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saudi aramco
Saudi Aramco Leads Fossil Fuel Firms in 'Sportswashing' Sponsorships: Analysis
"Oil companies who are delaying climate action and pouring more fuel on the fire of global heating are using Big Tobacco's old playbook and trying to pass themselves off as patrons of sport."
Sep 18, 2024
Aramco, the state-owned Saudi firm, has the most sports sponsorships of any fossil fuel company in the world, with $1.3 billion in active deals, followed by Ineos, TotalEnergies, and Shell, according to a Wednesday report that compares the industry's methods to those once used by Big Tobacco.
The 23-page report, Dirty Money: How Fossil Fuel Sponsors Are Polluting Sport, details one of the ways in which countries and corporations "sportswash" their reputations: sponsorships of popular athletes, teams, events, or leagues. Other means of sportswashing, such as Saudi Arabia's development of a new golf tour and purchase of major soccer clubs, aren't included in the analysis, which was produced by the New Weather Institute (NWI), a climate think tank.
Aramco, which is about 98% owned by the Saudi Arabian government, is the most profitable company in the world and is responsible for over 4% of global carbon emissions since 1965, the most of any firm. It pays out more than $300 million per year in sports sponsorships in motorsports, soccer, golf, and cricket, with active deals worth about $1.3 billion over their lifespans, the report says.
Overall, the report authors found 205 sponsorship deals by the fossil fuel industry worth a total of $5.6 billion.
" Oil companies who are delaying climate action and pouring more fuel on the fire of global heating are using Big Tobacco's old playbook and trying to pass themselves off as patrons of sport," Andrew Simms, NWI's co-director, said in a statement.
The report emphasizes the negative impact fossil fuel companies have not just on the climate but also, more immediately, on public health—and the ability to play sports—citing research that shows the burning of their products leads to millions of excess deaths per year.
"Air pollution from fossil fuels and the extreme weather of a warming world threaten the very future of athletes, fans, and events ranging from the Winter Olympics to World Cups," Simms said. "If sport is to have a future it needs to clean itself of dirty money from big polluters and stop promoting its own destruction."
The dirty money polluting sport - our new report on how oil and gas companies are exploiting sport even as they destroy the climate conditions for it 👇👇👇 https://t.co/d4AItJnglv
— Andrew Simms (@AndrewSimms_uk) September 18, 2024
The term sportswashing, related to whitewashing and greenwashing, has gained use in the last decade as a way of describing efforts to distract attention from wrongdoing through affiliation with popular sports. Critics often levy the charge at Saudi Arabia and other Gulf states.
Saudi Arabia's sovereign wealth fund, which draws financing from Aramco, has reportedly spent more than $2 billion on its LIV Golf tour in the last three years. Saudi Arabia is expected host the World Cup in 2034, and neighboring Qatar did so in 2022, spending over $200 billion.
Saudi Arabia and Aramco have long been accused of greenwashing. Yet poor environmental credentials aren't their only public relations issue. The country, in addition to sourcing its wealth from planet-destroying fossil fuels, is led by an authoritarian regime that has a terrible human rights record, one under more scrutiny since the 2018 killing of Saudi journalist Jamal Khashoggi, who worked for The Washington Post.
In response to the sportswashing critique, Saudi leaders have been blunt and defiant.
"If sportswashing is going to increase my GDP by 1%, then we'll continue sportswashing," Crown Prince Mohammed bin Salman, the country's de facto leader, told Fox News last year.
In addition to Aramco, the NWI report focuses on three Western fossil fuel companies. Shell and Ineos, two U.K.-based multinationals, each spend more than $100 million per year on sponsorships in a wide variety of sports. TotalEnergies, a French multinational, spends more than $60 million.
The NWI report recommends that sports organizations institute tobacco-style bans on fossil fuel sponsorships and improve due diligence on donors and sponsors.
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The Next Few Years Will Decide What Kind of Future We Leave for My Grandchild
Everyone’s job this decade is to arrest the sudden and sickening lurch upward in temperature, so that there’s somewhere at least a little stable for young people to stand as they build that new world that must come.
Mar 31, 2024
Asa Caleb Crane was born over the weekend; he came into the world with a full head of hair, and on first impression an undeniable charisma, a full array of important moral virtues, and a calm but determined approach to the new world in which he found himself.
And I found myself both entirely agog at his general niftiness, and bowled over by the fact that I now know, very intimately, someone who God willing is going to exist in the 22nd century.
I can compass the passage of time; my grandmother, who I knew well, was born in the latter part of the 19th century, and I can imagine most of the changes of her life—feel in some visceral way the increase in mobility, in communication, in opportunity, in ease. My parents were born in the Depression and came of age in the great postwar boom; my daughter was born just as the internet was getting off the ground. It all makes more or less sense to me; but of course the future is harder, and the future now is harder than ever. In fact, there have been a spate of stories this week pointing out that even our greatest climate scientists are having a hard time explaining the rapid rise in global temperature over the last 12 months—and others explaining just how hot it has become. Here’s a compelling Guardian account of the record heat across much of Africa in recent weeks.
Tarly in Ivory Coast explained: “All I can do is open the windows and the door to let the air flow, but even the air doesn’t move.”
He lives with a one-year-old child, who cries at night because he is hot, and his two teenage daughters, who wake up in the middle of the night to shower before returning to bed where they lie in front of the fan. Still, the heat clings; it does not go away.
“At four in the morning, it’s when it’s least hot and you can sleep better, but I have to wake up to go to work,” Tarly said. “When it’s this hot, mixed with humidity, time stands still.”
