LONDON (Reuters) – France’s Total SE on Friday became the first major global energy company to resign from the U.S. main oil and gas lobby due to differences over its climate policies and support for easing drilling regulations.
Total said it would not renew its membership of the American Petroleum Institute (API) in 2021 after a review of the climate lobby’s positions, describing them as being only “partially aligned” with its own.
The high-level exit from the most powerful energy lobby comes before radical changes in policy direction in the United States, with new President Joe Biden promising to fight climate change and bring the country to zero net emissions by 2050.
“As part of our climate ambition made public in May 2020, we are committed to ensuring, in a transparent manner, that the industry associations of which we are part adopt positions and messages aligned with those of the Group in combating climate change”, said the CEO of Total, Patrick Pouyanné.
The withdrawal highlights an ever-widening gap between Europe’s leading energy companies, which last year accelerated plans to cut emissions and build large renewable energy companies, and their American rivals Exxon Mobil Corp and Chevron Corp, which have largely resisted. part of the growing pressure from investors to diversify.
Chevron has no plans to leave the API, said company spokesman Sean Comey. Exxon was not immediately available for comment.
The announcement puts pressure on Total’s European rivals, BP and Royal Dutch Shell, to follow suit, after resisting the move in recent years.
BP, Shell and Equinor of Norway said on Friday that they are reviewing associations in commercial organizations and how they align on climate issues. Shell spokesman Curtis Moore said that “the API is approaching Shell’s own stated views” on climate change.
In the past, European oil companies have pointed to API’s role in formulating industry safety and operation standards as their justification for staying in the group.
However, in its reasons for leaving the group, Total cited API support for reversing US regulation last year on methane emissions, its divergent views on carbon prices, as well as its lack of support for subsidies for electric vehicles.
The API thanked Total for joining, but noted that it does not support energy subsidies, saying it distorts markets.
“We believe that the world’s environmental and energy challenges are big enough that many different approaches are needed to resolve them and we have benefited from a diversity of views,” said the API.
The group defended its history of combating carbon emissions, noting that technological advances in the sector have helped to reduce carbon dioxide and methane emission rates in large oil-producing regions.
Total last year announced plans to cut its carbon emissions, with the goal of achieving zero net emissions from its operations and its energy products sold to customers in Europe by 2050 or earlier.
Total’s operations in the United States include a series of offshore oil and gas fields in the Gulf of Mexico, a major refining and petrochemical plant in Port Arthur, Texas, as well as renewable energy businesses. The company produced about 343,000 barrels of oil equivalent per day in the third quarter in the Americas.
SIGNIFICANT MOVEMENT
The growing pressure from investors has stimulated Europe’s leading energy companies to draw up plans to reduce emissions and increase renewable energy production.
“There is simply no justification for any association with lobbying groups that repeal emissions regulations and undermine urgent climate action,” said Jeanett Bergan, head of responsible investment at KLP, Norway’s largest pension fund, which manages $ 80 billion in assets.
Total, BP and Shell have already withdrawn from American Fuel & Petrochemical Manufacturers (AFPM), a US oil refining group, also due to differences in climate policies.
The withdrawal of the API was more significant, said Andrew Logan, director of oil and gas programs and the clean energy investor group CERES, said the announcement was significant and would put pressure on other major European oil companies.
“Given the size and influence of the API, this is a far more significant move than previous decisions to withdraw from niche commercial groups like AFPM. I think we’ll see other companies do the same, ”said Logan.
Reporting by Ron Bousso, Matthew Green and Shadia Nasralla in London, Nerijus Adomaitis in Oslo, Valerie Volcovici in Washington and Jennifer Hiller in Houston; Jan Harvey, Jason Neely, Jane Merriman, Marguerita Choy and Louise Heavens