42 TIME May 23/May 30, 2022
about the industry’s decades of climate
denial to make a moral case. Meanwhile,
college students pushed their universi-
ties to divest from fossil fuels, winning
some victories while pushing public
perception to grow more antagonistic
toward oil and gas.
These efforts made it harder to re-
cruit talent into the industry and left
companies increasingly vulnerable to
regulation. Still, nothing challenged
the industry’s attitude toward climate
as much as the change in tone from
investors. By 2020, according to the
Forum for Sustainable and Responsi-
ble Investment, some $17 trillion in in-
vestment had flowed into so-called ESG
investments—short for environmental,
social, and governance—and executives
felt the pressure to offer a positive nar-
rative about how their companies were
approaching climate. “In the world of
money, everyone lives on bended knee,”
Brian Thomas, a managing director at
Prudential Private Capital, said at an
industry conference in March. “The
industry is beginning to kind of morph
its behavior to reflect the concerns of its
investor base, right or wrong.”
Regardless of climate concerns, in-
vestors across the board fretted about
the dismal financial performance of
oil and gas—the industry was failing
to make money and needed to be dis-
rupted. “The basic model is in pieces,
it’s fallen apart,” Tom Sanzillo, director
of finance at the Institute for Energy
Economics and Financial Analysis,
told me at the time. “This is an indus-
try in last place.”
Fossil-fuel companies embarked on
efforts to change; the approach varied
by company and region, but by and large
they were piecemeal and insufficient.
At an October 2021 hearing, mem-
bers of the House Oversight Commit-
tee asked executives from some of the
world’s largest oil and gas firms about
their plans to address climate change.
ExxonMobil CEO Woods cited the com-
pany’s investment in natural gas as an
emission- reducing tool. The CEO of
Chevron said his company would try to
emit less carbon in its operations.
In short, the scale of the industry’s
changes doesn’t match the science.
Mike Sommers, the head of the Amer-
ican Petroleum Institute, summed
it up in a January 2022 address. While
offering an unequivocal declaration that
his industry needs to address climate
change, he made clear that the industry
would not shrink voluntarily. “We reject
efforts to scale back domestic produc-
tion,” he said. “This is about addition,
not subtraction.”FOR A BRIEF MOMENT, the Russian
invasion of Ukraine seemed to offer an
opportunity for the energy industry to
change course. Following the initial
attacks, proponents of clean energyflush with no-strings-attached cash
that could have been used to finance
a true pivot toward green initiatives.
But so far, companies have mostly
used the money to pay enormous div-
idends to shareholders and buy back
stock, thereby inflating the stock price.
ExxonMobil made $5.5 billion in the
first quarter of 2022; it plans to spend
$30 billion buying back stock by 2023.
Chevron made more than $6 billion;
it said it would buy back $10 billion
by the end of the year. Shell made
$9.1 billion; it plans to repurchase
$8.5 billion in shares in the first half of
the year alone.
The dynamic has led advocates, ac-
tivists, and politicians to rethink their
messaging. As consumers pay more
for energy, criticizing the industry for
its climate failures may not have the
same resonance it once did. A recent
CBS News poll found that although
the majority of Americans remain con-
cerned about climate change, the issue
has fallen on the list of priorities. Gas
prices, on the other hand, seem destined
for center stage as the U.S. approaches
congressional midterm elections.
And so the advocates have turned
their attention to the enormous profit
companies are making. The compa-
nies, these advocates say, should cut
the price of their product—or else face
a windfall- profit tax that would take
that money and return it to American
taxpayers. “We need an offensive nar-
rative: we’re just saying, ‘Blame Putin,’
and they’re saying, ‘Blame Biden,’” says
Ro Khanna, a Democratic Representa-
tive from California who is chair of the
House Oversight Subcommittee on the
Environment. “That’s not enough. We
need to be saying, ‘Blame Big Oil.’ ”
On the surface, the pivot to talking
about the industry’s profit margin may
seem like an unfortunate turn away from
the urgent reality of pushing these com-
panies to slow fossil-fuel production.
But it cuts to the core of the challenge
the oil and gas industry poses to ad-
dressing climate change. Profits drove
the industry’s climate denial from the
beginning; profits are driving invest-
ment decisions today. When oil is truly
no longer a good investment, its reign
will come to an end. —With reporting
by MARIAH ESPADA CLIMATE
‘IN THE WORLD
OF MONEY,
EVERYONE LIVES
ON BENDED
KNEE.’
—BRIAN THOMAS, MANAGING DIRECTOR,
PRUDENTIAL PRIVATE CAPITALsuggested that the moment created
a unique chance for policymakers to
nudge the economy off fossil fuels.
After all, oil and gas paid for Vladi-
mir Putin’s war efforts and left peo-
ple around the world vulnerable to
the economic consequences of higher
fuel prices. The European Commis-
sion, the E.U.’s executive body, quickly
produced a plan to wean the bloc off
Russian gas with a dramatic proposal
to ramp up the development of clean-
energy infrastructure. But on the other
side of the Atlantic, the policy picture
has been less promising. Republicans
opposed to climate legislation have
used the spike in oil prices to blame
the Biden Administration’s climate ini-
tiatives for hurting consumers. And
the Administration has softened its
climate messaging, tempering it with
calls for greater oil and gas production
in the short term.
Still, even without government pol-
icy to serve as a nudge, the oil and gas
industry could have used the moment
to embrace a different course. As prices
rose, companies found themselves