Of course time in the larger sense, rushes on—and right now the very real-time acceleration of warming scares me more than I want to admit. It also makes me think—as you might guess from the title of this newsletter—that the next few years may be the crucial ones between now and 2100, maybe even between now and 5100. Because if we don’t break the momentum of the warming then it will build unstoppably on itself—and that will foreclose all kinds of options.
It’s keeping those options open that matters to me. I don’t think we can reasonably plan all that far into the future—new technologies, new politics, new attitudes will inevitably shape how things happen 20 or 60 years from now. But I do think we can see the outline of our politics through the end of the decade, and I think it basically involves a single choice: Do we go all-in on the energy transition as the world pledged in December at the last global climate talks, or do we back off, following the advice of, say, the (wildly applauded) Saudi Aramco CEO who said last week at a Houston energy conference that “we should abandon the fantasy of phasing out oil and gas and instead invest in them.”
The first option—going all-in on the energy transition—doesn’t get us where we need to go, and certainly not by 2030. I don’t see any chance that the temperature won’t still be rising then. But done with vigor it keeps possibilities open: Politico this week reported, for instance, on the growing competition among blue-state governors to come up with more renewables and more efficiency, and the remarkable Kingsmill Bond at the Rocky Mountain Institute reported on the growing competition between the superpower blocs for green energy supremacy.
China, Europe, and the United States make up 80%–90% of deployment of key clean technologies.
China dominates the supply chain, but change is happening. China has outspent the United States and Europe 10-fold in the past five years to achieve market share in manufacturing of over 90% in solar and 70% in batteries. But United States and European capital expenditure is set to increase 16-fold by 2025, and opportunities for leadership abound; only 20% of final energy demand has been electrified; and technologies to enhance flexibility are still in the early stages.
Europe leads in solar and wind share of generation. Europe has the largest share of electricity from solar and wind, and all three regions are moving rapidly up the S-curve towards solar and wind dominance.
What I’m trying to say is, we have the chance to move over the next five years to establish a counter-momentum to the rising temperature. If we do, by 2030 we’ll be in a place to weigh the options going forward; if we don’t then nature will be making decisions for us, and we’ll be reacting.
For those like me of a certain age we have no real business telling young people what kind of world to build—that will be their opportunity and their responsibility, and my sense is that they have the savvy to do a good job of it. But our job—everyone’s job these next five years—is to arrest the sudden and sickening lurch upward in temperature, so that there’s somewhere at least a little stable for those young people to stand as they build that new world that must come. The best proxy for that stability is the number of solar panels and wind turbines and batteries we install between now and the end of the decade.
I’ve always thought this to be true; it’s why this newsletter is called what it is, and it’s why I do the work I do at places like Third Act. It’s just that all of a sudden I take it even more personally. Hi Asa!
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The Climate Crisis Calls for Wisdom—Not Artificial Intelligence
There’s no way we can build out renewable energy fast enough to meet this kind of extra demand—it’s going to be at the bleeding edge of the technically and politically possible to power the things we already do.
Mar 23, 2024
We’re getting right to the nub now.
This week the World Meteorological Organization officially certified 2023 as the hottest year in human history. Just to put on the record here what should have been the lead story in every journal and website on our home planet:
Andrea Celeste Saulo, secretary general of the WMO, said the organisation was now “sounding the red alert to the world.”
The report found temperatures near the surface of the earth were 1.45°C higher last year than they were in the late 1800s, when people began to destroy nature at an industrial scale and burn large amounts of coal, oil, and gas.
Last year’s spike was so scary that NASA’s Gavin Schmidt—Jim Hansen’s heir as keeper of NASA’s climate record—wrote in Nature this week that it raised the most profound possible implications. Please read his words slowly and carefully:
It could imply that a warming planet is already fundamentally altering how the climate system operates, much sooner than scientists had anticipated. It could also mean that statistical inferences based on past events are less reliable than we thought, adding more uncertainty to seasonal predictions of droughts and rainfall patterns.
Much of the world’s climate is driven by intricate, long-distance links—known as teleconnections—fuelled by sea and atmospheric currents. If their behavior is in flux or markedly diverging from previous observations, we need to know about such changes in real time.
And now, with equal care, read the words of the biggest oil producer on earth, the CEO of Saudi Aramco, who was in Houston last week for the annual hydrocarbon festival known as CERAWeek.
We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately reflecting realistic demand assumptions.
That is to say, the powers that be want to abandon what the World Meteorological Organization, in their “red alert” report called the “one glimmer of hope”: that renewable energy installations rose 50% last year.
Understand that the battle is fully joined. The fossil fuel industry—as Exxon CEO Darren Woods helpfully explained—is in an all-out fight to derail anything green, because it won’t return “above average profits.” They have plenty of allies: Everyone noted former President Donald Trump threatening a “bloodbath” last week, but fewer noted the actual target of his wrath: electric vehicles. The Biden administration, after listening to the rhetoric at the Houston conference, backed EVs in a straightforward and earnest way today, announcing new rules that attempt to spur the rapid growth of a crucial climate-fighting technology. But of course that produced the requisite reaction: as The New York Times reported:
The American Fuel & Petrochemical Manufacturers, a lobbying organization, has started what it says is a “seven figure” campaign of advertising, phone calls, and text messages against what it falsely calls “Biden’s E.P.A. car ban” in the swing states Pennsylvania, Michigan, Wisconsin, Nevada, and Arizona, as well as in Ohio, Montana, and the Washington D.C. market.
