Shell says that it embraces the Paris Agreement and expresses its support for an energy transition. But in the meantime, it finances climate-change sceptics and uses shrewd lobbying techniques to effectively torpedo climate policy. On Shell’s three-pronged lobbying method:

Even seasoned environmental activists were taken by surprise: by the mid-20th century scientists and industrialists had already observed that burning fossil-based energy sources released large amounts of CO2 into the atmosphere. In 1958, the American Petroleum Institute (API), an umbrella organisation for the petrochemical industry with about 400 members, including Shell, commissioned a study on the accumulation of carbon from fossil fuels in the atmosphere. Ten years later, the API report ‘Sources, Abundance and Fate of Gaseous Atmospheric Pollutants’ stated that the climate science was robust, and that the burning of fossil fuels was the best explanation for global warming.

Shell was one of the first petrochemical giants to acknowledge the greenhouse effect and the role of people in it. In 1986, an internal study warned that climate change could make the earth partially uninhabitable, stating that therefore ‘… a forward-looking approach by the energy industry is clearly desirable, seeking to play its part with the government and others in the development of appropriate measures to tackle the problem.’

In 1991 – 15 years before Al Gore’s film – Shell produced its own film: Climate of Concern, which warned of climate change and asked: ‘What could lead consumers to demand and pay for rapid, necessary changes?’ Shell also took measures of its own. As a precaution, they raised and reinforced a gas platform in the North Sea, and sold off their coal projects between 1993 and 2000. In 1997, Shell established a new sustainable energy branch; one of its goals was to acquire 10 per cent of the solar energy market by 2005 – significantly adding: ‘The market is going to be big.’

Shell says one thing but does another

Shell has been interested in renewable energy ever since it acknowledged the link between fossil fuels and climate change. But in the meantime, it has continued to earn profits from these same fossil fuels. In the first trimester of 2017 alone, the company initiated oil and gas development through investments and takeovers in Oman, Russia, Argentina, the Gulf of Mexico, Mozambique and Norway.

Between 2006 and 2015, it spent 9 billion dollars on North Pole exploration and only stopped because of poor financial prospects – as it also radically cut back wind and solar energy in 2009, when the yields failed to live up to shareholder expectations. And Shell is continuing to drill in Canadian tar sands, even though it is known that this causes serious pollution.

But playing both sides demands active lobbying, both publically and behind the scenes, nationally and internationally. According to InfluenceMap, an organisation that tracks anti-climate lobbying activities, Shell spends more than 22 million dollars annually to lobby against climate policy. This is how the company maintains its tricky balance – admitting that fossil fuels are making the planet uninhabitable while still continuing to exploit them.

Raising doubts about climate science

Raising doubts about the unwelcome findings of climate science has been a much-used method of the fossil fuel lobby. Although Shell acknowledged the findings, it was at the same time a member of organisations that tried to discredit them. The API wrote in 1998: ‘Victory will be achieved when the average citizen “understands” the uncertainties in climate science … those promoting the Kyoto Treaty on the basis of extant science appear to be out of touch with reality; recognition of the uncertainties becomes part of “conventional wisdom”’. Between 2001 and 2015, the API, with others including ExxonMobil and the Koch Brothers, funded research by Wei-Hock Soon, a scientist who explained climate change as solar variation, thus providing a boost to the oil lobby.

Shell was also part of the Global Climate Coalition, which was established in 1989 to discredit climate science and torpedo climate policy. Royal Dutch Shell withdrew from the organisation in 1997, due to pressure from both its own employees and the environmental movement, and Shell Oil US followed in 1998. But until 2015, Shell remained part of the lobbying group ALEC, which disputes that human activity is the cause of climate change. And Shell is still a member of organisations such as the API and the European Chemical Industry Council, which obstruct climate policies.

Shell invests in wind energy, but largely in gas and oil

In recent years, Shell’s lobbying has become increasingly greener and the energy transition has been placed in the limelight. In 2016, the company established the Transitiecoalitie [Dutch Transition Coalition], jointly with Eneco, Siemens, the Port of Rotterdam and Van Oord dredgers, which at the end of that year requested that the future Dutch government create a robust multi-year policy framework for the transition to sustainable energy. The coalition presented the government with four areas of focus: climate legislation with concrete objectives up until 2050; a minister of economy, climate and energy to ensure policy coherence; an assurance mechanism so that agreements would be adhered to, even when new governments took over; and a national investment bank for large, innovative projects.

In early 2017, Shell stated at the presentation of its annual figures that it wanted to build up a ‘significant portfolio’ in sustainable energy. Newspapers reported on charging points for electric cars at Shell filling stations, the construction by Shell-Pernis of a residual heat installation to supply heating for 16,000 households in Rotterdam and save 35,000 tonnes of CO2, and – to top it all off – Shell joined a consortium that planned to build offshore wind farms in the Netherlands (Borssele 3 and 4) without government subsidies! However, the investment plans for the years 2017 and 2018 reveal that still only 4 per cent of Shell’s 50 billion dollars in total investments go to sustainable energy.

