Total Oil: The Implications of Shifting to Renewable Energy
The global transition toward clean energy is no longer an aspirational whim of the future. The United Nations declared climate change the “defining issue of our time,” as we reach the pivotal years where undoing the damage of climate change will become more costly and difficult than in prior years.[1] With global recognition of weather pattern fluctuations and environmental degradation, big oil companies are under pressure to shift away from carbon-emitting fuels to renewables. Internationally, climate change has impacted public perception of energy sources and the major oil and gas companies are keen to remain at the forefront of this shift toward low-carbon energy. For example, while large oil company Royal Dutch Shell plc continues to make the majority of its profits from fossil fuels, “shareholder pressure, evolving new technologies and rapidly changing consumer preferences,” has forced it to re-evaluate long term strategies and begin investing in flashy projects that draw in good publicity.[2] Particularly as the global pandemic injects uncertainty over oil and gas markets, in the form of oversupply and price fluctuations,[3] major oil companies’ subcontracts for green energy initiatives, whether an initial small piezoelectric design or a massive wind farm, may play a pivotal role in shifting global markets.
Taking advantage of global interest in clean energy may strategically draw the critical eye away from the fossil fuel industry while placing a foot in the door as renewable energy further challenges oil and gas. Emerging projects, including Chevron’s plan to build “500MW of renewables to power oil and gas facilities,” suggest American oil companies are invested in the cost-effectiveness of renewable energy without shifting their reliance on fossil fuels.[4]
While Chevron’s investments in renewable energy may more aptly be described as “greenwashing,”[5] other companies such as the French multinational Total Oil may demonstrate a deeper commitment to a long-term “clean energy shift.”[6] In June of 2020, Total purchased a fifty one percent stake from SSE plc, a multinational energy company, for the development of an extensive offshore windfarm project, worth ten billion pounds,[7] off the coast of Scotland.[8] European countries are showing greater dependance on offshore windfarms as a utility-scale source of energy.[9] Total’s investment in the proposed Seagreen windfarm will be Total’s first step, or perhaps leap, into the renewables industry.[10] While some oil companies have dedicated their investments to flashier projects[11] fostering good publicity that draw the eye away from the oil itself, Total’s massive offshore wind investment in conjunction with recent press statements suggests true commitment to the shift towards renewables. The new Scotland project will become the country’s largest offshore windfarm, designed to “make a significant contribution to the UK’s green recovery from coronavirus.”[12] With a projected completion date of 2022, Seagreen windfarm should begin contributing over a thousand megawatts of electricity to the UK grid.[13]
While the project is a promising step towards a transition away from carbon-emitting sources of energy, Total does not hesitate to express the costs of such a transition.[14] At the Europlace Infraweek Conference, Patrick Pouyanne, chief executive officer of Total SE, warned that the transition to clean energy will be a costly “journey” that will require political support.[15] Pouyanne suggested big oil’s efforts in shifting to renewables need to be met with adequate policy.[16] While Total’s ambition to become a net zero emission company for all its European businesses by 2050[17] is an admirable goal, the company must balance this transition to clean energy with shareholder interests. Pouyanne emphasized that Total must remain an “attractive and reliable long-term investment,”[18] inviting a skeptical audience to question whether Total’s ambitious declaration is a mere publicity stunt. Whether or not Total’s investment in the Seagreen wind farm project has ulterior positive publicity motives, the investment itself sends a powerful signal to other major oil companies. Declaring a goal for net zero emissions by 2050 is admirable, but the true test will be to monitor what further transformative efforts Total will make after the development of the Seagreen wind farm.
Zoe Williams is a staff member of Fordham International Law Journal Volume XLIV.
This is a student blog post and in no way represents the views of the Fordham International Law Journal.
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[1] Climate Change, United Nations, https://www.un.org/en/sections/issues-depth/climate-change/.
[2] Timothy Abington & Kelly Giblom, Shell Leads Big Oil in the Race to Invest in Clean Energy, Bloomberg (Sept. 3, 2019), https://www.bloomberg.com/news/articles/2019-09-04/shell-leads-big-oil-in-the-race-to-invest-in-clean-energy-tech.
[3] See Ken Silverstein, Oil and Gas Companies see Opportunity in Offshore Wind Energy, Forbes (Apr. 16, 2020), https://www.forbes.com/sites/kensilverstein/2020/03/16/oil-and-gas-companies-see-opportunity-in-offshore-wind-energy/?sh=184224e52ede.
[4] Karl-Erik Stromsta, Chevron to Build 500MW of Renewables to Power Oil and Gas Facilities – and It’s Considering More, Green Tech Media (July 30, 2020), https://www.greentechmedia.com/articles/read/chevron-to-build-500mw-of-renewables-globally-to-power-oil-and-gas-facilities.
[5] Miriam A. Cherry & Judd F. Sneirson, Chevron, Greenwashing, and the Myth of ‘Green Oil Companies,’ 3 J. of Energy, Climate, & Env’t 133 (2012).
[6] William Mathis & Francois De Beaupuy, Total begins clean energy shift with Scottish wind farm investment, World Oil (June 3, 2020), https://www.worldoil.com/news/2020/6/3/total-begins-clean-energy-shift-with-scottish-wind-farm-investment.
[7] See William Mathis, Scotland’s new $10 billion wind project could appeal to diversifying oil companies, World Oil (June 10, 2020), https://www.worldoil.com/news/2020/6/10/scotland-s-new-10-billion-wind-project-could-appeal-to-diversifying-oil-companies.
[8] Mathis supra note 6.
[9] See id.
[10] See id.
[11] See Kimberly E. Diamond, Footfall and Social Media v. Concentrated Solar Power: When the Power of a Choice in a Behavior-Based Economy can be More Powerful than the Power of the Sun, 28 Fordham Env’t L. Rev. 136, 185 (2017) (discussing the psychological appeal of Shell’s investment in a Pavegen Piezoelectric soccer field in the Morro da Mineira favela community in Rio de Janeiro, Brazil).
[12] Press Release, Total, Total Enters into a Giant Offshore Wind Farm Project in Scottish North Sea, (June 3, 2020), https://www.total.com/media/news/press-releases/total-enters-giant-offshore-wind-farm-project-scottish-north-sea.
[13] See id.
[14] See Sam Meredith, Big Oil CEO says going green ‘will have a cost for everybody’ – and governments need to explain that, Consumer News & Bus. Channel (Feb. 3, 2021), https://www.cnbc.com/2021/02/03/oil-total-ceo-says-going-green-will-have-a-cost-for-everybody.html.
[15] Id.
[16] See id.
[17] See Press Release, Total, Total Adopts A New Climate Ambition to get to Net Zero By 2050 (May 5, 2020), https://www.total.com/media/news/total-adopts-new-climate-ambition-get-net-zero-2050.
[18] Id.