Big Oil’s Bad Week

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The world’s largest integrated oil and gas companies are the so-called supermajors or more commonly “Big Oil.” In order of descending market capitalization, these companies are ExxonMobil, Chevron, Royal Dutch Shell, TOTAL SE, and BP.

Because global oil consumption results in one of the largest contributions to atmospheric carbon dioxide emissions from any source, Big Oil is frequently blamed for climate change.

There have been various campaigns targeting these companies’ operations (e.g., when activists try to stop drilling or pipeline construction) and their finances (e.g., by targeting banks that lend them money, and institutions that invest in them).

Last week three members of the Big Oil club were each dealt blows regarding the status quo of their businesses.

The Shell Decision

A Dutch court has ordered Royal Dutch Shell to reduce its CO2 emissions by 45% from the 2019 level by end of 2030. This marked the first time a court has ordered a private company to reduce its carbon dioxide emissions.

The lawsuit was filed in 2019 by Milieudefensie, the Dutch arm of Friends of the Earth. More than 17,000 Dutch citizens and six environmental groups joined the lawsuit, which argued that Shell’s business practices violated the “unwritten standard of care” that required it to protect Dutch residents.

The court agreed with the plaintiffs, ruling in part:

“The court considers that the CO2 emissions for which RDS can be held responsible by their nature pose a very serious threat, with a high risk of damage to Dutch residents and the inhabitants of the Wadden region and with serious human rights impacts. This applies to both current and future generations. The compelling common interest that is served by complying with the reduction obligation outweighs the negative consequences RDS might face due to the reduction obligation and also the commercial interests of the Shell group, which are served by an uncurtailed preservation or even increase of CO2-generating activities.”

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