So, like it or not, the climate crisis is going to be a key part of this election campaign. The November outcome may hinge on whether Americans can imagine making even this small change in the face of the gravest crisis our species has ever wandered into: replacing the gas tank in a car with a battery. That doesn’t seem like much to ask?
It won’t solve the climate crisis, of course—nothing will solve it. But accelerating momentum towards green energy is the likeliest card we have to play in a world where people seem unwilling to moderate their demands for mobility, and indeed for consumption of any kind.
One particularly depressing set of statistics about that ever-increasing demand for more emerged last week, as the energy implications of artificial intelligence started to become clearer. Here’s what Bloomberg reported on Wednesday:
John Ketchum, CEO of utility NextEra Energy Inc., told attendees that U.S. power demand, which has been relatively flat for years, is poised to increase by 81% over the next five years. Toby Rice, chief of the largest U.S. natural gas driller, EQT Corp., cited a prediction that AI will gobble up more power domestically than households by 2030.
As Elizabeth Kolbert explained in The New Yorker a few days ago, this “obscene” power demand comes because when you ask AI to, say, help you with your bracket for the NCAA tournament, it has to sort through all human knowledge ever. As even AI apostle Sam Altman explained at Davos this year
“I think we still don’t appreciate the energy needs of this technology.” He didn’t see how these needs could be met, he went on, “without a breakthrough.” He added, “We need fusion or we need, like, radically cheaper solar plus storage, or something, at massive scale—like, a scale that no one is really planning for.”
The truth is, there’s no way we can build out renewable energy fast enough to meet this kind of extra demand—it’s going to be at the bleeding edge of the technically and politically possible to power the things we already do, live drive cars and heat homes. And so, in a rational world, faced with an emergency, we would put off scaling AI for now. The irony, of course, is that’s it’s often been touted as a tool to help solve climate change. But we have the tools we need—plain old intelligence gave us cheap solar panels.
With the able technological assistance of my wife, I asked Anthropic’s AI bot Claude to comment. It was amazing how much he sounded like a PR man; after spinning a lot of jargon-filled guff about how “responsible AI can likely be part of the solution to environmental challenges,” he allowed as how he had no idea how much energy he was using. “In general, the electricity usage of large language models like myself is a relevant consideration from an environmental perspective, but quantifying the exact amount would require additional information I don’t have access to.”
Whatever. What we need is not more intelligence. We need more wisdom, to guide us through this pinch point in the human experiment. Including the wisdom to say no to some things, at least until the emergency subsides.
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When Will We Hold the Murderous Sociopathic Big Oil Executives to Account?
Today there are families all across the country who are mourning the loss of their loved ones to climate-change-fueled floods, heatstroke, and violent weather as much as I grieved my father’s death at the hands of the asbestos industry executives.
Mar 23, 2024
When my mom got pregnant with me in 1950, my dad, whose lifetime ambition had been to be a history professor, decided to abandon the GI Bill, drop out of college, and go to work in a steel plant in Grand Rapids, Michigan to financially prepare for their new arrival. It was hot, dirty work and the steel came out of the furnace over asbestos-covered rollers, leaving Dad working in a cloud of the stuff.
In 2006, Dad was diagnosed with mesothelioma, an insanely painful and ultimately 100% deadly disease. I tracked down a lawyer who did suits on behalf of asbestos victims, and he showed up to depose Dad on videotape along with more than a dozen asbestos industry lawyers, several of whom were quite verbally abusive to Dad. They barely fit into my parent’s small living room and left my father in tears.
After the lawyers’ fees, I think Mom ended up with around $135,000, which was better than nothing, although the industry lawyers had filed an appeal that forced him back to the hospital for a painful second biopsy to “prove” he had mesothelioma. And then they procrastinated so long that the money didn’t come until after he’d died. These were Trump-style-relentless lawyers representing a murderous industry that had known since the 1930s that their product caused this exact disease.
Every senior executive in the industry for the more-than-70 years between the time they discovered how deadly asbestos was and my Dad’s death knew. And participated in the cover-up.
Just like the executives in the tobacco industry, who have known with certainty that they were peddling death and disease since the 1940s and are today responsible for an estimated half-million American deaths every year, including my younger brother Stan who died of COPD last year.
“Psychopath” is the only word that adequately describes these executives, their decision-making employees, and their hired-gun marketers who make millions knowingly selling poisons.
And now comes the fossil fuel industry, with a whole new crop of psychopathic executives, marketers, and attorneys. Burning their products produces air pollution that causes asthma, cancer, heart disease, and strokes; according to Harvard’s T.H. Chan School of Medicine, an estimated 350,000 Americans die prematurely every year because of this industry’s products.
And that doesn’t scratch the surface of the death and destruction on the horizon, as severe weather driven by global warming from fossil fuel emissions kick in. Such events have cost America over $2 trillion and more than 16,000 lives just since Ronald Reagan began denying the science in 1980. Over 60,000 people died in Europe just last year from a series of severe heatwaves.
A new study from the international NGO Global Witness documents how there could be 11.5 million excess deaths from global warming worldwide by 2100 just based on the emissions of five companies between now and 26 years from now: Shell, BP, TotalEnergies, ExxonMobil, and Chevron.
And now we learned that the industry, which has been publicly praising the Paris Accords around reducing emissions and getting climate change under control, have been lying to us again and instead are — across the board — increasing their production of their toxic products.
