LONDON (Reuters) – Total SE France became the first major global energy company to leave the main U.S. oil and gas lobby on Friday due to disagreements over its climate policies and support to facilitate drilling regulations.
Total said it would not renew its membership in 2021 at the American Petroleum Institute (API) after a review of the lobby’s climate positions, which it described were only “partially aligned” with its own.
The most prominent exit from the most powerful energy lobby is ahead of radical changes in political leadership in the United States, with incoming President Joe Biden promising to tackle climate change and bring the country to net emissions by 2050.
“As part of our climate ambition made public in May 2020, we are committed to ensuring, in a transparent manner, that the industry associations of which we are members adopt positions and messages aligned with those of the group in the fight against climate change ”Said Patrick Pouyanné, full executive chairman.
The withdrawal highlights the growing rift between major European energy companies, which over the past year have accelerated plans to reduce emissions and build large renewable energy companies and their US rivals Exxon Mobil Corp and Chevron Corp , which have largely resisted growing pressure from investors to diversify.
Chevron has no plans to abandon the API, company spokesman Sean Comey said. Exxon was not immediately available for comment.
The announcement pressures European rivals Total, BP and Royal Dutch Shell to do the same after resisting in recent years.
BP, Shell and Norway Equinor said on Friday they are reviewing members of trade organizations and how they align themselves on climate-related issues. Shell spokesman Curtis Moore said “the API is approaching Shell’s stated views” on climate change.
European oil companies have in the past pointed to the role of the API in formulating industry safety and operation rules as a reason to stay in the group.
However, in the reasons why he left the group, Total cited the support of the API for the recovery of US regulations on methane emissions last year, his differing views on the pricing of the carbon, as well as the lack of support for subsidies for electric vehicles.
The API thanked Total for its affiliation, but noted that it does not support energy subsidies, saying it distorts markets.
“We believe the world’s energy and environmental challenges are large enough that many different approaches are needed to solve them and that we benefit from a diversity of views,” the API said.
The group has defended its track record of addressing carbon emissions, noting that technological advances in the industry have helped it reduce rates of carbon dioxide and methane emissions in large oil-producing regions. .
Last year’s total announced plans to reduce its carbon emissions, with the aim of reaching zero net emissions from its operations and its energy products sold to customers in Europe by 2050 or earlier.
Total’s operations in the United States include several offshore oil and gas fields in the Gulf of Mexico, a major refining and petrochemical plant in Port Arthur, Texas, as well as renewable energy companies. The company produced about 343,000 barrels of oil equivalent per day in the third quarter in the Americas.
SIGNIFICANT MOVEMENT
Growing investor pressure has prompted major European energy companies to outline plans to curb emissions and increase renewable energy production.
“There is simply no justification for any association with lobbyists to back down emissions regulations and undermine urgent climate action,” said Jeanett Bergan, head of investment at KLP, the largest pension fund in the world. Norway, which manages $ 80 billion in assets.
Total, BP and Shell have already left the U.S. fuel and petrochemical (AFPM) manufacturers, a U.S. oil refining group, also due to differences over climate policies.
The withdrawal of the API was more significant, said Andrew Logan, director of oil and gas programs and clean energy investment group CERES, that the announcement was significant and would put pressure on other European oil companies.
“Given the size and influence of the API, this is a much more significant move than previous decisions to withdraw from more niche trading groups like AFPM. I think we will see other companies follow suit.” said Logan.
Reports by Ron Bousso, Matthew Green and Shadia Nasralla in London, Nerijus Adomaitis in Oslo, Valerie Volcovici in Washington and Jennifer Hiller in Houston; edition by Jan Harvey, Jason Neely, Jane Merriman, Marguerita Choy and Louise Heavens