Big Oil and Climate Regulation: Business as Usual or a Changing Business?

Abstract

There is a long and continuing debate in the literature on corporate political power about whether businesses that advocate public-interest regulation do so for strategic political reasons or because they anticipate economic gains. Previous research on Big Oil’s strategies in climate politics has largely converged on the first view, arguing that global majors feign support for moderate carbon pricing largely to prevent the adoption of more drastic and costly policies. In contrast, this article argues that Big Oil’s growing stake in natural gas expansion is its economic motive for supporting favorably designed carbon pricing. The article finds that policy, technology, and energy market changes have paved the way for a shift toward natural gas and that a moderate carbon price, by triggering coal-to-gas switching, supports the realization of a gray transition in which “Big Gas” can expand its market share at the expense of coal and become a major bridge fuel next to renewables. Our findings underscore the importance of studying the competitive rivalry that underpins evolving industry demands for climate policy and regulation.

The clean energy claims of BP, Chevron, ExxonMobil and Shell: A mismatch between discourse, actions and investments

“…Clarifying the factors that have influenced the contrasting behavior of the American and European majors was beyond this study’s scope. However, based on insights provided by previous literature, we speculate that trends found in this study reflect the historically more aggressive emission reduction targets and climate policies of governments in European countries [ 3 , 31 , 50 , 120 – 122 ]. Conversely, the regulatory climate in the home country of the American majors was significantly weakened during the Trump administration over 2016 to 2020 [ 3 ].…”

“…Conversely, the regulatory climate in the home country of the American majors was significantly weakened during the Trump administration over 2016 to 2020 [ 3 ]. BP and Shell have also been observed to have historically possessed more pro- leadership and management structures that more readily engage in climate issues [ 121 , 122 ]. Furthermore, more experience in renewables might also give them more confidence to profit from future clean energy markets, since their American competitors lack a comparable investing history [ 121 ].…”

Advocacy coalitions in the acceleration phase of the European energy transition

“…For companies that build RE plants with low or no subsidies, a high ETS price is important since these actors trade their electricity in the whole-sale market. As they often have mixed production portfolios, a higher ETS price helps not only their RE business, but also makes their existing gas, nuclear and hydro production more profitable compared to coal power (Lindberg, 2019;Vormedal et al, 2020).…”

The Climate Establishment and the Structural Constraints of the Paris Partnerships

“…The network analysis indicates that INGOs in the climate establishment regularly partner with Royal Dutch Shell, Total, Petrobras and Exxon. Yet, social science research demonstrates that at best, many oil and gas rms favor the status quo; at worst, they seek to obstruct decarbonization (Supran and Oreskes 2017a; Franta 2018; Vormedal et al 2020;Franta 2021;Williams et al 2022;Brulle 2023). More recently, fossil fuel companies have engaged in both greenwashing and "greenhushing" [5] -with little to no reporting on progress toward previously-set goals.…”