This and other analyses of the death and destruction wrought by the fossil fuel industry’s carbon pollution have led a number of legal experts to suggest that now may be the time to lay the foundation for the prosecution of fossil fuel companies and their executives for murder or, at the least, manslaughter.
This would not be a new or novel event.
California utility PG&E was convicted of multiple manslaughter counts and paid $3.5 million in fines when their decision to use money that could have upgraded or buried their power lines — but instead went to millions in bonuses and stock buy-backs for their senior executives — led to the death of 85 people in the Camp Fire that consumed the town of Paradise.
Similarly, when BP’s failure to properly use and maintain their blowout preventers led to 11 deaths (and a massive oil spill) in the Deepwater Horizon disaster, that company pleaded guilty to manslaughter. BP and PG&E ultimately paid billions in fines and compensation.
A new analysis published in the Harvard Environmental Law Review (Vol. 48, No. 1, 2024) titled Climate Homicide: Prosecuting Big Oil For Climate Deaths lays out the case for holding fossil fuel industry executives and their companies accountable for the deaths they are causing as you read these words.
“For decades,” the authors write, “fossil fuel companies (‘FFCs’) have known that their product causes ‘globally catastrophic’ climate change. Rather than warn the public or alter their business models, they waged a multi-decade disinformation campaign to sow doubt and delay regulatory responses.
“Today, as experts continue developing and delivering ever more detailed and precise warnings of climate catastrophe, and vast numbers of people are killed at an accelerating rate by wildfires, floods, droughts, heatwaves, and other climate-related calamities, FFCs continue to expand the production, marketing, and sale of the products they have long understood to cause mass death.
“Activists and journalists have called executives of major oil companies ‘mass murderers,’ lamenting that ‘millions of human beings will die so that they can have private planes and huge mansions,’ and a growing chorus of communities devastated by FFCs’ lethal conduct have begun to demand accountability.”
The authors are blunt, arguing that these executives and their companies are knowingly complicit in the deaths of millions of people in America and around the world, with the numbers starting to explode as we cross multiple climate tipping points.
And still, like the asbestos and tobacco executives of the last century, instead of mitigating the harms of their products, they instead fight every effort at transparency or accountability.
“As additional evidence of FFCs’ knowledge of the lethal risks they were generating surfaces through leaks and court-mandated discovery, obstacles to a successful prosecution [for murder or manslaughter] are falling away. At the same time, with every new wave of climate-related deaths, the justification for prosecution grows.
“Although some of the harmful externalities that FFCs generate may be suitable for tort or regulatory suits, the lethality of FFCs’ conduct, their awareness of the risks they are generating, and their efforts to obscure those risks make criminal prosecution for homicide particularly appropriate.
“Perhaps most importantly, if FFCs continue to fight against all major efforts to reduce the harms they are generating, and if they continue to obstruct or delay state and federal regulation and civil suits designed to reduce the lethal impact of their conduct, then homicide prosecutions may prove necessary to prevent the escalating threat that their lethal conduct poses to millions of potential victims in the United States.”
Indeed, at a conference in Houston this week, Saudi Aramco’s CEO, Amin Nasser, was explicit with a comment that drew loud applause from his oil industry audience:
“We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately.”
Similarly, Fortune magazine reported last month that the fossil fuel industry is positioning itself to be the largest donor to the Trump campaign, having already given him over $7 million following his recent promises to “drill, baby, drill” and to end all subsidies for electric vehicles and solar or wind power projects.
And, in response to President Biden’s tightening emission standards, the largest fossil fuel lobbying group has proudly announced an “8-figure” advertising campaign called “Lights On” to, as American Petroleum Institute CEO Mike Sommers told CNN, “dismantle policy threats” to the industry.
Commenting on it, The Los Angeles Times editorial board was emphatic:
“Californians should be wise enough to see this messaging for what it is: The behavior of a threatened, greed-driven industry trying to trick us into letting it hold onto its dirty and harmful old ways of doing business.”
This denial of the crisis and doubling down on advertising and more emissions is, of course, no solution.
In past articles here on Hartmann Report, I’ve argued for the US government to nationalize the three largest American fossil fuel companies by purchasing their stock in the marketplace; the total cost would be less than the Trump tax cuts for billionaires, and with new management the companies could help our nation’s transition away from its addiction to oil, coal, and natural gas.
Today there are families all across the country who are mourning the loss of their loved ones to climate-change-fueled floods, heatstroke, and violent weather as much as I grieved my father’s death at the hands of the asbestos industry executives.
They deserve justice, and the industry needs a wake-up call like the asbestos industry got in the late 1990s, leading to a wave of bankruptcies.
Holding murderous executives and their rogue companies bent on profiting from unnecessary death and destruction is imperative. As New Jersey Attorney General Matthew Platkin noted a few months ago:
“Based on their own research, these companies understood decades ago that their products were causing climate change and would have devastating environmental impacts down the road.
“They went to great lengths to hide the truth and mislead the people of New Jersey and the world. In short, these companies put their profits ahead of our safety. It’s long overdue that the facts be aired in a New Jersey court and the perpetrators of the disinformation campaign pay for the harms they’ve caused.”
The men (they were almost certainly all men) who made the intentional decision to murder my father for profit are long dead; the men and women who today are plotting to render much of our beautiful planet uninhabitable are very much with us.
It’s beyond time to hold them accountable.
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Industry Elites Applaud Saudi Aramco CEO for Calling Oil Phaseout a 'Fantasy'
"The fossil fuel industry has always pursued a strategy of delay when it comes to the climate crisis," said one campaigner. "First, it was focused on casting doubt on the science. Now, it's all about casting doubt on the solutions."
