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<\/p>\nRoyal Dutch Shell vowed last September to reach net-zero carbon pollution in its business by 2050. The goal was vague but notable, and seemed to become more realistic when the corporation\u00a0announced earlier this month that its crude oil production had peaked in 2019 and would likely never increase again.\u00a0<\/p>\n
Yet while Shell abandons the outright climate obstructionism it once espoused, the oil giant has continued to fund a network of lobbying groups that fight policies to curb planet-heating emissions and rein in new drilling.\u00a0<\/p>\n
That includes a group that lobbied in favor of a controversial federal rule on fossil fuel financing that the Trump administration introduced in its final days, according to documents reviewed by the investigative journalism outfit SourceMaterial and HuffPost.<\/p>\n
The rule, finalized during President Donald Trump\u2019s last week in office, would require banks to be \u201cobjective\u201d and \u201cimpartial\u201d in choosing which companies they finance. The proposal was widely seen as a bid to undercut policies that major banks have instituted to end lending to companies drilling for oil in the Arctic or mining coal.<\/p>\n
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President Joe Biden halted the rule, along with all other Trump-era regulations that had not yet been published in the Federal Register, with an executive order on his first day in office. Its future now depends on whomever the new president appoints to run the Office of the Comptroller of the Currency.<\/p>\n
Comments on the rule submitted to the OCC show that the Independent Petroleum Association of America, of which Shell is a member, lobbied for the rule.<\/p>\n
In its December comments, the IPAA claimed that banks have caved to \u201cpolitical pressure to limit capital to an essential energy industry.\u201d\u00a0The group argued that environmental groups have \u201cdistorted\u201d the damage to the environment caused by methane emissions, \u201ctrying to suggest it poses an unreasonable threat.\u201d\u00a0<\/p>\n
Shell calls methane \u201ca potent greenhouse gas\u201d on its website, adding: \u201cWhen it is released into the atmosphere it has a much higher global warming impact than CO2.\u201d<\/p>\n
A spokesperson for Shell said the company does not have a position on the bank financing rule and did not \u201cdirectly consult with IPAA on its correspondence to the comptroller.\u201d\u00a0<\/p>\n
Asked about the clash between Shell\u2019s public statements on methane and the IPAA\u2019s downplaying of the threat, the spokesperson said the company has \u201cno expectations [trade associations] will be monolithic in their platforms or advocacy approach,\u201d but insisted that Shell expresses its position on methane within trade associations to which it belongs.<\/p>\n
But Graham Steele, director of the Stanford Graduate School of Business, said the IPAA\u2019s comments were evidence of an \u201cobvious disconnect between fossil fuel companies\u2019 actions and their words.\u201d\u00a0<\/p>\n
He added, \u201cThat\u2019s why these trade associations and these coalitions exist, is to be the sort of back-channel voice for all these entities.\u201d\u00a0<\/p>\n
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Since 2019, Shell has published an annual review of trade groups in which it\u2019s a member. In the\u00a0most recent report, it claimed, \u201cWe have continued to work to ensure our memberships of industry associations support the Paris Agreement\u201d (the climate change treaty that Trump pulled the U.S. out of and that Biden quickly reentered).<\/p>\n
But Shell\u2019s April 2020 review was limited to 18 groups, not including the IPAA.\u00a0The company said in September\u00a0that it would assess more in its next review.\u00a0<\/p>\n
While the IPAA does not publish a list of its members,\u00a0a partial list\u00a0obtained by the nonprofit Western Values Project in 2018 shows that Shell and other major U.S. oil and gas companies \u2015 including Chesapeake Energy, QEP Resources, Ovintiv and SM Energy \u2015 are all members.<\/p>\n
Shell\u2019s continued membership in groups that lobby against climate action has drawn criticism. Earlier this month, the British think tank InfluenceMap, which tracks corporate lobbying on climate policy, said the company\u2019s funding for groups such as the American Petroleum Institute, the United States\u2019 largest oil and gas lobby, was \u201cat odds with the stated ambitions of Shell.\u201d<\/p>\n
\u201cIf Shell is serious about its climate change commitments, it should consider why its competitor Total withdrew from the American Petroleum Institute,\u201d Edward Collins, director of corporate climate lobbying at InfluenceMap, said in a Feb. 12 statement. \u201cUntil this misalignment is addressed, there will continue to be pressure on Shell over its climate lobbying links.\u201d<\/p>\n
The bank financing rule has also proved extremely controversial, with major banks, consumer groups, environmentalists and Democratic lawmakers uniting against it.<\/p>\n
\u201cWhen you see proposals that have condemnation among a number of stakeholders that don\u2019t usually get along, that says something about the proposal,\u201d said John Geiringer, a former bank regulator who is now a partner at the Chicago-based law firm Barack Ferrazzano.\u00a0<\/p>\n
He added that the rule \u201ccame as a bit of a surprise\u201d because it took regulations intended to ensure that people with low incomes get access to banking services and applied them to \u201ccontroversial industries.\u201d<\/p>\n
Also lobbying in favor of the rule was a conservative think tank called the Pacific Research Institute. According to publicly available tax records, the PRI\u2019s donors include Koch Industries and Exxon Mobil Corp.<\/p>\n
Its comments to the OCC criticized the application of environmental, social and governance (ESG) requirements to banks\u2019 activities. The PRI suggested that \u201cESG activists\u201d were forcing banks to follow \u201cthe political trends of the day.\u201d<\/p>\n
But Steele said that\u2019s not why banks are pulling back from funding the fossil fuel industry.<\/p>\n
\u201cFundamentally, the banks are doing this because the economics just don\u2019t make sense,\u201d Steele said. \u201cFrankly, the industry\u2019s response, and the fact the OCC even did this rule, is a testament to what a powerful role the banking industry plays in supporting and propping up the fossil fuel industry and climate change.\u201d\u00a0<\/p>\n
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