The dilemma of quitting oil

Activists are pushing big oil companies to leave their most unsustainable platforms and instead move towards greener energy sources. The assets they are abandoning are left in incapable hands which does not help the bigger picture. Many large oil firms now are struggling with the choice of abandoning oil or responsibly caring for their most pollutive properties.

Oil companies’ part in a sustainable future

In order to stop climate change, big oil companies need to leave their business of drilling for oil. This however creates a new social corporate responsibility dilemma.

Oil and gas firms unquestionably have an impact on the reliable energy supply required to maintain a high standard of living and drive the global economy. However, big oil and gas companies must have a plan on how they can help and provide progress towards the 2050 net zero goal. International players like Equinor should recognize their responsibilities for the existing oil assets, which are making a significant contribution to the global emissions. Transferring ownership of these assets to other operators won’t actually solve any global issues; instead, it will simply throw a number of environmental problems under the rug.

Are we asking them to do the wrong thing? 

To offer clean and more efficient energy in all nations with an eye toward sustainable and responsible growth, this requires updating current infrastructure and outdated technologies. For Equinor these are for instance wind farms, CCS, solar power, and wave energy, which produce electricity very efficiently and have considerably less environmental impact. This is of course an important action being made.

However, forcing oil companies to remove, or exit from old fields in less developed and less regulated regions, will not help the companies maintain their social corporate responsibility, globally. 

Exiting or simply relocating?

The oil and gas fields that the companies are now abandoning are facilities with numerous aging, integrity, and outdated technology issues but still offer economical value. By getting rid of assets, the international oil companies are leaving these in the hands of less responsible and equipped owners who for many years will continue the production in a more emissive and less responsible way. How is this contributing to decreasing global oil and gas emissions?

These large oil firms will not meet their obligations if the assets are transferred to a less capable company or, in some situations, the oil companies of developing nations with higher barriers to act upon the global responsibility. 

The need for fossil fuel sources of energy remains strong in all outlooks, particularly in developing nations. Adapting the transformation policies in context of the international energy transition targets is a time-consuming and resourceful process with plenty of work needed to upgrade the existing infrastructures. Therefore, simply ignoring the already-existing solutions will not help reach the goals set by 2050 net zero. 

One solution, which is being pushed by global authorities, is assisting a fair and just transition to developing countries, by providing the knowledge, sustainable finance, and skillset to walk shoulder to shoulder with the rest of the world in a journey on a greener shift. 

From Black Gold to Green Energy

If oil firms believe that the disposal of polluting assets is necessary for them to appear more sustainable, then this action needs to take place with stricter oversight and on the basis of an environmentally responsible strategy for removal.

To maintain their current social corporate responsibility, the new owners must be able, willing, obligated by, and competent to achieve emissions and safety standards, as per Accelerated Net Zero targets. A collaboration between the existing global corporations within the oil and gas industry could help in developing such a framework. 

Take a stand

To reach net zero, the world as we know it has to change. Big oil and gas companies need to do their part by taking a stand on the dilemma they are facing: merely appearing sustainable or taking actual responsibility.

References:

Affordable and clean energy. (2022). UNDP. 

Equinor presents its first Energy transition plan. (2022, April 19).

Investing with climate in mind. (n.d.). BlackRock.