Volume 4: The Oil Industry

The Oil Industry

Industry updates 

1. Trump returns to the white house – the immediate effect 

Oil markets showed initial volatility following Trump's confirmation, with Brent crude and WTI futures dropping more than $2 before recovering as traders speculated on the implications. Despite Trump's known preference for fossil fuels, Rystad's analysis suggests Republican states will continue embracing clean energy initiatives. Notably, Biden's $369 billion Inflation Reduction Act has directed 85% of clean energy funding to Republican-leaning regions. While a Trump presidency might boost traditional energy sectors, former UN climate chief Christiana Figueres maintains that these policy shifts won't derail the global momentum toward decarbonisation and Paris Agreement goals. The situation underscores the resilience of clean energy transitions, even amid shifting federal priorities. 

 Link here 

2. Huawei drives sustainable transition for Latin America 

Huawei Digital Power reinforced its commitment to green energy transition at the IX Energy Week in Asunción, Paraguay. The event brings together key decision makers and policymakers to address energy sustainability challenges in Latin America and the Caribbean. Huawei Digital highlighted its solutions for energy efficiency, featuring the FusionSolar Smart PV Management System, a comprehensive app-based control system designed for solar panel management for both residential and commercial users. 

Link here 

3. Seaway 7 wins cabling work on East Anglia Two offshore wind farm 

Seaway 7, Subsea 7's renewables division, has secured a contract from ScottishPower Renewables to handle transport and installation of inter-array cables for the East Anglia Two offshore wind project. The £4bn ($5.16bn) wind farm, to be located 33 km off England's east coast, will generate up to 960MW of green energy, sufficient to power nearly 1 million homes. Link here 

4. Louisiana voters agree to put offshore wind energy revenue into coastal projects 

Louisiana voters have approved a constitutional amendment dedicating offshore wind revenue to coastal projects, as the state takes its first steps into wind energy development. A recent poll shows 59% of Louisianans support wind energy expansion, compared to 72% backing solar and 79% favouring coastal oil and gas drilling. The amendment's supporters view it as critical for combating coastal land loss, a problem partly attributed to unrestricted oil and gas exploration. This initiative represents Louisiana's attempt to balance traditional energy interests with emerging renewable opportunities and environmental protection. 

Link here 

5. COP29 Summit in Baku: What to Expect 

COP29 marks the third major fossil fuel producer to host the climate conference, and the second consecutive year for such a host. Adding to concerns, President Ilham Aliyev has announced plans to boost gas production to meet EU demand, while describing the country's fossil fuel reserves as "a gift from God." The appointment of Mukhtar Babayev, a prominent oil industry figure, as chief negotiator has sparked debate over potential conflicts of interest that could compromise the climate conference's effectiveness. The situation highlights growing tensions between fossil fuel interests and global climate goals. 

link here 

Longer Article

Introduction to the Oil industry 

As the world races to address the climate crisis, all eyes are on an industry that sits at the heart of the debate: Big Oil. Supplying 55% of global energy while contributing 15% of emissions, around 5.1 billion tonnes of CO₂ annually, the oil industry finds itself at a critical crossroads. While major players like BP and Shell tout their green credentials and renewable ambitions, the reality of their transition efforts tells a more complex story. 

Through a mix of voluntary pledges and legally binding requirements, the industry claims to be progressing towards decarbonisation and renewable diversification. Yet these efforts raise a crucial question: Can an industry built on fossil fuels truly transform itself, or are we witnessing sophisticated greenwashing on an unprecedented scale? The appointment of ADNOC's CEO to lead COP28 has only intensified this debate, with many viewing it as a glaring conflict of interest. 

The numbers paint a sobering picture. Despite bold announcements and initiatives like the Global Decarbonisation Alliance, clean energy investments make up a mere 2.5% of total industry spending. While BP aims for 50 gigawatts of renewable capacity by 2030 and Shell invests in solar and hydrogen, these commitments represent just a fraction of their overall operations. Meanwhile, the industry largely overlooks its biggest challenge: scope 3 emissions from fuel combustion, which remain driven by persistent consumer demand. 

This gap between promises and action, combined with companies' slow compliance with regulations and continued prioritisation of profit over climate concerns, has led to mounting calls for greater accountability and regulatory reform. As we look ahead, the success of the climate transition appears increasingly dependent on individual states' initiatives and their willingness to hold this powerful industry to account. 

How the Oil Industry Features in the Climate Transition 

As the oil industry grapples with its role in the climate transition, a complex web of challenges has emerged that tests the industry's commitment to genuine change. At the heart of this debate lies a growing scepticism about whether these corporate giants can transform quickly enough to meet climate goals while maintaining their economic stability. 

