’s state-controlled Equinor have also made similar moves recently. But, while the news has caught headlines, experts say that the moves will have little impact on the larger renewables industry — and that, from a climate perspective, the companies’ proposed increase in fossil fuel production is much more alarming. 

“I don’t see the watering down of renewables targets as particularly significant. The oil and gas sector accounts for a negligible share of clean energy investment,” wrote Rich Collett-White, an analyst at Carbon Tracker, a nonprofit think tank researching the impact of climate change on financial markets, in an email. According to the International Energy Agency, the sector accounts for only 1 percent of the overall industry. 

“Clean energy investment is still increasing globally — it’s just not coming from the oil and gas sector,” said Collett-White. “The changes they’re making to production targets are more significant.”

At the same time that BP cut its renewables portfolio, it said it was going to invest $10 billion more in oil and gas. The company is now aiming to produce 2.4 million barrels per day of fossil fuels by 2030, which is a 60 percent jump from its 2020 target. That 900,000 barrel difference amounts to about 387,000 more metric tons of carbon dioxide each day — which is equivalent to around 90,000 gas-powered cars operating for a year.

“​​Even before these renewable rollbacks, almost all the oil majors were locked in to new oil and gas production,” explained Kelly Trout, research director at Oil Change International, an advocacy organization aiming to facilitate a just transition to clean energy. A report from the organization last May found that six of the eight largest oil companies had explicit goals to increase oil and gas production. Since then, Trout says that has grown to seven companies, with Shell being the only exception. 

These commitments come at a time when the oil market already shows signs of saturation. Of the 2,206 active leases in the Gulf of Mexico, only a fifth are producing oil, according to records from the Bureau of Ocean Energy Management, which regulates offshore drilling. Collett-White says that, climate aside, Carbon Tracker “would caution against locking in new, high-capex long-cycle developments that would need high oil/gas prices to be competitive.”

Nonetheless, President Donald Trump has urged the United States to “drill, baby, drill.” In the first month since retaking office, his administration has declared an “energy emergency” aimed at enabling the government to ramp up fossil fuel extraction, reversed a moratorium on liquefied natural gas exports, and installed a former natural gas executive as the head of the Department of Energy. At the same time, Trump has also frozen much of the money from President Joe Biden’s landmark climate bills, the Inflation Reduction Act and the bipartisan infrastructure law. 

“Trump and the current administration is giving these companies a pass to keep their polluting practices,” said Mahyar Sorour, the director of the Beyond Fossil Fuels Policy program at the Sierra Club. “It is no surprise that these companies are following [Trump’s] lead.”

In BP’s announcement, the company is similarly distancing itself from its previous commitments to clean energy. “Our optimism for a fast [energy] transition was misplaced,” Auchincloss said. “We went too far, too fast.“

Rollbacks like BP’s are in some ways laying bare what activists have long argued: The commitments were insincere from the start. “Many of these tactics have been simple greenwashing,” said Sorour, adding that momentum will continue regardless. “We are well on our way to a green energy transition.”

Now that oil companies have made their intentions clear, Trout is watching whether investors and governments will respond with any pushback against the production increases. Meaningful reductions in planet warming emissions, she said, can’t happen without phasing out fossil fuels — a future oil companies clearly aren’t envisioning. 

“We’re not going to solve the climate crisis simply by adding renewable energy on top of fossil fuels,” she said. “It’s a truth telling moment.”