## 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.

## Strategic Accommodation in the Post-Paris Era?

We now proceed to investigate whether the majors’ support for carbon pricing represents an effort to prevent or hedge against more costly and threatening alternatives, by examining recent political and regulatory developments in the EU and the United States.

In Europe, regulatory pressures have continued to build as a result of the EU’s progressively bolder climate and energy goals. Already in 2007, the EU adopted 20 percent emissions reductions, renewable energy, and energy efficiency targets (compared to 1990 levels), which have been implemented through binding legislation. A longer-term 2050 target of cutting emissions by 80–95 percent compared to 1990 levels was agreed two years later. In 2014, ambitions were scaled up to at least 40 percent reductions in GHG emissions, 32 percent renewable energy deployment, and 32.5 percent improvement in energy efficiency by 2030. To achieve these ends, the EU aimed for a 43 percent cut in EU emissions trading scheme (ETS) emissions compared to 2005 and a 30 percent cut in emissions compared to 2005 in non-ETS sectors, such as transport. These goals have been translated into differentiated binding targets for individual member states (Eikeland and Skjærseth 2019). The new commission president has also proposed raising the overall EU target to at least 50 percent reductions by 2030, and most European countries now support a net zero emissions target by 2050.

In the United States, however, federal political and regulatory pressures have subsided. After a failed attempt to negotiate a national cap-and-trade scheme in 2010, the Obama administration launched the Clean Power Plan (CPP), the centerpiece of the US pledge to cut its GHG emissions, as per the Paris Agreement. The CPP target was to reduce emissions from utilities by 32 percent by 2030 and to phase out coal by introducing emissions standards favoring natural gas. However, the plan was later blocked by the US Supreme Court and never entered into effect.

Since the election of President Trump, the administration and Congress have taken several steps to roll back or wholly eliminate existing climate regulations. To replace the CPP, the EPA proposed the Affordable Clean Energy (ACE) Rule in 2018, which aims to upgrade technology and improve energy efficiency, but allows for the continued use of coal. The ACE also lets states set their own rules, in place of federal rules. Furthermore, the Trump administration has removed, repealed, or weakened a range of air-pollution and emissions regulations. According to the New York Times,12 ninety-five climate and environmental regulations are being rolled back, including the prohibition against flaring from gas wells and measures to reduce methane emissions, rules that govern how refineries monitor pollutions in surrounding communities, and many more. Other regulations have been removed and reinstated as a result of legal challenges, while some remain bogged down in court. The largest number of rollbacks concern air pollution and emissions (twenty-four), followed by drilling and extraction (eighteen)—all of which ease the regulatory burden on the oil and gas industry.

On the other hand, new pressures have emerged from US courts. Since 2015, a wave of legal challenges has washed over ExxonMobil in particular. First, the attorneys general of New York, Massachusetts, and the US Virgin Islands launched investigations into whether Exxon had misled the public and shareholders about the science of global warming and how climate-related risk might hurt their investors. By 2019, this legal battle had reached the US Supreme Court,13 which declined Exxon’s request that records be kept secret and forced it to turn over forty years’ worth of documents to the office of Massachusetts attorney general Maura Healy.14 Also other majors have been targeted: since 2017, fourteen cities and municipalities and the state of Rhode Island have filed lawsuits against Chevron, BP, Shell, Exxon, and ConocoPhillips, claiming that these majors have attempted to undermine science and mislead the public about the consequences of climate change. In 2018, some courts dismissed such cases, arguing the issues should be resolved by Congress or the president, to which many cities have filed appeals. Regardless, this upsurge in lawsuits has indeed raised concerns. As Chevron stated in a filing with the Securities and Exchange Commission, climate litigation could have a “material adverse effect on the company,” “curtail profitability,” and make its business model “economically infeasible.”15

Overall, regulatory pressures have grown steadily in Europe as the result of the EU’s early institutionalization of climate policies and the mandate to adopt gradually bolder goals. However, it is not apparent how the majors’ support for carbon pricing could have helped them offset or hedge against these developments. In the United States, the heightened regulatory risks under Obama have now subsided, and the political climate has turned in favor of business as usual for fossil fuel producers. Thus, there is a lack of federal-level regulatory threats that majors would seek to offset by proposing a moderate carbon tax as an alternative.

## Economic Interests, Competition, and a Gray Transition Toward a Lower-Carbon Future

We will return to the question of strategic accommodation after considering whether a moderate carbon price might advance the economic interests, profit opportunities, and market positions of the majors. We begin by examining how a carbon price affects oil and gas differently as regards competition.