The industry's attempts to showcase its environmental credentials have often backfired, fuelling accusations of greenwashing rather than building trust. Studies increasingly reveal that many climate-related claims by major companies lack substance behind their green messaging. Shell's "carbon-neutral" driving promotion stands as a telling example - marketed as environmental progress but criticised for lacking meaningful action, it has become a symbol of the industry's struggle with credibility. This credibility gap has real consequences. Climate litigation has tripled since the Paris Agreement in 2015, exposing industry giants like Shell, BP, and ExxonMobil to mounting liabilities. Companies slow to adapt to climate regulations face increasing legal and financial risks, a trend that shows no signs of slowing. 

Yet the path to transformation presents complex economic challenges, particularly for oil-dependent regions. Saudi Arabia exemplifies this dilemma, while dependent on low-cost oil production for economic stability, it simultaneously grapples with environmental threats like water scarcity. The spectre of job losses and social upheaval in oil-dependent regions adds another layer of complexity to an already challenging transition. 

Efforts to hold oil companies accountable have taken various forms, from voluntary initiatives to mandatory regulations. The UN Global Compact allows companies to set broad sustainability goals without strict enforcement, offering flexibility but risking superficial commitments. Meanwhile, mandatory regulations like the EU's Corporate Sustainability Due Diligence Directive (CSDDD) take a more stringent approach, enforcing emissions reporting and imposing penalties for non-compliance. 

Several pathways for meaningful progress have emerged. The expansion of carbon capture technology, hydrogen production, and renewable energy projects offers opportunities for the industry to leverage its expertise while reducing emissions. Some companies are beginning to set measurable climate targets and report progress more consistently, though these efforts remain in their early stages. 

The transition demands more than just technological solutions or regulatory compliance. It requires a fundamental rethinking of how the industry operates and its role in a sustainable future. Governments must play their part by incentivising renewables and supporting affected communities, while oil companies need to work alongside stakeholders to address social impacts and drive sustainable change. As pressure mounts from investors, regulators, and the public, the industry finds itself at a defining moment. The companies that proactively adapt to this new reality, investing seriously in clean technologies and transparent reporting, may find themselves better positioned for the future. Those that resist change risk facing increasing legal, financial, and reputational consequences. 

The question that emerges is not whether the oil industry will transform, but how and at what pace. Can it balance the urgent need for climate action with the complex realities of economic transition? As we stand at this crossroads, one thing is clear: the time for half-measures and token gestures has passed.  

The path forward requires a fundamental reimagining of not just how oil companies operate, but of their very role in the global energy system. The stakes couldn't be higher - the answer will shape not only the future of these companies but the success of our collective response to the climate crisis itself. 

Media Recommendations 

 Wharton Magazine ESG Section 

Link 

 This publication from the Wharton School provides news, insights, and highlights influential individuals in ESG. As a university-run magazine, I really enjoyed this read because it provided a tailored student perspective that I could relate closely to – in particular, articles about inclusion resonated with me as a minority student. I find the articles to be a deeply engaging read because they feel unique from other sources; Wharton Magazine uses personal stories to explore various aspects of ESG, which really allowed me to connect with certain aspects of ESG. However, I would not use this magazine to find regular updates regarding ESG news because of very infrequent uploads. 

8/10 

Ayman 

Defence, Denial, and Disinformation: Uncovering the Oil Industry’s Early Knowledge of Climate Change  

Link  This article from The Earth Commons, an institute for sustainability at Georgetown University, describes the controversial history of oil firms in the climate transition. I found this fascinating because it provided a thorough background to how large oil companies discovered, yet neglected, the damage of oil production on the environment; I was unaware of this, and it encouraged me to question the strength and value of the commitments set by those same oil companies today. However, the one aspect of this article I disliked were the over-generalisations made about oil companies throughout, which I felt hinted at a slight bias. 

9/10 

Ayman 

Capital trilogy  

Kim Stanley Robinson's Science in the Capital trilogy offers a refreshingly practical take on climate fiction, focusing not on post-apocalyptic scenarios but on the real-world challenges of scientists and policymakers fighting to implement sustainable solutions. Through the halls of the National Science Foundation and Washington politics, the series (Forty Signs of Rain, Fifty Degrees Below, and Sixty Days and Counting) explores how society might transition from our carbon-dependent economy to a sustainable future. What sets these books apart for me was their grounding in actual climate science and policy, while maintaining hope that through technological innovation, political will, and social change, we can address the climate crisis. Good for anxiety about the real crisis you may be feeling! 

8/10 - A thoughtful and unique approach to climate fiction 

George :)