LONDON (Reuters) – France’s Total on Friday became the first major global energy company to leave the main US oil and gas lobby due to disagreements over its climate policies and support for easing drilling regulations.
Total said it will not renew its 2021 membership in the American Petroleum Institute (API) following a review of the lobby’s climate positions, describing them as only “partially aligned” with those of Total.
His retirement from API, the most powerful US oil and gas lobby, anticipates radical changes in political direction in the US, with incoming President Joe Biden vowing to tackle climate change and bring the country to net zero emissions by 2050 .
It puts pressure on European rivals Total, BP and Royal Dutch Shell to follow suit after resisting the move over the past year.
It also highlights a growing rift between major European energy companies that have accelerated plans to cut emissions and build large renewable energy companies over the past year and their US rivals Exxon Mobil and Chevron that have largely withstood growing investor pressure to diversify.
Total said it was pulling out from API due to the industry group’s support for last year’s rollback of US regulation on methane emissions, a potent greenhouse gas, due to its divergent views on how to price carbon, seen as key to reducing emissions, as well as its lack of support for subsidies for electric vehicles.
“As part of our climate ambition made public in May 2020, we are committed to ensuring, in a transparent way, that the sector associations we are members of adopt positions and messages aligned with those of the Group in the fight against climate change,” he said. Patrick Pouyanné, CEO of Total.
The API is recognized for industry security standards and practices that are considered the global standard. In the past, European oil companies have indicated their role in formulating industry standards as a motivation for staying in the group.
The industry group thanked Total for its membership, but noted that it does not support energy subsidies, saying it distorts markets.
“We believe that the world’s energy and environmental challenges are big enough to require many different approaches to solve them, and we take advantage of them. from a variety of points of view, ”the API said.
The group defended its record in tackling carbon emissions, noting that technological advances in the industry have helped reduce the rates of carbon dioxide and methane emissions in large oil-producing regions.
Total last year announced plans to reduce its carbon emissions, with the goal of achieving net zero emissions from its operations and energy products sold to customers in Europe by 2050 or earlier.
Investors said Total’s move could force the hand of other European majors like BP and Shell.
“There is simply no justification for any association with lobbyists overriding emissions regulations and undermining urgent climate action,” said Jeanett Bergan, responsible investment manager at KLP, Norway’s largest pension fund. , which manages $ 80 billion in assets.
Total’s US operations include a number of 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 operations. The company produced approximately 343,000 barrels of oil equivalent per day in the third quarter in the Americas.
Leading European energy companies have outlined plans to reduce emissions and increase renewable energy production after years of increasing investor pressure.
Total, BP and Shell have already withdrawn from American Fuel & Petrochemical Manufacturers (AFPM), a US oil refining group, also due to differences in climate policies.
Until Friday, those companies had chosen to remain in the API. BP and Shell were not immediately available for comment on Friday.
Norway’s Equinor said in a statement that he remained a member of the API last year despite some differences in climate policies. It is currently reviewing its registrations, the company said.
Andrew Logan, director of oil and gas programs and clean energy investor group CERES, said the announcement is significant and will put pressure on other European oil majors.
“Given the size and influence of the API, this is a much more significant move than previous decisions to withdraw from niche trading groups like AFPM. I think we will see other companies follow suit,” Logan said.
Reportage by Ron Bousso, Matthew Green and Shadia Nasralla in London, Nerijus Adomaitis in Oslo and Valerie Volcovici in Washington; editing by Jan Harvey, Jason Neely, Jane Merriman, Marguerita Choy and Louise Heavens