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Shell threatens to leave US trade groups over climate disagreements

Shell threatens to leave US trade groups over climate disagreements

Shell admits its oil production is now on the decline

The Netherlands-based oil major took aim at the American Petroleum Institute, the Texas Oil & Gas Association and the U.S. Chamber of Commerce, pushing them to support and advocate for climate policies in line with the Paris climate agreement. The 2015 agreement aims to limit the rise in the average global temperature to 1.5 degrees Celsius above pre-industrial levels.

Shell’s move reassessing its trade group memberships comes as the European oil giant moves from its longtime fossil fuels business to meet its goal of achieving net-zero emissions by 2050.

“We must be confident that our participation in industry associations is consistent with our views on climate action,” Van Beurden said. “Our memberships should strengthen and not undermine our support of the goal of the Paris Agreement and the global drive to achieve net-zero emissions.”

API and the U.S. oil and gas industry face mounting pressure from their European members, which have moved aggressively over the past year to address climate change. Shell, Total and BP are investing heavily in wind and solar power, as well as electric vehicle charging stations, to prepare for a low-carbon future. Their largest American counterparts, Chevron and Exxon Mobil, have been slower to adopt renewables, instead working to reduce carbon emissions from their oil and gas operations through investments in carbon capture and storage technology.

Shell said API, the largest U.S. oil and gas trade association, has not stated publicly that it supports net-zero emissions, even though its chief executive said in January that the group supports the ambitions of the Paris Agreement. The company urged API to explicitly support the goals of the Paris Agreement, carbon pricing and direct regulation of methane emissions, a powerful greenhouse gas.

“Shell continues to urge API to take a more proactive and constructive approach to climate-related policy and advocacy, in line with the goal of the Paris Agreement,” the company said.

API spokeswoman Bethany Aronhalt said that the oil and gas industry is tackling climate change by working to reduce emissions while at the same time incentivizing lower-carbon innovations.

“The scope of this challenge is big enough for a variety of solutions, and every company has a unique approach,” Aronhalt said in an email. “As an association representing 600 companies of varying sizes and segments of the industry, we know there is more that unites us than divides us, and each member brings an important voice to our advocacy efforts. We look forward to continuing to partner with Shell to advance innovative solutions for a lower carbon future and ensure API is at the forefront of the debate over how to address climate change while maintaining access to affordable, reliable energy around the world.”

Pressure is mounting on API and other oil and gas trade groups to change their views on climate policies.

Total in January said it will leave API over “certain divergences” in approaches climate change. The French oil major, which has a significant presence in Houston, said it disagreed with API’s opposition to electric vehicle subsidies and its endorsement of political candidates who argued against U.S. participation in the Paris climate agreement.

Total is developing 16 solar farms in the U.S., including nine in Texas, to achieve its net-zero greenhouse gas emissions goals and to generate 40 percent of its sales from renewable power by 2050.

BP, which also has ambitions to achieve net-zero emissions by 2050, said in January that it is monitoring its membership in trade associations, particularly those it views as being only “partially aligned” with the company on climate-related issues. The company, however, said it remains committed to trying to influence those associations from within and will give an update on its memberships by the middle of this year.

Shell said it sees many benefits of its memberships in the trade associations, and believes that it is more effective working on climate change policies as a member of an association rather than on the outside. But it warned that in cases where it finds “material misalignment” with an association, it will not hesitate to reassess its membership. Shell in 2019 left the American Fuel & Petrochemical Manufacturers association after it found substantial disagreements with the group over climate policies.

“When we see little possibility of change, we are prepared to walk away,” Van Beurden said.

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