Oil and gas firms backpedaling on climate goals, report finds

by Saul Elbein - 07/18/24 12:51 PM ET

Giles Clarke, Getty Images
“Cancer Alley” is one of the most polluted areas of the United States and lies along the once pristine Mississippi River that stretches some 80 miles from New Orleans to Baton Rouge, where a dense concentration of oil refineries, petrochemical plants, and other chemical industries reside alongside suburban homes.

Many energy companies are pulling back on their ambition to move away from fossil fuels, a new report has found.

More than three-quarters of pipeline and refining companies still boast an energy transition strategy — a plan to move away from the planet-warming fuels, according to Reuters’s Energy Transition Insights Report 2024.

But the number of firms with such plans has fallen sharply since 2023, when more than 90 percent of respondents from pipeline and refining companies listed energy transition targets.

Reuters researchers found that this pivot — which brings those sectors of oil and gas into line with the worldwide energy sector’s stance on the energy transition — coincided with a broad “slide in ambition” from global firms.

Between 2023 and 2024, the number of respondents who expected their firms to meet their transition goals by 2030 fell from 75 percent to 61 percent.

Over the same period, the number that expected their firm’s transition to take until 2050 nearly doubled, from 17 percent in 2023 to 31 percent in 2024.

That shift, Reuters noted, occurred alongside another one: a decoupling of clean energy and fossil fuel firms from each other.

This year’s survey showed a 46 percent rise in the total number of energy firms that drew little to no clean energy — and a 40 percent increase in those for which renewables composed a majority of their energy consumption.

This shift may indicate a split between the two sectors, with fewer organizations falling into the “middle ground” of mixed renewables and fossil fuel usage.

That decline comes alongside a wider near-term retreat in spending on clean energy, Reuters found — as inflation drives all kinds of firms to spend more on making existing investments more efficient, rather than making new ones.

But over the longer term, the survey suggests that green investment is still growing. This year, nearly a third of respondents predicted that their firms would increase renewables spending by 40 percent in the next three years — a fourfold increase over last year.