This briefing contains an overview of the corporate lobbying detected by InfluenceMap related to fossil fuels in February 2024.
Global: Oil and gas entities continue to rally against Biden's LNG export pause, as companies, associations, and lawmakers advocate for new legislation to overturn the decision, citing geopolitical and economic concerns.
US and Canada: Exxon challenges the U.S. Securities and Exchange Commission (SEC) shareholder process in a lawsuit against investors Arjuna Capital and Follow This over emissions reduction targets. Simultaneously, the Independent Petroleum Association of America (IPAA) opposes the EPA’s Methane Emissions Reporting rules and the methane tax, expressing worries about small energy producers. Meanwhile, in Canada, the Canadian Association of Petroleum Producers (CAPP) resists methane regulations, pushing for a nuanced approach to the 75% reduction target in the oil and gas sector.
Australia: New analysis from InfluenceMap, released in February, reveals a significant pushback from companies and industry associations within the fossil fuel value chain against any mention of reducing fossil gas demand in Australia's Future Gas Strategy, and continue to advocate for increased investments and the development of new fossil gas supplies
Following the initial negative reactions highlighted in our previous newsletter, the oil and gas industry continues to grapple with the repercussions of the Biden administration's decision to temporarily halt pending liquified natural gas (LNG) export approvals. February has seen a stream of public statements from the industry in Europe and the US in opposition to the pause. Industry responses are misaligned with the science-based policy recommendations of the Intergovernmental Panel on Climate Change (IPCC).
This briefing contains an overview of the corporate lobbying detected by InfluenceMap related to fossil fuels for the month of January 2024.
Advocacy for US LNG Exports from the European Oil and Gas Industry: On January 30th, in response to the pause, the International Gas Union's Secretary General, Menalos Ydreos, stressed the enduring role of fossil gas and advocated for increased US LNG exports to Europe. On February 8th, Eurogas testified in a US Senate hearing, urging the Biden administration to reconsider the pause on LNG export permits, citing energy security concerns in Europe. In an article released the same day, TotalEnergies CEO Patrick Pouyanné suggested that the pause would potentially benefit other LNG projects globally, but expressed concerns about its impact on trust in American projects.
American companies remain opposed: Constellation appeared to call for LNG buildout by assuring customers that current projects would not be affected by the DOE’s pause on pending LNG applications. In the presentation slides for its February 2024 energy market intelligence webinar, the company specifically wrote that “the narrative ‘US LNG exports to double by 2028-2029' remains intact.” In a Fortune article from February 1st, the American Petroleum Institute (API) CEO advocated for the repeal of the US government's restrictions on permits for LNG export facilities, contending that such a move would prevent economic harm and thwart the potential growth that would be possible by 2030.
Continued opposition from the Chamber and NAM: The US Chamber of Commerce (the Chamber), and the National Association of Manufacturers (NAM), both of which advocate for businesses and companies across all sectors, also opposed the pause. A February 14th blog post from the Chamber labeled the LNG pause a "grave mistake," highlighting flaws in the DOE's justification and warning of potential global security risks. Another blog post on February 22nd reiterated the Chamber's stance, citing the war in Ukraine and Europe’s subsequent decency on US fossil gas as a reason why the LNG pause would be detrimental. The NAM engaged directly with lawmakers in the House on two occasions. In a February 7th hearing with the House Committee on Small Businesses, NAM suggested that the LNG pause threatens European energy security. In a subsequent hearing on February 15th, NAM suggested that the LNG pause risks leaving allies ‘in the cold,’ and could increase Europe and allies' reliance on the US following the Russian invasion of Ukraine. Also, a February 22nd press release quoted NAM CEO Timmons, who stated that the pause would not solve climate change, and would instead force allies to buy ‘dirty fuel.’
In response to the Biden administration's temporary suspension of approvals for LNG export projects, the U.S. House of Representatives acted swiftly. The Republican-controlled House endorsed a bill aimed at curtailing the administration's authority to freeze LNG export approvals. The legislation, known as H.R. 7176 or the 'Unlocking LNG Potential Act,' passed the House of Representatives. The bill's secondary objective is to transfer approval oversight from the Department of Energy (DOE) to the independent Federal Energy Regulatory Commission (FERC) which, some entities have since suggested, would be free from any perceived politically motivated action that the DOE is otherwise allegedly subject to. The move follows widespread criticism from the fossil fuel industry as well as major cross-sector industry groups. The response from several major associations is highlighted below:
IPAA-led Joint Trade Letter Endorsement: The Independent Petroleum Association of America (IPAA) supported the Act, submitting a joint trade letter on January 30th which also supported the secondary objective of the bill – to shift approval authority over LNG export licenses and permits from the DOE to FERC - stating that such would prevent "political maneuvers" from interfering with energy supplies.
Industry-wide Advocacy for Legislative Reversal: Several oil and gas associations signed onto another joint trades letter to the House of Representatives on February 13th, advocating for the passage of legislation to reverse the Biden Administration pause on LNG exports, citing the need to maintain supply to Europe and undercut Russian influence. Signees of the letter included the American Exploration and Production Council (AXPC), American Gas Association (AGA), American Petroleum Institute (API), Interstate Natural Gas Association of America (INGAA), Texas Oil and Gas Association (TXOGA), and Western States Petroleum Association (WSPA). AXPC CEO Anne Bradbury released a statement on February 15th calling for the passage of the bill to ensure that the US LNG export approvals don't become a ‘political football.’ API also released a statement on the same day, thanking House Leadership for the introduction of the legislation and urging the House of Representatives for its immediate passage.
Chamber's Letter of Support for Legislative Action: The Chamber also showed support for the legislation in a letter to the House of Representatives on February 14th, stating that US LNG plays a crucial role in providing energy security in Europe and Asia.
