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Shell Withdraws From Oil Lobby Group


When you think of groups who are working to fight climate change, you probably don't think of big oil companies. But this past week, Royal Dutch Shell said it's withdrawing from a D.C.-based oil lobbying group because of disagreements about environmental policy. Amy Harder, who covers energy for Axios, tells us how that decision got made.

AMY HARDER: Shell said last year - under pressure from investors, I should note - that it was going to do a review of all its memberships of trade associations around the world. And it found that one was wholly misaligned with its positions on climate change, namely that Shell supports acting on climate change and pricing carbon emissions. And it found that a D.C.-based membership group that represents oil and gas refineries specifically did not align with that. So it is not going to renew its membership, but it did keep its membership in all others, including, notably, the American Petroleum Institute, which really is the most influential trade group here in Washington on these issues.

GARCIA-NAVARRO: When you say that they did it because under pressure, what kind of pressure?

HARDER: Well, the investor angle in this broader story of what oil and gas companies are doing on climate change is really important because investors are becoming more activist, and there's this process called shareholder democracy where investors urge companies to do things. And so it's a little bit wonky, but it's incredibly important because it ends up with things like this, which is a commitment to review its trade associations. And to my knowledge, no other oil and gas company has really committed to doing this. So Shell could be an outlier, or it could be the beginning of a trend.

GARCIA-NAVARRO: I think some people might find it surprising that a company like Shell is being vocal about climate change.

HARDER: The big picture is that for a very long time - for the next several decades at least - Shell will remain an oil and gas fossil fuel company. But they're starting to see the writing on the wall with this energy transition happening around the world. And they want to make sure that they stay profitable and relevant. But I think there's a lot of nuance and details that can get glossed over. And one important one is that their investments in this space and their work in this space such as leaving one trade group but staying in, you know, more than a dozen others, you know, is likely not going to be enough for a lot of really activist environmentalists who want wholesale changes at these companies. But what these companies say is that we are, you know, a publicly traded company with investors, and we do need to return a profit for these investors. So these companies are really trying to strike a balance there.

GARCIA-NAVARRO: Do you expect other companies to follow suit, or will this put pressure on some of these trade organizations to change their position on climate change?

HARDER: Shell is certainly one of the most progressive big oil companies in this space, but it's not the only one. One interesting trend that I'm looking at is to what degree there's a growing division between European companies and American companies. The American companies are far more cautious because just the culture in America is a lot different than that in Europe, which is - you know, it has a big climate policy across the continent. Its people are a little bit more progressive in this area than America. So that's the backdrop. There is, however, a trend here in Washington with both Exxon and ConocoPhillips actually funding a carbon tax advocacy campaign. They're actually urging Congress to pass a carbon tax. So I think that's significant, even if they haven't taken these other steps that say Shell has to remove their memberships from some of these groups.

GARCIA-NAVARRO: Amy Harder of Axios, thank you so much.

HARDER: Thank you. Transcript provided by NPR, Copyright NPR.