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Saudi And Russian Oil Producers Benefit From “Climate Activism” Lobbed At Western Producers

Courtesy of ZeroHedge View original post here.

Believe it or not, oil companies in Russia and Saudi Arabia are cheering on climate activists who are doing battle with names like Shell and Exxon.

Among the recent wins was a Dutch court ruling that required Shell to "drastically cut emissions". Exxon and Chevron also both activist battles with shareholders who have accused the giants of not being proactive enough in addressing climate change. 

Amrita Sen from consultancy Energy Aspects said: “Oil and gas demand is far from peaking and supplies will be needed, but international oil companies will not be allowed to invest in this environment, meaning national oil companies have to step in.”

The Saudis, meanwhile, don't seem quite as alarmed by the issue of climate change. When The International Energy Agency issued guidance last month to scrap all new oil and gas developments, Saudi Energy Minister Prince Abdulaziz bin Salman responded by stating: 

"It (the IEA report) is a sequel of the La La Land movie. Why should I take it seriously? We (Saudi Arabia) are … producing oil and gas at low cost and producing renewables. I urge the world to accept this as a reality: that we’re going to be winners of all of these activities."

A spokesperson from Gazprom jabbed: "It looks like the West will have to rely more on what it calls 'hostile regimes' for its supply".

"Western oil majors like Shell have dramatically expanded in the last 50 years" as a result of the West trying to cut reliance on Middle Eastern and Russian oil, Reuters notes. Now these producers must balance a growing chorus of criticisms about climate change with continued output. 

Nick Stansbury at Legal & General, which manages $1.8 trillion, said: "It is vital that the global oil industry aligns its production to the Paris goals. But that must be done in step with policy, changes to the demand side, and the rebuilding of the world’s energy system. Forcing one company to do so in the courts may (if it is effective at all) only result in higher prices and foregone profits."

While Saudi Arabia claims to have targets to cut carbon emissions, it isn't beholden to U.N.-backed targets or activist investors like Western companies are. Gazprom has indicated a shift to natural gas to try and manage its carbon emissions. 

Western names account for about 15% of all output globally, while Russia and OPEC make up about 40%. At the same time, global oil consumption has risen to 100 million barrels per day from 65 million barrels per day in 1990. 

“The same oil and gas will still be produced. Just with lower ESG standards,” one Middle Eastern oil executive concluded.


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