Simply put, having a price on carbon increases the cost of producing energy relative to its carbon intensity. Therefore, carbon pricing affects the relative competitiveness of rival energy sources (with differing carbon intensities) that compete against each other in the market. Importantly, oil and gas generally serve different markets. Natural gas is used to generate electricity in the power sector, for combined heat and power in heavy industry, and for heating and cooling in residential buildings. Little natural gas is used for transport. Oil, by contrast, predominates in the transport sector, but is also used for noncombustion purposes. Relatively little oil has been used for electric power.

Natural gas and oil also face distinct competitive dynamics in power and transport. In power markets, gas competes with coal, renewables, and nuclear for market shares. Since the carbon intensity of natural gas is less than half of coal, the direct effect of carbon pricing is to raise the costs of coal much more than the cost of gas. Thus, the indirect effect on competition is to shift demand away from coal and toward lower-emitting and cheaper options like natural gas and renewables. To the extent that natural gas can replace coal, gas producers may benefit from a carbon fee that would raise the costs of its rivals and impede the ability of coal to compete, or even survive, in a carbon-priced market.

In transport, however, oil is not currently facing heavy competition from rival fuels. The widespread use of petroleum products—like gasoline and diesel for automobiles, jet fuels for aviation, and heavy- or low-sulfur oil fuels for shipping—is not yet faced with the threat of an immediate switch to less-polluting alternatives.16 Carbon pricing raises the direct costs of oil production and refining, but, because of the lack of significant competition, it does not have a substantial indirect effect on the dominant market position of oil.17 Kaufman and Gordon (2018) also conclude that a US carbon tax would have a considerable effect on the power market, triggering a dramatic decline for coal (28–84 percent by 2030) and a parallel growth for natural gas and renewables. However, they estimate that the effect on oil markets will be small, due largely to the lack of competition and the continued dominance of petroleum fuels.

### The Rise of Natural Gas and Competitive Renewables

Only a decade ago, coal was an important source of energy for electric power generation in the United States and Europe, accounting for nearly 46 percent of US power and 25.5 percent of European power in 2009. Natural gas, a more expensive and less abundant option at that time, provided only 22 percent of US electric power and 23 percent of European electric power.18 Nonhydroelectric renewable sources like wind and solar represented a small to miniscule share of electric power generation on both continents.

Since then, however, technological and operational advances have triggered a natural gas revolution. Due to the integration of two key technologies, horizontal directional drilling and hydraulic fracturing (fracking), shale gas locked in tight hard-rock and coal seams can now be tapped in previously unrecognized quantities and used as a cheaper and cleaner alternative to coal in electric power generation (Bang and Skodvin 2014; Rabe 2014; Smith 2020). In the United States, which sits on some of the largest shale fields in the world, the gas output grew by about 40 percent between 2007 and 2017,19 transforming the country from a net importer to a world-leading exporter of natural gas. This shift was also bolstered by the development of liquified natural gas (LNG) technologies, which enable shipping of cooled-down gas in liquid form to new markets.20

New, renewable energy sources like wind and solar have also become significant competitors to coal and natural gas (Aklin and Urpelainen 2018). Between 2008 and 2018, the generation of nonhydroelectric renewable electricity nearly doubled, to account for about 9 percent of US power.21 In Europe, too, the growth in renewable power from 2008 to 2018 largely reflects the expansion of nonhydroelectric, wind, and solar generation.22 Behind these statistics lies a long-haul process of policy layering (Laird and Stefes 2009), with governments introducing support programs for renewable energy, such as production and investment tax credit, feed-in tariffs, and renewable portfolio standards, without dismantling the existing fossil fuel regime (Laird 2016; Stokes and Breetz 2018). By 2018, much of the new onshore wind capacity had become cost-competitive to fossil fuel–based generation.

However, widespread uptake of renewables to substitute fossil fuels will require significant changes to electricity systems to find solutions to the intermittency problem. Whether a 100 percent renewable power system is feasible remains disputed (Clack et al. 2017; Jacobson et al. 2015): many argue that there will be a widespread need for baseload power from gas or coal, to compensate for the intermittency of wind and solar power. Storage options like batteries remain costly, and solutions for balancing excess power with shortages elsewhere require larger and modernized electricity systems. For some time into the future, then, electric utilities are likely to remain dependent on a significant share of baseload power that can allow the power grid to adjust to wide swings in demand.