Mar 19, 2024
The CEO of the world's largest oil company said Monday that calls to phase out fossil fuels are a "fantasy" that policymakers should abandon, a remark that drew applause from energy elites gathered in Houston, Texas for a major industry conference.
"We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately reflecting realistic demand assumptions," Saudi Aramco chief executive Amin Nasser told CERAWeek attendees, dismissing the International Energy Agency's projection that global fossil fuel demand will peak by 2030.
"Peak oil and gas is unlikely for some time to come, let alone 2030," Nasser said, suggesting oil consumption could continue growing through 2045. That scenario would serve the interests of Saudi Aramco, which in 2022 posted the largest-ever annual profit for a fossil fuel company.
Power Shift Africa, a climate think tank, called Nasser's comments "outrageous."
Jamie Henn, director of Fossil Free Media,
noted that "the fossil fuel industry has always pursued a strategy of delay when it comes to the climate crisis."
"First, it was focused on casting doubt on the science," he observed. "Now, it's all about casting doubt on the solutions."
"It's clear that not only are they not committed to reducing emissions, they've actually come to CERAWeek to continue promoting fossil fuel production and extraction and delaying the transition to a just, clean energy future."
Climate scientists say that a rapid, global transition away from fossil fuel production and toward renewable energy is necessary to avert the worst of the planetary emergency, which is driving increasingly destructive and deadly extreme weather events, sea-level rise, ocean warming, and other alarming phenomena.
But Nasser claimed technologies such as carbon capture—which has repeatedly proven to be ineffective and even harmful—are better at lowering emissions than "alternative energies," Reuters reported. Nasser specifically criticized wind, solar, and electric vehicles and said that "we should phase in new energy sources and technologies when they are genuinely ready, economically competitive, and with the right infrastructure."
Just one day after Nasser's remarks, the World Meteorological Organization (WMO) released a report showing that "renewable energy generation, primarily driven by the dynamic forces of solar radiation, wind, and the water cycle, has surged to the forefront of climate action for its potential to achieve decarbonization targets."
The WMO said Tuesday that renewable energy capacity increased nearly 50% last year compared to 2022.
But the continued production and burning of fossil fuels is wreaking global havoc, the WMO found, pushing planet-warming greenhouse gas emissions and temperatures to all-time highs.
In the face of such alarming findings, the major oil and gas industry players have rolled back their own weak emissions commitments and—in the case of ExxonMobil CEO Darren Woods—blamed the public for fueling the climate crisis.
"For years we've demanded action, not empty words, from Big Oil," Josh Eisenfeld, campaign manager of corporate accountability, said in a statement before the Houston conference kicked off on Monday. "If you look at their actions, it's clear that not only are they not committed to reducing emissions, they've actually come to CERAWeek to continue promoting fossil fuel production and extraction and delaying the transition to a just, clean energy future."
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Latest BlackRock Board Appointment Shows Truth Is Worse Than Conspiracy Theory
While our planet was experiencing its hottest month of all time, the Earth’s biggest pile of cash named to its board of directors the CEO of the world’s largest oil company, Saudi Aramco.
Jul 24, 2023
A problem with conspiracy theories—aside from the fact that they always get around to involving “ the Jews”—is that they distract us from what’s happening in plain sight.
So, in case you missed it, here’s the biggest thing that happened in the world last week: While our planet was experiencing its hottest month of all time, the Earth’s biggest pile of cash (the asset manager BlackRock, with $8.59 trillion dollars under management) named to its board of directors the CEO of the world’s largest oil company, Saudi Aramco, which has produced more carbon emissions than any firm on earth.
This decision was barely even noted— The New York Times produced a nine-paragraph account in its Dealbook newsletter. And yet think of what it means. It is the ultimate signal that the world’s financial community has decided to essentially give up on even the modest commitments they made a couple of years ago in Glasgow, where they said they would work to decarbonize their portfolios.
It’s gross when the PGA does business with the murderous Saudi regime; it’s life-or-death for everyone when the biggest business in the world sucks up to the biggest oil company.
Two things have happened since they made those big pledges (BlackRock’s Larry Fink said at the time, “We are on the edge of a fundamental reshaping of finance” to deal with the climate crisis). First, the war in Ukraine produced huge profits for the oil industry, as their old pal Vladimir Putin (who once hung a medal around the neck of Exxon’s CEO) pushed the price of petroleum into the stratosphere. And second, the oil industry’s bought-and-paid-for politicians in red-state America wrote nasty letters about “ESG investing” and threatened to break ties with the Wall Street firms that were “going woke.” Those two developments were more than enough to persuade barons like Fink to walk back their professed concern with a planet on fire. He is clearly a go-along get-along guy, and where we’re going is—well, if not hell then someplace with a similar temperature. (So far seven people have died and 85 have been hospitalized in Phoenix simply from burns from touching the pavement). It’s gross when the PGA does business with the murderous Saudi regime; it’s life-or-death for everyone when the biggest business in the world sucks up to the biggest oil company.
So what does stand-up leadership look like? Here’s Brad Lander, the comptroller of New York City. It’s not a sexy job (not like, say, running for president as your first public office). He’s the money guy, balancing the city’s books. But New York City has a lot of money, and that money gives you the power to do useful things that help people. When it got unbearably hot, Lander put out a video pointing out that the big banks the city does business with were still bankrolling the fossil fuel industry. It is straightforward, powerful, plainspoken:
And a few days later, when the Saudi Aramco news came out, Lander was again just about the only public servant I saw react:
“BlackRock has clearly stated that climate risk is an investment risk, but actions speak louder than words,” New York City Comptroller Brad Lander said in an emailed statement. “At a time when financial institutions need to take a collective approach to addressing the financial risks from climate change, BlackRock shareholders expect climate-competent, not climate-conflicted, directors.”