For Shell, New Energies, as they are named in the annual report, are natural gas, biofuels and CO2 capture and storage. Recently, Liquid Natural Gas (LNG) has also been basking in the warmth of Shell’s attention, mainly as a transport fuel. But natural gas remains a fossil fuel, even though its CO2 emission level is lower than that of oil and coal – and for LNG that is not even always true.

Shell also supports ETS, the emission trading system that assigns a price to greenhouse gases. But in 2015 Shell also lobbied the European Commission to lower the CO2 price, thus contributing to the poor functioning of that mechanism.

Shell’s duplicity was clearly brought to light during a Dutch TV news [Nieuwsuur] interview with CEO Ben van Beurden in February 2016. When asked what Shell would contribute to reducing CO2 emissions, he replied that the company only does what society asks: to provide twice as much energy. 'I'll pump up everything I can [for that],' he replied brashly. He quickly added that this energy must be supplied in the most efficient and carbon-free way possible. The 2-degree limit? Shell can monetize all its oil and gas reserves without endangering it. Ultimately, said Van Beurden, the company's mission is to generate dividends and other shareholder returns – through socially responsible investments, to be sure.

The market

Shell regularly claims that society is responsible for the fact that it needs to keep pumping. At the same time, it places pressure on that same society to take a step in the ‘right’ direction, in which the company’s own interests are touted as public interests. In 2011, Shell asked then-EU chair José Manuel Barroso to promote natural gas instead of renewable energy, arguing that it would ‘allow the market to identify the most cost efficient way to deliver this target, thus preserving competitiveness of industry, protecting employment and consumer buying power, to drive economic growth’. The EU decided that emissions of member states must be cut by 40 per cent by 2030, but no binding targets were set for renewable energy.

In early 2017, CEO Marjan van Loon called for an energy transition master plan with pathways for the next 30 years. Then companies could invest even when it doesn’t immediately pay off, ‘because they would know that this project is part of a 30-year plan.’

Obviously, there is also Shell’s abysmal track record as co-owner of the NAM, which in coalition with each successive government has continued to drill for natural gas in Groningen, despite more than a thousand earthquakes since 1986. In April 2016, Shell was still writing that funding for the energy transition would have to come from maximum development of the gas supply, and calculated that an accelerated reduction in production could lead to a 100 billion euro loss in national income.

Shell refuses to commit

While Shell is quick to throw figures at governments, it’s not easy to pin down the company to any concrete climate goals. This was the conclusion of the external experts who evaluated Shell’s sustainability report in 2017, as they do each year. They reported that there were few quantifiable goals and too few verifiable partners, and they were concerned that via their trade organisations and in closed meetings with governments, fossil fuel energy companies were advocating soft climate regulations while advertising themselves as green to the outside world.

In April 2017, Follow This, an organisation that wants to ‘help’ Shell with the energy transition through shareholder action, proposed a resolution which was voted on at the shareholders’ meeting: Shell must lead the energy transition by investing its profits from fossil fuels in renewable energy, and the company must formulate quantifiable goals for emission reductions on all fronts.

However, Shell’s directors advised shareholders to vote against the resolution. They stated that Shell already does a great deal to make net-zero emissions possible by 2050, because half of its portfolio consists of gas. They added that in the near future, the greatest contribution Shell can make is to continue to grow the role of natural gas. Their green portfolio also consists of discussions with governments, with remuneration dependent on ‘managing emissions’, screening projects for CO2 emissions and developing alternative fuels. But, the directors state, the transition task is too large for one single company and it would be counterproductive to place the burden on Shell. Customers would switch suppliers, the long-term value creation for the company and shareholders would suffer and quantifiable goals would hinder the company’s flexibility. There is a great deal of uncertainty about how government policy and consumers ‘will ultimately shape the evolution of the energy system and which technologies and business models will prevail.’

The three prongs of the Shell lobby

Shell’s reaction neatly illustrates the company’s three-pronged argument that it consistently uses to avoid the consequences of acknowledging the greenhouse effect. One: we are already moving in the right direction, especially with natural gas. Two: We have to continue to turn a profit; otherwise, we won’t have any impact and would leave the door open for worse polluters. Three: Not Shell but society determines the ‘evolution’ of the energy system.

The counterarguments to Shell’s in the social debate are just as simple. One: natural gas is also a source of global warming. Two: the planet is more important than shareholders – and Follow the Money hasn’t asked Shell to stop pumping up its supplies, but only to invest its profits in renewable energy. Three: government, consumers and the business world together share responsibility. And, as Mark Campanale of the Carbon Tracker initiative says: energy companies are the only ones that can extract fossil fuel reserves from the ground, so they are the only ones that can decide to leave them there