In the context of climate policy, this leaves space for natural gas, which burns more cleanly than coal, to become the favored baseload partner of intermittent renewables in the ongoing energy transition. As opposed to a truly “green” transition, characterized by the rapid uptake and integration of renewable energy in power, natural gas would be well served by a “gray” transition, in which it could absorb the market share of coal and become a major bridge fuel to renewables. Moderate carbon-pricing regulation, which penalizes coal versus gas and may trigger extensive coal-to-gas switching, can support the realization of a gray transition. Beyond 2030, however, to the extent that stored, renewable power becomes more competitive and the electricity grid is modernized, a higher carbon price may begin to penalize gas versus renewables. Therefore, the positive effect on the competitive position of gas is likely to be limited to the short and medium terms.23

### From Big Oil to Big Gas? Change in the Majors’ Gas Production and New Market Opportunities

We now proceed to examine the majors’ evolving stake in natural gas expansion. Figure 1 shows the percentage growth and/or decline in natural gas and oil production for the eight majors from 2007 to 2017. Table 1 translates these percentage changes into absolute figures. We see that most majors boosted their production of natural gas and reduced their production of oil over that decade. Total and Equinor rank at the top, with almost 40 percent growth. Shell and ENI come close, with an upsurge of about 30 percent, followed by Chevron, with an increase of 20 percent, and Exxon, with nearly 10 percent. Altogether, this represents a 25 percent increase in gas production.

Figure 1

Percentage change in oil and gas production, 2007–2017

Figure 1

Percentage change in oil and gas production, 2007–2017

Table 1
Absolute and percentage change in oil and gas production, 2007–2017
Daily ProductionChange in Production
2007 (k bbl/d)2017 (k bbl/d)2007–2017 (k bbl/d)2007–2017 (%)
Exxon
Oil 2,616 2,283 −333 −13
Gas 1,564 1,702 138
ConocoPhillips
Oil 982 710 −272 −28
Gas 848 545 −303 −36
Shell
Oil 1,818 1,730 −88 −5
Gas 1,416 1,839 423 30
BP
Oil 2,414 2,260 −154 −6
Gas 1,357 1,291 −67 −5
Total
Oil 1,509 1,346 −163 −11
Gas 807 1,111 304 38
Chevron
Oil 1,756 1,723 −33 −2
Gas 837 1,005 169 20
Equinor
Oil 1,165 1,139 −26 −2
Gas 674 941 267 40
ENI
Oil 1,020 852 −168 −16
Gas 686 877 191 28
Daily ProductionChange in Production
2007 (k bbl/d)2017 (k bbl/d)2007–2017 (k bbl/d)2007–2017 (%)
Exxon
Oil 2,616 2,283 −333 −13
Gas 1,564 1,702 138
ConocoPhillips
Oil 982 710 −272 −28
Gas 848 545 −303 −36
Shell
Oil 1,818 1,730 −88 −5
Gas 1,416 1,839 423 30
BP
Oil 2,414 2,260 −154 −6
Gas 1,357 1,291 −67 −5
Total
Oil 1,509 1,346 −163 −11
Gas 807 1,111 304 38
Chevron
Oil 1,756 1,723 −33 −2
Gas 837 1,005 169 20
Equinor
Oil 1,165 1,139 −26 −2
Gas 674 941 267 40
ENI
Oil 1,020 852 −168 −16
Gas 686 877 191 28

By contrast, oil production has dropped: ENI scaled back its oil production by 15 percent, Total by 10, Exxon by 12 percent, and Shell by 5 percent. Perhaps puzzlingly, ConocoPhillips and BP show a different tendency, with reduced oil and gas production. This is linked to explicit strategies for selling off assets: BP completed more than US$32 billion of upstream divestments following the 2010 Deepwater Horizon accident.24 ConocoPhillips has followed a US$ 10 billion divestiture program since 2009, selling off noncore assets, limiting annual capital spending, and reducing debt.25

The majors have also invested substantially in new natural gas ventures. For example, BP launched four large gas projects in 2019 and plans to start another eleven projects by 2022.26 Exxon is pursuing two major LNG projects in Papua New Guinea and Mozambique,27 while Chevron has added two giant LNG projects in Australia to its portfolio.28 Total acquired Engie’s LNG business in 2018 and is now aiming to double its sales of LNG by 2020.29