This matters. BlackRock is the largest external money manager for the city of New York. Lander can move that business and it will hurt BlackRock; and his words will at least be heard in the din of Wall Street. Others are starting to figure out just how irredeemable the fossil fuel industry is. Here, for instance, is an editorial in the Los Angeles Times last week that I think is the most forthright declaration ever on Big Oil by a major American newspaper. Forget pretending that the Exxons and Aramcos will ever change their stripes: instead, “kick them to the curb.” I’m going to quote from it at length because the paper’s editorial board was not engaging in the usual tentative to-ing and fro-ing. They just said it:
It should be obvious by now that fossil fuel companies have no real plans to change in response to the climate crisis. And that the only way forward is without them.
Some high-profile environmental leaders have come to a similar conclusion recently, among them influential climate negotiator Christiana Figueres, under whose tenure as executive secretary of the United Nations Framework Convention on Climate Change the landmark 2015 Paris agreement was developed. She wrote in Al Jazeera earlier this month that after years of holding out hope that oil and gas companies would wake up and participate in the decarbonization of the economy, their actions over the last 12 months have changed her mind.
Former Vice President Al Gore, a longtime champion for climate action, has also been speaking with refreshing frankness about fossil fuel industry obstruction, decrying “anti-climate plotting” by companies that refuse to disclose their emissions or commit to phasing them out while they successfully push government policies to slow down the transition to clean energy.
It’s a little late for powerful voices from older generations to come to the realization that fossil fuel companies aren’t operating in good faith and will fight climate action until the bitter end. But it’s welcome nonetheless, and there’s clear generational shift in that direction that offers some hope. Polling last year by the Pew Research Center found that while most Americans are reluctant to ditch fossil fuels, younger adults are much more supportive of phasing out oil, gas, and coal entirely.
This is the spirit that we desperately need—the spirit that focuses on the actual, the concrete, the things before our eyes. Like the unbearable heat. Not long before his assassination, Robert F. Kennedy gave a speech at the University of Kansas where he spoke about the real with as much eloquence as any American ever mustered. There was a man who could have been forgiven a conspiracy theory or two—after all, his brother had been killed just five years before. But here’s where he was focused:
Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product—if we judge the United States of America by that—that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.
Brad Lander, born the next year, is heir to that tradition, and so are the editorialists of the Los Angeles Times, and so are all the other Americans who keep their eye on the moment.
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'Shocking': Saudi Aramco Posts Largest-Ever Annual Profit for a Fossil Fuel Company
"These extraordinary profits, and any future income derived from Aramco, should not be deployed to finance human rights abuses, cover them up, or try and gloss over them," said Amnesty International.
Mar 12, 2023
Saudi Aramco, an oil giant almost entirely owned by the government of Saudi Arabia, announced Sunday that it brought in a staggering $161.1 billion in profits last year as it joined other fossil fuel companies in capitalizing on energy market turmoil sparked by Russia's invasion of Ukraine.
The company's profit figure for 2022 is the largest ever recorded by an oil corporation. Amin Nasser, Aramco's CEO, declared on an earnings call that "this is probably the highest net income ever recorded in the corporate world."
For comparison, ExxonMobil—the second-largest oil company in the world behind Aramco—reported $56 billion in net income last year, a record for the U.S. firm but nowhere close to the Saudi corporation's haul.
"It is shocking for a company to make a profit of more than $161.1 billion in a single year through the sale of fossil fuel—the single largest driver of the climate crisis," Agnès Callamard, secretary-general of Amnesty International, said in a statement. "It is all the more shocking because this surplus was amassed during a global cost-of-living crisis and aided by the increase in energy prices resulting from Russia's war of aggression against Ukraine."
Aramco said its banner profits—driven by "stronger crude oil prices, higher volumes sold, and improved margins for refined products"—were up nearly 47% compared to 2021, a windfall the company has used to reward investors.
"Aramco declared a dividend of $19.5 billion for the fourth quarter, to be paid in Q1 2023," the oil firm said in a press release. "This represents a 4.0% increase compared to the previous quarter, aligned with the company's dividend policy aiming to deliver a sustainable and progressive dividend. Additionally, the Board of Directors also recommended the distribution of bonus shares to eligible shareholders in the amount of one share for every 10 shares held."
While Aramco said it intends to devote resources to "lower-carbon technologies" and carbon-capture initiatives that climate campaigners have dismissed as false solutions, the company made clear that it has no intention of shifting aggressively away from fossil fuel production—a transition scientists say is necessary to avert climate catastrophe.
In its earnings announcement, Aramco said it is committed to "expanding oil, gas, and chemicals production."
Saudi Arabia is the second-largest oil producer in the world behind the United States. Late last year, the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) agreed to slash oil production by 2 million barrels a day in a bid to keep prices high—benefiting companies like Aramco, Exxon, and other fossil fuel majors that have posted record-shattering 2022 profits as households struggle to heat their homes.
"It is past time that Saudi Arabia acted in humanity's interest and supported the phasing out of the fossil fuel industry, which is essential for preventing further climate harm," Callamard said Sunday. "These extraordinary profits, and any future income derived from Aramco, should not be deployed to finance human rights abuses, cover them up, or try and gloss over them."
