French oil giant Total exits American Petroleum Institute over climate change

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French oil giant Total exits American Petroleum Institute over climate change

9:19 CAT | 16 Jan 2021

Picture: AFP

Total has become the first oil major to quit the influential American Petroleum Institute (API) due to a clash on climate change policy, a sign of the pressure the US lobby group is likely to come under as Washington is about to again embrace the Paris climate agreement.

The move by Total is likely to increase pressure on BP and Royal Dutch Shell to follow suit unless the API changes its views. Both European majors said in 2020 they planned to remain members despite highlighting some disagreements with the group, and quitting others.

The API is a staple in the corridors of power in Washington, spending heavily to wield considerable influence on how Congress and the White House regulate the energy industry. Though it has softened its views in recent years, including supporting the Paris deal, the API has traditionally lobbied against oil and gas regulation, and subsidies for electric vehicles (EVs).

“We thank Total for their membership in this critical forum for our industry,” API said in a statement. “Our industry’s focus continues to be on taking meaningful action and shaping policy at all levels of government to reduce US emissions and ensure access to affordable and reliable energy.”

Total, in particular, criticised the API for supporting candidates in the last US elections who backed leaving the Paris agreement, according to a statement on Friday. US president-elect Joe Biden has said he plans to rejoin the accord immediately after taking office.

‘Urgent need’

“We welcome this decision by Total, which addresses a misalignment of interests and raises serious questions for other remaining members of the API,” said Clare Richards, senior engagement manager at the Church of England Pensions Board. “There is an urgent need for legislation that enables timely delivery of the goals of the Paris agreement.”

The French company also cited persistent divergence with the API, including its support for the rollback of US regulation on methane emissions. It also mentioned the lobby’s opposition to subsidies for EVs, and “differing positions” on the principle of carbon pricing.

In 2020, Total adopted a plan to eliminate most of its carbon emissions by 2050. It has invested billions of dollars on clean energy and batteries as it diverges from its oil and gas operations.

“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 a member adopt positions and messages that are aligned with those of the group in the fight against climate change,” CEO Patrick Pouyanné said in Friday’s statement.

Total’s move comes just two days after the API outlined its regulatory priorities at its annual “State of American Energy” event and as it struggles to adapt to the changing political landscape in Washington.

Mike Sommers, the group’s president, said on Wednesday that the organisation is open to working with Biden on some issues, including on methane regulation, but it is bracing for fights over EVs, pipelines and oil development on federal land.

Norway’s biggest pension fund said Total’s decision to leave would put pressure on other oil companies to take similar action.

“There is simply no justification for any association with lobby groups who roll back emissions regulations and undermine urgent climate action,” said Jeanett Bergan, head of responsible investment at KLP.

Source: Bloomberg