From the companies’ forward-looking statements and strategies, we also note that the majors place significant emphasis on opportunities to grow markets for natural gas in the medium term, seeing such opportunities as linked to climate or clean-air policies, increased gas supply, and advances in LNG transport. All the companies anticipate strong growth for natural gas in power generation but also in heavy industry. For example, BP expects its delivery of gas to power to increase substantially in the next decade, eying “a potential for doubling the operational cash flow from gas.” They link this potential for growth in the position of gas to its being the cleanest fossil fuel and to the fact that “demand growth predicted for gas is twice that of oil.”30 Total speaks of a large potential for coal-to-gas switching31 as well as greater LNG sales to emerging economies.32 Also, Exxon foresees an emerging “golden age”33 for natural gas, linked both to “policy-aided” coal-to-gas switching in power and heavy industry and to a potentially steep rise in global LNG demand.34 Equinor, arguing that the displacement of coal by gas in Europe will depend on a carbon price above € 30 per ton, views China and the emerging Asian economies as drivers of growing demand for LNG.35

Overall, this reflects an increased focus on expanding sales and the market shares for natural gas among the majors, particularly by replacing coal in power and industry.36 This trend has led business analysts to refer jokingly to Big Oil as an emerging “Big Gas” industry.37

### Coal-to-Gas Switching in Regional and Global Markets

By 2016, the rise of cheap, natural gas had led to a turnaround in US power: for the first time in history, natural gas surpassed coal, providing 34 percent of electricity generation, whereas coal had dropped to about 31 percent. By 2018, coal represented only 27 percent, while gas had expanded to a 35.5 percent share of US power generation.38 Although the main factors that have enabled gas to displace coal have been lower prices and the upsurge in supply, state-level carbon pricing schemes, combined with regulations governing industrial pollutant emissions (like the mercury and toxic standards), have also created financial incentives for coal-to-gas switching in the absence of a federal carbon price.39

In Europe, however, due to historically high gas prices, the share of gas in power had dropped to about 17 percent in 2013, while the share of coal remained stable at 26 percent. However, by 2016, coal had dropped to 21 percent, while gas covered around 20.5 percent of European power generation.40 Problems with the EU ETS, which resulted in a low and ineffective carbon price, have been linked to this lower level of coal-to-gas switching (Stern 2017). Indeed, in the United Kingdom, a higher carbon price after the adoption of a price floor, combined with emissions performance standards, led to a dramatic drop in coal, from 42 to 10 percent between 2012 and 2016, and a parallel growth for gas, from 24 to 42 percent.41 But according to the International Energy Agency,42 a recovery of the ETS carbon price around € 30 per ton (as in 2019), combined with a high influx of US LNG (which pushes European gas prices further down), puts gas-fired capacity within the competitive range for coal-to-gas switching.

Europe and the United States have the greatest opportunities for coal-to-gas switching, thanks to existing infrastructure that allows for immediate displacement of around half of the coal-fired power output.43 Globally, the potential is more uncertain. In emerging economies like China and India, which have abundant, low-cost coal and represent 60 percent of global coal demand, there is not as much spare, gas-fired capacity to enable immediate coal-to-gas switching. Coal plants are also younger and more efficient, and gas prices are higher. However, clean-air policies have boosted Chinese demand for gas by 30 percent since 2017, indicating substantial potential for replacing coal-fired boilers with gas use in industry and residential buildings, and India has stated its ambitions to expand the use of gas in industry, residential cooking, and water heating. But as the IEA points out,44 the potential for coal-to-gas switching depends on a combination of regional gas and LNG prices; transport-enabling infrastructure, such as terminal capacity; and regulatory policy, such as carbon pricing—all of which make gas more competitive.

Overall, our analysis shows that carbon pricing can enable a gray transition toward a lower-carbon future, offering substantial economic opportunities for an emerging Big Gas industry to increase its market share in electric power and heavy industry.

## From Threat to Opportunity: Strategic Accommodation or Economic Interests?

Our analysis has shown that the majors’ advocacy for the Paris Agreement and a US carbon tax is unlikely to represent a case of feigned support or hedging. In 2009, when (some) US majors began to support federal emissions trading, they faced the tangible threat of costlier EPA regulation being adopted in the absence of a cap-and-trade scheme. By contrast, the majors’ support for a federal carbon tax does not aim to offset the adoption of more drastic alternatives. In the Trump era of US politics, the White House has disputed the need for climate action and has focused on eliminating existing federal regulations, not least rules that affect and restrict oil and gas production. The most serious threat facing the majors today appears to be costly legal settlements, which may explain the climate liability waiver included in the original Baker–Schultz Plan. On the other hand, it may be that the majors see the Trump administration as a mere blip on the screen and that more radical regulation, such as a Green New Deal (see Rifkin 2019), can be politically feasible, beyond that administration’s term in office. In this view, the majors’ advocacy for a moderate US tax could reflect a precautionary, longer-term strategy. Still, the direction of US climate politics remains a matter of speculation.

