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Monday, June 24, 2024

Equinor caught in new carbon conflict

They got rid of “state” and “oil” in their corporate name, and even sold off their retail gasoline (petrol) stations to Circle K of Canada. Executives of the former Statoil, now Equinor, however, can’t shake off ongoing conflicts over the carbon emissions its business generates, despite stricter goals for its own oil and gas production.

Equinor’s CEO Eldar Sætre claims that Equinor can’t be held responsible for all the carbon emissions generated by the oil and gas his company produces. The sale of the company’s old Statoil gas/petrol stations can help him make such a claim, but critics say both his, the company’s and Norwegian politicians’ credibility is weak. PHOTO: Equinor/Ole Jørgen Bratland

The conflict now is how Equinor won’t take responsibility for all the carbon emissions generated when its oil and gas products are consumed. Selling off its large chain of Statoil gasoline/petrol stations to Circle K also clearly helped disassociate the new “Equinor” from closer, more highly public ties to how consumers “burn” or use their products.

Newspaper Dagens Næringsliv (DN) reported recently how Equinor has made two announcements that seem to contradict one another. In one, Equinor announced how it will strive to reach climate goals set in the UN’s Paris Agreement, “stress-testing” all its investments against the goal of limiting climate change to well under 2 degrees. Equinor and Norwegian government officials frequently boast that the country already produces oil and gas in among the world’s most climate-friendly manner.

In the other announcement, reported DN, Equinor’s board rejected several climate-related proposals from shareholders. One of them proposed also setting goals for emissions tied to consumption of Equinor’s oil and gas, similar to what oil giant Shell is doing. It’s actual consumption that generates most carbon emissions.

Cutting emissions on production doesn’t help much
Equinor acknowledges that itself in its own sustainability report, writing that fully 90 percent of total carbon emissions of oil and gas result from usage, not production. Equinor’s CEO Eldar Sætre nonetheless believes it would ne “unnatural” for the company to concentrate on end-users’ emissions.

“We talk a lot about the need for changes in consumption and demand,” Sætre hasd noted, “but we don’t sell the product to the end users and aren’t in direct contact with them. We have an impact indirectly through how we engage outselves in decarbonization, carbon capture and storage, hydrogen, and we have said we also will consider how we can engage us further in this … but our business model doesn’t directly take us into ‘scope three’ as it stands today.”

The sale of the Statoil stations, on which the mostly state-owned Equinor earned a solid profit, conveniently helps justify Sætre’s view. Climate experts and advocates don’t seem impressed. Norway’s chapter of Friends of the Earth (Naturvernforbundet) complains that the credibility of Equinor’s climate goals and participation in initiatives like “Climate Action 100+” is “considerably weakened” when its board recommends that shareholders (67 percent of which are held by the Norwegian state that traditionally supports management) vote against a resolution to also include customers’ carbon emissions from the oil and gas Equinor produces. It’s still, after all, selling petrol, just not directly to those using it to drive cars, for example.

Under pressure
Equinor is, however, feeling more pressure from investors over how it reports its so-called “climate risk.” While Equinor also has been promoting its investment in renewable energy, it still only accounts for around 5 percent of total revenues.

Norwegian government officials, ever bullish on the country’s oil industry, continue to promote Equinor’s stricter climate goals, and contribute to making Norway’s biggest company appear as green as possible. They insist they’re not “greenwashing” the country’s oil industry because of all the jobs it provides and money it pumps into the state treasury.

“The state has clear expectations that companies in which the state is an investor will actively show how they’re on the front line in terms of cosideratin for the climate and environment,” claims Oil & Energy Minister Kjell-Børge Freiberg of the Progress Party. He’s every bit as supportive of Norway’s oil and gas industry and of Equinor, as his predecessors, at a time when it’s come under international criticism not only over its controversial exploration project in the Great Australian Bight but also over its ongoing expansion in the Arctic. Norway’s own carbon emissions have also risen, not declined.

DN noted how Equinor’s own former chief economist Klaus Mohn, now a professor in Norway, has claimed that Norwegian oil companies’ own cuts in carbon emissions won’t mean much. Only production cuts and lower oil prices will bring down emissions significantly.

“It’s consumption that’s the problem,” oil service veteran Ståle Kyklingstad told DN. “Cutting emissions on production will only contribute marginal improvements for the environment.” While Freiberg’s ministry keeps openng up new areas of the Arctic and doling out exploration licenses, just like Australia has done in the Bight. Berglund



For more news on Arctic developments.



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