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The Coming World of 'Peak Oil Demand,' Not 'Peak Oil'
Debacle at Doha and the collapse of the 'Old Oil Order'
Apr 28, 2016
Sunday, April 17th was the designated moment. The world's leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices. Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels. In anticipation of such a deal, oil prices had begun to creep inexorably upward, from $30 per barrel in mid-January to $43 on the eve of the gathering. But far from restoring the old oil order, the meeting ended in discord, driving prices down again and revealing deep cracks in the ranks of global energy producers.
It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we've known these last decades -- with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers -- is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.
The Road to Doha
Before the Doha gathering, the leaders of the major producing countries expressed confidence that a production freeze would finally halt the devastating slump in oil prices that began in mid-2014. Most of them are heavily dependent on petroleum exports to finance their governments and keep restiveness among their populaces at bay. Both Russia and Venezuela, for instance, rely on energy exports for approximately 50% of government income,while for Nigeria it's more like 75%. So the plunge in prices had already cut deep into government spending around the world, causing civil unrest and even in some cases political turmoil.
No one expected the April 17th meeting to result in an immediate, dramatic price upturn, but everyone hoped that it would lay the foundation for a steady rise in the coming months. The leaders of these countries were well aware of one thing: to achieve such progress, unity was crucial. Otherwise they were not likely to overcome the various factors that had caused the price collapsein the first place. Some of these were structural and embedded deep in the way the industry had been organized; some were the product of their own feckless responses to the crisis.
On the structural side, global demand for energy had, in recent years, ceased to rise quickly enough to soak up all the crude oil pouring onto the market, thanks in part to new supplies from Iraq and especially from the expanding shale fields of the United States. This oversupply triggered the initial 2014 price drop when Brent crude -- the international benchmark blend -- went from a high of $115 on June 19th to $77 on November 26th, the day before a fateful OPEC meeting in Vienna. The next day, OPEC members, led by Saudi Arabia, failed to agree on either production cuts or a freeze, and the price of oil went into freefall.
The failure of that November meeting has been widely attributed to the Saudis' desire to kill off new output elsewhere -- especially shale production in the United States -- and to restore their historic dominance of the global oil market. Many analysts were also convinced that Riyadh was seeking to punish regional rivals Iran and Russia for their support of the Assad regime in Syria (which the Saudis seek to topple).
The rejection, in other words, was meant to fulfill two tasks at the same time: blunt or wipe out the challenge posed by North American shale producersand undermine two economically shaky energy powers that opposed Saudi goals in the Middle East by depriving them of much needed oil revenues. Because Saudi Arabia could produce oil so much more cheaply than other countries -- for as little as $3 per barrel -- and because it could draw upon hundreds of billions of dollars in sovereign wealth funds to meet any budget shortfalls of its own, its leaders believed it more capable of weathering any price downturn than its rivals. Today, however, that rosy prediction is looking grimmer as the Saudi royals beginto feel the pinch of low oil prices, and find themselves cutting back on the benefits they had been passing on to an ever-growing, potentially restive population while still financing a costly, inconclusive, and increasingly disastrous war in Yemen.
Many energy analysts became convinced that Doha would prove the decisive moment when Riyadh would finally be amenable to a production freeze. Just days before the conference, participants expressed growing confidencethat such a plan would indeed be adopted. After all, preliminary negotiations between Russia, Venezuela, Qatar, and Saudi Arabia had produced a draft document that most participants assumed was essentially ready for signature. The only sticking point: the nature of Iran's participation.
The Iranians were, in fact, agreeable to such a freeze, but only after they were allowed to raise their relatively modest daily output to levels achievedin 2012 before the West imposed sanctions in an effort to force Tehran to agree to dismantle its nuclear enrichment program. Now that those sanctions were, in fact, being lifted as a result of the recently concluded nuclear deal, Tehran was determined to restore the status quo ante. On this, the Saudis balked, having no wish to see their arch-rival obtain added oil revenues. Still, most observers assumed that, in the end, Riyadh would agree to a formula allowing Iran some increase before a freeze. "There are positive indications an agreement will be reached during this meeting... an initial agreement on freezing production," said Nawal Al-Fuzaia, Kuwait's OPEC representative, echoing the views of other Doha participants.
But then something happened. According to people familiar with the sequence of events, Saudi Arabia's Deputy Crown Prince and key oil strategist, Mohammed bin Salman, called the Saudi delegation in Doha at 3:00 a.m. on April 17th and instructed them to spurn a deal that provided leeway of any sort for Iran. When the Iranians -- who chose not to attend the meeting -- signaled that they had no intention of freezing their output to satisfy their rivals, the Saudis rejected the draft agreement it had helped negotiate and the assembly ended in disarray.
Geopolitics to the Fore
Most analysts have since suggested that the Saudi royals simply considered punishing Iran more important than lowering oil prices. No matter the cost to them, in other words, they could not bring themselves to help Iran pursue its geopolitical objectives, including giving yet more support to Shiite forces in Iraq, Syria, Yemen, and Lebanon. Already feeling pressured by Tehran and ever less confident of Washington's support, they were ready to use any means available to weaken the Iranians, whatever the danger to themselves.
"The failure to reach an agreement in Doha is a reminder that Saudi Arabia is in no mood to do Iran any favors right now and that their ongoing geopolitical conflict cannot be discounted as an element of the current Saudi oil policy," said Jason Bordoff of the Center on Global Energy Policy at Columbia University.