A looser interpretation of strategic accommodation, as in Levy and Newell’s (2005) idea of corporate support to environmental policy being a means for maintaining corporate legitimacy, highlights the added value of appearing “responsible” through advocacy for carbon pricing. Indeed, the global majors are highly visible companies open to public criticism: if they appear to ignore calls for climate action, they may incur significant reputational costs.45 The added benefit of accommodating public pressures to appear responsible need not conflict with our main finding: that a combination of policy, technology, and market change has shifted the economic interests of majors toward new business opportunities related to natural gas expansion—in particular, coal-to-gas switching in electric power and heavy industry. Carbon pricing, with its indirect effect on competition, can unlock a considerable potential for immediate coal-to-gas switching in European and US power and for replacing the use of coal with gas in heavy industry and residential buildings in emerging economies like China and India. As expected by the economic interest–based perspective, moderate carbon pricing gives natural gas a competitive advantage while impeding coal’s ability to survive the transition toward a lower-carbon future. This indicates that majors’ support for the Paris Agreement and a US tax also reflects a strategy for strengthening their market position and profit opportunities through the ongoing energy transition, and thus their emerging economic interest in such regulation.

Why, then, do cases of “lobbying duplicity” still occur? For example, in 2018, BP put more than US$13 million into the opposition campaign against Initiative-1631 for a Washington State carbon tax, arguing that their fuel-producing oil refineries had received unfair treatment.46 A report published in March 2019, widely covered by the world press, also claimed that Exxon, Shell, Chevron, BP, and Total spend US$ 195 million a year to block, delay, or control climate regulations.47 These cases provide examples of how large majors have mixed interests, such as those linked to gas versus oil refineries. For oil refineries, a carbon price raises the cost of production without adding benefits, such as the opportunity to expand markets. Importantly, they show that the majors’ support for climate regulation should not be seen as unconditional: it has been restricted to proposals and frameworks advantageously designed to enable them to pursue narrow economic ends. To be sure, we expect majors to oppose other types of climate regulations that do not provide benefits or that serve to strengthen their rivals, such as rules that limit upstream oil and gas exploration and drilling activities or renewable portfolio standards and feed-in tariffs. According to the logic of competition by means of regulation, Big Gas is likely to resist or seek to delay and water down policies that would enable more rapid upscaling and integration of renewables, and thus a greener transition in electric power markets, which would eliminate the window of opportunity for gas to become a major bridge fuel. As the Guardian revealed in 2015, Shell has lobbied to undermine EU renewable energy targets: in a letter to EU Commission president Barroso in 2011, Shell maintained that a market-led strategy of gas expansion would save Europe € 500 billion in its transition to a low-carbon energy system, compared with an approach centered on renewables.48

## Conclusions

This article has discussed whether Big Oil’s united support for carbon pricing in the post–Paris Agreement period is motivated by strategic accommodation or a shift in its economic interests toward natural gas expansion, facilitated by advantageously designed frameworks. We have found limited grounds for interpreting Big Oil’s advocacy as a case of feigned support or hedging, although its support for the Paris Agreement and a US tax has the added value of accommodating public demands for greater corporate responsibility. Instead, we have argued that an evolving Big Gas industry may benefit from the regulatory frameworks it now supports. This is mainly due to the indirect effects of a moderate carbon price on the competitive ability of natural gas to become the preferred baseload partner of intermittent renewables and a major bridge fuel in a gray transition toward a lower-carbon future. To be sure, it is also in the economic interest of majors to delay a green(er) transition that would bring faster upscaling and integration of renewables. Their support for moderate carbon pricing should therefore not be confused with unconditional support for climate policy. On the contrary, the majors can be expected to oppose, delay, or water down any type of regulation or policy support that would strengthen rival renewable energy. But by supporting favorably designed and moderate carbon pricing, the majors may profit from expanding gas markets, while simultaneously “greening” their image by acting like climate protagonists on the regulatory scene.

Our findings underscore the importance of studying the competitive dynamics behind the evolving industry demand for climate policy and the perverse motives that underpin pro-regulation business groups’ participation in carbon coalitions (see also Betsill and Stevis 2016). We have shown that incumbent business interests are not static but subject to change as a result of shifting technological, market, and policy conditions. The possible reinvention of Big Oil as a Big Gas industry also speaks to the question of whether polluters are not simply losers but “convertibles” (Kelsey 2018) that can be recruited to coalitions in support of low-carbon transitions (Roberts et al. 2018). However, there may be negative consequences and costs associated with such recruitment. While a prominent role for natural gas in the energy transition can reduce GHG emissions immediately and substantially, thanks to the sizable potential for coal-to-gas displacement,49 the entrenchment of natural gas may also cause negative feedback and lock-in. It may become a barrier to deeper decarbonization in the long run, as expanding gas power involves highly capital-intensive investments in plants and pipelines with a lifetime of multiple decades (Jordan and Matt 2014; Meckling 2019). As we have seen, moderate carbon pricing will not reduce global oil and gas output, which, as the Intergovernmental Panel on Climate Change has argued, is essential to avoiding dangerous climate change in the long term.

