On the same day that rioters attacked the U.S. Capitol, Trump administration officials held an auction to sell oil-and-gas-drilling leases in Alaska’s Arctic National Wildlife Refuge. The leases—which President Joe Biden has since moved to suspend—were meant to be a last-ditch triumph for the Donald Trump administration, which waged a madcap campaign to put parts of the park up for sale and end a decades-long environmental battle. The auction opened the nation’s largest national wildlife refuge to drilling for the first time, threatening the wildlife habitat and doubling down on the use of fossil fuels in the midst of a mounting climate crisis. And then, a plot twist: virtually no one showed up.
Early last year, BP’s chief executive said the company would pursue a plan to emit net-zero carbon by 2050. The declaration was followed by similar announcements from European companies Royal Dutch Shell and Total. American counterparts ExxonMobil and Chevron have also made gestures toward limiting emissions, albeit much weaker ones. Reports have broken down the real impact of these announcements, but it’s clear that oil companies are increasingly concerned about their reputations. “The industry is losing because their returns have been pretty terrible, and that has to do with the price of oil; but in larger part it’s because of global warming,” petroleum industry expert and former White House adviser Philip Verleger told me. “The industry is just seen as somebody that’s trying to kill everybody.”
If the aim is to convince Wall Street that serious change is underfoot, there’s still a long way to go. “My gut says that any major oil company touting its green footprint or plan for a carbon-free future is mostly horseshit and P.R. propaganda,” one oil trader told me. “My gut also says that they would be in a prime position to suck up any green carbon tax credits or incentives, but still make the majority of money from producing, refining, and shipping crude and its downstream products.” BP’s share price sank after the company’s chief executive made his big net-zero announcement. The slide was part of a downward trajectory likely linked to the pandemic (Shares of ExxonMobil, which is doubling down on oil, also plunged), but it made clear that the intention to transition wasn’t immediately seen as a panacea to the industry’s problems.
In practice, too, Big Oil’s green initiatives are still marginal to oil and gas, which remain the biggest profit-drivers. For instance, BP allocated only 3.2% of its 2019 budget to investing in renewables. While Shell and BP, as well as a few other companies, have outlined investments in alternative fuels and fuel technologies, it’s unclear exactly how big of a role new energy sources will play relative to fossil fuels in most portfolios. In other words, the companies have put themselves in a position where they can tout their green cred by investing in alternative energies, while continuing to make the majority of their money from fossil fuels. “They haven’t even produced a glossy handout saying they expect to make X% of revenues by green energy yet,” the trader told me. “They say it because it sounds good.”
Inside Shell, one of the companies pushing a new green image, a petroleum geologist told me that the mood in his division is gloomy. Part of the company’s net-zero announcement included a restructuring, which will be the fourth reorganization he has been through. Promotions, raises, perks like phones, and time to take part in trainings aren’t thrown around like they once were. Most of his colleagues, he said, have started considering career alternatives. “The shine of the oil job is not there anymore,” the geologist told me.
A former BP employee told me that he had supported his company’s plan, but didn’t know exactly how it would be implemented. “I think the question that a lot of folks are asking is: What’s the transition plan?” he said. “Because these hydrocarbon businesses, you know—exploring for oil and gas, refining crude oil, selling petrol and diesel fuel—those are still the foundational building blocks of BP today. Those are still the bits of BP that generate most of the cash.”
Even inside the companies, though, some believe that the only way for the oil majors to move forward is by embracing a new identity—a viewpoint that jibes with that of the current administration. Last week, Biden’s White House announced a series of policy changes aimed at steering the country away from fossil fuels, and progressives have pushed him to go even further. In many cases, the divide between oil employees’ visions for the future reflects a generation gap. One younger Shell employee who works in the new-energies section of the company hasn’t experienced the same kind of fears about her job that the petroleum geologist has. If anything, her division is expanding. She told me that she believed the drive to overhaul as an energy company is authentic. “I wouldn’t say it’s marketing. We’re spending a lot of hours working on this,” she said. “I think the world is changing. My personal view is that the company is smart to be involved and invested in the energy transition.”