Many analysts also pointed to the rising influence of Deputy Crown Prince Mohammed bin Salman, entrusted with near-total control of the economy and the military by his aging father, King Salman. As Minister of Defense, the prince has spearheaded the Saudi drive to counter the Iranians in a regional struggle for dominance. Most significantly, he is the main force behind Saudi Arabia's ongoing intervention in Yemen, aimed at defeating the Houthi rebels, a largely Shia group with loose ties to Iran, and restoring deposed former president Abd Rabbuh Mansur Hadi. After a year of relentless U.S.-backed airstrikes (including the use of cluster bombs), the Saudi intervention has, in fact, failed to achieve its intended objectives, though it has produced thousands of civilian casualties, provoking fierce condemnation from U.N. officials, and created space for the rise of al-Qaeda in the Arabian Peninsula. Nevertheless, the prince seems determined to keep the conflict going and to counter Iranian influence across the region.
For Prince Mohammed, the oil market has evidently become just another arena for this ongoing struggle. "Under his guidance," the Financial Times noted in April, "Saudi Arabia's oil policy appears to be less driven by the price of crude than global politics, particularly Riyadh's bitter rivalry with post-sanctions Tehran." This seems to have been the backstory for Riyadh's last-minute decision to scuttle the talks in Doha. On April 16th, for instance, Prince Mohammed couldn't have been blunter to Bloomberg, even if he didn't mention the Iranians by name: "If all major producers don't freeze production, we will not freeze production."
With the proposed agreement in tatters, Saudi Arabia is now expected to boost its own output, ensuring that prices will remain bargain-basement low and so deprive Iran of any windfall from its expected increase in exports. The kingdom, Prince Mohammed told Bloomberg, was prepared to immediately raise production from its current 10.2 million barrels per day to 11.5 million barrels and could add another million barrels "if we wanted to" in the next six to nine months. With Iranian and Iraqi oil heading for market in larger quantities, that's the definition of oversupply. It would certainly ensure Saudi Arabia's continued dominance of the market, but it might also wound the kingdom in a major way, if not fatally.
A New Global Reality
No doubt geopolitics played a significant role in the Saudi decision, but that's hardly the whole story. Overshadowing discussions about a possible production freeze was a new fact of life for the oil industry: the past would be no predictor of the future when it came to global oil demand. Whatever the Saudis think of the Iranians or vice versa, their industry is being fundamentally transformed, altering relationships among the major producers and eroding their inclination to cooperate.
Until very recently, it was assumed that the demand for oil would continue to expand indefinitely, creating space for multiple producers to enter the market, and for ones already in it to increase their output. Even when supply outran demand and drove prices down, as has periodically occurred, producers could always take solace in the knowledge that, as in the past, demand would eventually rebound, jacking prices up again. Under such circumstances and at such a moment, it was just good sense for individual producers to cooperate in lowering output, knowing that everyone would benefit sooner or later from the inevitable price increase.
But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it's every producer for itself in a mad scramble to protect market share. This new reality -- a world in which "peak oil demand," rather than "peak oil," will shape the consciousness of major players -- is what the Doha catastrophe foreshadowed.
At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of "peak oil"; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall. This can be traced both to slowing economic growth globally and to an accelerating "green revolution" in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.
This is no theoretical construct. It's reality itself. Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line. While the demand for oil does continue to rise in the developing world, even there it's not climbing at rates previously taken for granted. With such countries also beginning to impose tougher constraints on carbon emissions, global consumption is expected to reach a peak and begin an inexorable decline. According to experts Thijs Van de Graaf and Aviel Verbruggen, overall world peak demand could be reached as early as 2020.
In such a world, high-cost oil producers will be driven out of the market and the advantage -- such as it is -- will lie with the lowest-cost ones. Countries that depend on petroleum exports for a large share of their revenues will come under increasing pressure to move away from excessive reliance on oil. This may have been another consideration in the Saudi decision at Doha. In the months leading up to the April meeting, senior Saudi officials dropped hints that they were beginning to plan for a post-petroleum era and that Deputy Crown Prince bin Salman would play a key role in overseeing the transition.
On April 1st, the prince himself indicated that steps were underway to begin this process. As part of the effort, he announced, he was planning an initial public offering of shares in state-owned Saudi Aramco, the world's number one oil producer, and would transfer the proceeds, an estimated $2 trillion, to its Public Investment Fund (PIF). "IPOing Aramco and transferring its shares to PIF will technically make investments the source of Saudi government revenue, not oil," the prince pointed out. "What is left now is to diversify investments. So within 20 years, we will be an economy or state that doesn't depend mainly on oil."
For a country that more than any other has rested its claim to wealth and power on the production and sale of petroleum, this is a revolutionary statement. If Saudi Arabia says it is ready to begin a move away from reliance on petroleum, we are indeed entering a new world in which, among other things, the titans of oil production will no longer hold sway over our lives as they have in the past.
This, in fact, appears to be the outlook adopted by Prince Mohammed in the wake of the Doha debacle. In announcing the kingdom's new economic blueprint on April 25th, he vowed to liberate the country from its "addiction" to oil." This will not, of course, be easy to achieve, given the kingdom's heavy reliance on oil revenues and lack of plausible alternatives. The 30-year-old prince could also face opposition from within the royal family to his audacious moves (as well as his blundering ones in Yemen and possibly elsewhere). Whatever the fate of the Saudi royals, however, if predictions of a future peak in world oil demand prove accurate, the debacle in Doha will be seen as marking the beginning of the end of the old oil order.
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