Our findings also shed light on a proposition advanced by economic theories of regulation: that public-interest climate policies are not necessarily “Olsonian” but can also be “Stiglerian,” providing profitable benefits and competitive advantages to some industry groups, while harming others. As rival energy providers compete for market shares through a lower-carbon or gray transition, incumbent polluters may support certain types of climate policy if they eye opportunities for advantageous redistribution of wealth through regulation. Finally, as industry groups can burden competitors and reap new market benefits through climate regulation, their economic interests may also explain their emerging policy support.

## Notes

1.

Many of these oil and gas giants also rank at the very top of this list: Chevron (no. 1), ExxonMobil (no. 2), BP (no. 4), Shell (no. 6), ConocoPhillips (no. 9), and Total (no. 13).

2.

Comparable data on production for the past decade are available only when the companies have used consistent reporting schemes. Data from older reports (e.g., twenty years back) do not necessarily distinguish between oil and natural gas production.

3.

“Barrel of oil equivalent” is based in the approximate energy released by combusting one barrel of crude oil; this is an energy unit used for combining or comparing oil and gas reserves or production.

4.

The conversion factor for natural gas depends on the properties of the gas in question. We have used an approximate, commonly used conversion factor where one thousand cubic feet of natural gas contain one-sixth of the energy of a barrel of oil (1,000 scf = 1/6 boe).

5.

Letter to Christiana Figueres, available at: https://www.total.com/sites/g/files/nytnzq111/files/atoms/files/letter_to_christiana_figueres.pdf, last accessed June 18, 2020.

6.

BP, “Oil and Gas Majors Call for Carbon Pricing,” June 1, 2015, available at: https://www.bp.com/en/global/corporate/news-and-insights/press-releases/oil-and-gas-majors-call-for-carbon-pricing.html.

7.

Ed Crooks, “Exxon Chief Urges Trump to Back Climate Agreement,” Financial Times, May 26, 2017, available at: https://www.ft.com/content/fcf73abc-4202-11e7-9d56-25f963e998b2, last accessed June 29, 2020

8.

Matt Egan, “Why Big Oil Wants Trump to Stay in Paris Climate Deal,” CNN Business, April 18, 2017, available at: https://money.cnn.com/2017/04/18/investing/big-oil-paris-deal-trump/index.html, last accessed June 18, 2020.

9.

“Climate Liability Waiver Dropped from Major Carbon Tax Proposal,” Climate Liability News, September 12, 2019, available at: https://www.climatedocket.com/2019/09/12/climate-liability-waiver-carbon-tax-baker-schultz/, last accessed June 18, 2020.

10.

Josh Siegel, “Yes or No? Is the Media Fair?,” Washington Examiner, May 20, 2019, available at: https://www.washingtonexaminer.com/policy/energy/oil-giants-bp-and-shell-pledge-1-million-each-to-republican-backed-carbon-tax, last accessed June 18, 2020.

11.

Miranda Green and Alex Gangitano, “Oil Companies Join Blitz for Carbon Tax,” The Hill, 2019, available at: https://thehill.com/policy/energy-environment/445100-oil-companies-join-blitz-for-carbon-tax, last accessed June 18, 2020.

12.

See Nadja Popovich, Livia Albeck-Ripka, and Kendra Pierre-Louis, “The Trump Administration Is Reversing 100 Environmental Rules. Here’s the Full List,” New York Times, updated May 20, 2020, available at: https://www.nytimes.com/interactive/2020/climate/trump-environment-rollbacks.html, last accessed June 18, 2020.

13.

David Hasemyer, “Fossil Fuels on Trial: Where the Major Climate Change Lawsuits Stand Today,” InsideClimateNews, January 17, 2019, available at: https://insideclimatenews.org/news/04042018/climate-change-fossil-fuel-company-lawsuits-timeline-exxon-children-california-cities-attorney-general, last accessed June 18, 2020.

14.

Clark Mindock, “US Supreme Court Rejects Exxon Challenge to Climate Change Lawsuit That Could Reveal 40 Years of Documents,” The Independent, January 8, 2019, available at: https://www.independent.co.uk/news/world/americas/exxon-supreme-court-climate-change-lawsuit-documents-global-warming-a8716451.html, last accessed June 18, 2020.

15.

Lee Wasserman and David Kaiser, “Beware of Oil Companies Bearing Gifts,” New York Times, July 25, 2018, available at: https://www.nytimes.com/2018/07/25/opinion/carbon-tax-lott-breaux.html, last accessed June 18, 2020.

16.

In the longer term, however, a shift toward electric vehicles, or competition from biofuels or hydrogen, could fundamentally threaten the position of oil as the dominant source of energy for transport.

17.

Interview with oil and gas major, 2018.

18.

See EIA, available at: https://www.eia.gov/coal/index.php, last accessed June 18, 2020; EEA, available at: https://www.eea.europa.eu/data-and-maps/indicators/electricity-production-by-fuel-1/electricity-production-by-fuel-assessment-3, last accessed June 18, 2020.

19.

D. Yergin and S. Andrus, “The Shale Gale Turns 10: A Powerful Wind at America’s Back,” Strategic Report, HIS Markit, 2018, available at: https://cdn.ihs.com/www/pdf/Shale-Gale-turns10-powerful-wind-Americas-back.pdf, last accessed June 18, 2020.

20.

ExxonMobil vice president Andrew P. Swiger, “The Unconventional Potential: Opportunities for Shale Gas Development in Europe and Beyond,” October 12, 2011, available at: https://corporate.exxonmobil.com/en/News/Newsroom/Speeches/2011/1012_The-Unconventional-Potential-Opportunities-for-Shale-Gas-Development-in-Europe-and-Beyond, last accessed June 18, 2020.

21.

EIA, available at: https://www.eia.gov/todayinenergy/detail.php?id=38752, last accessed June 18, 2020.

22.

Eurostat, “Renewable Energy Statistics,” available at: https://ec.europa.eu/eurostat/statistics-explained/index.php/Renewable_energy_statistics, last accessed June 18, 2020.

24.

BP, “Upstream Investor Day,” December 2014, available at: https://www.mckinsey.com/industries/oil-and-gas/our-insights/can-carbon-prices-fire-up-gas-demand-in-electricity-generation, last accessed June 18, 2020.

25.

ConocoPhillips, “Building on Strengths,” 2009 Summary Annual Report, available at: http://www.annualreports.com/HostedData/AnnualReportArchive/c/NYSE_COP_2009.pdf, last accessed June 18, 2020.

26.

BP, “Major Projects 2019,” available at: https://www.bp.com/en/global/corporate/investors/upstream-major-projects/major-projects-2019.html, last accessed June 18, 2020; Gaurav Sharma, “Oil Majors Are Stepping Up Their Natural Gas Game,” Forbes, July 24, 2018, available at: https://www.forbes.com/sites/gauravsharma/2018/07/24/oil-majors-are-stepping-up-their-natural-gas-game/#1e553fca7ddc, last accessed June 18, 2020.

27.

ExxonMobil, investor information, March 6, 2019.

28.

Chevron, available at: https://www.chevron.com/projects, last accessed June 18, 2020.

29.

Total, “Total Closes the Acquisition of Engie’s Upstream LNG Business and Becomes World #2 LNG Player,” July 13, 2018, available at: https://www.total.com/media/news/press-releases/total-closes-acquisition-engies-upstream-lng-business-and-becomes-world-2-lng-player, last accessed June 18, 2020; Total, “Results and Outlook,” February 2019, available at: https://www.total.com/sites/g/files/nytnzq111/files/atoms/files/results-2018-and-outlook-presentation.pdf, last accessed June 18, 2020.

30.

BP, “Upstream Investor Day,” December 2014, available at: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-lamar-mckay-presentation.pdf, last accessed June 18, 2020; BP, “Advantaged Gas Portfolio and Growth,” 2018, available at: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/oman-2018-investor-day-breakout4.pdf, last accessed June 18, 2020.

31.

Total, “Energy Outlook 2040,” February 2019, available at: https://www.total.com/sites/g/files/nytnzq111/files/atoms/files/total-energy-outlook-and-integrating-climate-into-strategy.pdf, last accessed June 18, 2020.

32.

Total, “Investor Day—Focus Presentations,” February 2019, available at: https://www.total.com/sites/g/files/nytnzq111/files/atoms/files/total-energy-outlook-and-integrating-climate-into-strategy.pdf, last accessed June 18, 2020.

33.

David James, “Papua New Guinea’s LNG Capacity Could Double, Says ExxonMobil SVP,” Business Advantage PNG, November 27, 2018, available at: https://www.businessadvantagepng.com/papua-new-guineas-lng-capacity-could-double-says-exxonmobil-svp/, last accessed June 18, 2020.

34.

ExxonMobil, “2018 Sellside Meeting,” September 17, 2018, available at: https://corporate.exxonmobil.com/-/media/Global/Files/investor-relations/other-investor-presentations/2018-Sell-Side-meeting.pdf, last accessed June 18, 2020.

35.

Equinor, “Gas Market Update,” 2019, available at: https://www.equinor.com/en/investors/events-and-presentations.html, last accessed June 18, 2020.

36.

Ernest Scheyder, “Energy Giants Opening Natural Gas Spigots, Fueling Profit Rise,” Reuters, July 23, 2018, available at: https://www.reuters.com/article/us-oil-majors-preview/energy-giants-opening-natural-gas-spigots-fueling-profit-rise-idUSKBN1KD0F2, last accessed June 18, 2020.

37.

Rakteem Katakey and Tara Patel, “Big Oil’s Plan to Become Big Gas,” Bloomberg, June 1, 2015, available at: https://www.bloomberg.com/news/articles/2015-06-01/big-oil-becomes-big-gas-as-climate-threat-spurs-tussle-with-coal, last accessed June 18, 2020.

38.

EIA, “Today in Energy,” available at: https://www.eia.gov/todayinenergy/detail.php?id=31672, last accessed June 18, 2020.

39.

International Energy Agency, “The Role of Gas in Today’s Energy Transition,” 2019, available at: https://webstore.iea.org/the-role-of-gas-in-todays-energy-transitions, last accessed June 18, 2020.

40.

EEA, “Overview of Electricity Production and Use in Europe,” December 18, 2018, available at: https://www.eea.europa.eu/data-and-maps/indicators/overview-of-the-electricity-production-2/assessment-4, last accessed June 18, 2020.

41.

G. Wilson, I. Staffell, and N. Godfrey, “Britain’s Electricity Since 2010: Wind Surges to Second Place, Coal Collapses and Fossil Fuel Use Nearly Halves,” The Conversation, January 6, 2020, available at: available at: http://theconversation.com/britains-electricity-since-2010-wind-surges-to-second-place-coal-collapses-and-fossil-fuel-use-nearly-halves-129346, last accessed June 18, 2020.

42.

EEA, “Overview of Electricity Production and Use in Europe,” December 18, 2018, available at: https://www.eea.europa.eu/data-and-maps/indicators/overview-of-the-electricity-production-2/assessment-4, last accessed June 18, 2020.

43.

International Energy Agency, “The Role of Gas in Today’s Energy Transition,” 2019, available at: https://webstore.iea.org/the-role-of-gas-in-todays-energy-transitions, last accessed June 18, 2020.

44.

EEA, “Overview of Electricity Production and Use in Europe,” December 18, 2018, available at: https://www.eea.europa.eu/data-and-maps/indicators/overview-of-the-electricity-production-2/assessment-4, last accessed June 18, 2020.

45.

Another interpretation is that oil majors support a US carbon tax in order to appear green but in fact consider such a tax to be politically infeasible.

46.

While substantial carve-outs were made for coal and heavy industries exposed to international trade, refineries were not granted any exemptions. “Because of that, I can’t support it. But we are not going to fight it, either,” Shell CEO van Beurden argued. BP’s Cherry Point refinery manager also said their opposition was due to the exemption made for other polluters.

48.

Arthur Neslan, “Shell Lobbied to Undermine EU Renewables Targets, Documents Reveal ,” The Guardian, April 27, 2015, available at: https://www.theguardian.com/environment/2015/apr/27/shell-lobbied-to-undermine-eu-renewables-targets-documents-reveal, last accessed June 18, 2020.

49.

EEA, “Overview of Electricity Production and Use in Europe,” December 18, 2018, available at: https://www.eea.europa.eu/data-and-maps/indicators/overview-of-the-electricity-production-2/assessment-4, last accessed June 18, 2020.

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## Author notes

*

We are grateful to the editors of Global Environmental Politics and the three anonymous reviewers for their very constructive comments and suggestions on an earlier version of this article. We also thank Mari Lie Larsen for excellent research assistance.

This is an open-access article distributed under the terms of the Creative Commons Attribution 4.0 International License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. For a full description of the license, please visit https://creativecommons.org/licenses/by/4.0/legalcode.