In January, ExxonMobil filed a lawsuit in a US district court in Texas against two investors, Arjuna Capital and Follow This, to prevent a shareholder proposal brought by the investors from going to a vote. The move, which was supported by the US Chamber and the Business Roundtable, continues a yearslong effort by business interests to roll back shareholder rights by advocating for policy that raises the threshold for shareholders to bring forward proposals. The advocacy also includes calls to expand the circumstances under which companies can exclude proposals from the ballot, and in some cases, asserting that the SEC has no power to require any proposal to appear on companies’ ballots. The proposal asked Exxon to set emissions reduction targets, including for Scope 3 emissions, and in its lawsuit, Exxon asserted that the proposal was “calculated to diminish the company’s existing business.”
In turning to the courts to exclude this shareholder proposal from its proxy statement, Exxon is circumventing the regular SEC “no-action” process that companies typically follow. Exxon takes aim at this process in the lawsuit, writing that it is “flawed” and “has become ripe for abuse by activists.” Days after Exxon filed the lawsuit, the investors withdrew the proposal and promised not to refile, but Exxon stated it would continue to pursue the lawsuit because “the underlying issue remains and must be resolved.” On February 28th, the US Chamber and the Business Roundtable filed an amicus brief with the court in support of Exxon’s position. In their brief, the trade groups also took aim at the SEC, asserting that the regulator’s stance toward shareholder proposals has “encouraged a new surge of ideologically driven proposals.”
The main proponents of this effort alongside the US Chamber and the Business Roundtable, also include the National Association of Manufacturers (NAM). Further details can be found in an October 2023 InfluenceMap briefing. The court’s ruling could have implications for investors that seek to bring shareholder resolutions at other companies.
On February 9th, the Independent Petroleum Association of America (IPAA) submitted a joint letter to the Senate and the House expressing concerns on behalf of 26 trade associations regarding the EPA's new methane emissions regulations and the Methane Emissions Reduction Program (Methane Tax). They called on Congress to “step up and step in,” appearing to advocate to weaken the policy. The letter also calls for either a more realistic definition of a "facility" or otherwise an exclusion of marginal wells from the calculation for the Methane Tax in its place, to avoid ‘unfair economic risk.’ The letter emphasized concerns with several measures related to the treatment of marginal wells – a site that produces less than 90,000 cubic feet (90 MCF) or 15 barrels of oil, a day, as defined by the Internal Revenue Service (IRS). The organizations called for regulatory or legislative solutions and urged Congress to reconsider the perceived impacts on the nation's marginal wells.
With regard to the Methane Tax, the IPAA letter cites Senator Joe Manchin's June 2023 letter to the EPA. Manchin’s letter had emphasized that the tax as enacted by Congress was not intended to encompass small business producers. Manchin had also urged the EPA to establish clear exemptions and boundaries in defining 'facilities' to prevent fees on marginal wells, emphasizing that entities exempt from the current Greenhouse Gas Reporting Program should not be subject to fees under the Methane Emission Reduction Program (MERP). The IPAA states that the EPA has still not addressed the concerns raised in Manchin's letter, suggesting that the core issues related to using certain regulations as the basis for calculating the Methane Tax remain unaddressed.
IPAA's letter challenges the basis of the Methane Tax calculation, particularly opposing the aggregation of emissions from marginal wells. Additionally, it raises concerns about proposed changes in Global Warming Potential (GWP) and emissions factors, as it believes it could result in more operations being subjected to the tax. IPAA urges Congress and the EPA to take immediate action to prevent what it perceives as unfair economic risks and to safeguard marginal wells in the oil and gas industries.
On February 13th, the Canadian Association of Petroleum Producers (CAPP) opposed Canada’s December 2023 amendments to the methane regulation for the upstream oil and gas sector that seek to achieve at least a 75% reduction in oil and gas sector methane emissions by 2030, relative to 2012 levels. In its letter to the Canadian Minister of Environment and Climate Change Steven Guilbeault, CAPP claimed the regulations are incompatible with oil and gas operations and advocated that the 75% methane reduction target should focus on limited sources, instead of total upstream oil sands mining emissions. In a separate letter to the Minister on February 2nd, CAPP stated 'explicit' opposition to the proposed regulatory framework for the Oil and Gas Emissions Cap that seeks to reduce the sector’s GHG emissions in line with Canada’s 2030 Emission Reduction Plan. CAPP further emphasized the negative impact on oil and gas production, suggesting that the government instead focus on “existing proven policy measures” to deliver short-term emission reductions.
In October 2023, Australia’s Department of Industry, Science and Resources released the 'Future Gas Strategy’ consultation paper. The consultation paper highlights the need to shift Australia’s energy system toward net-zero emissions and recognizes that reducing gas demand will support decarbonization while easing affordability and energy security concerns. It also notes that an adequate, but not excessive, supply of gas needs to be maintained.
InfluenceMap’s February 2024 analysis of the consultation responses finds that companies and industry associations from the fossil fuel value chain in Australia have pushed back heavily on any attempt to reference reducing fossil gas demand in the Strategy, all while strongly advocating for new fossil gas supply and investments.
Analyzing fossil fuel advocacy on Australia’s Future Gas Strategy
A total of 34 companies and industry associations in InfluenceMap’s LobbyMap database, which covers the largest and most influential corporate entities in Australia, submitted a response to the consultation. Of those, 26 (76%) advocated in a manner that is misaligned with IPCC guidance on the global use of gas in 1.5°C pathways. Just three companies and associations (Fortescue Metals Group, the Energy Efficiency Council, and the Clean Energy Council) advocated in a manner that is aligned with Science-Based Policy.
Multiple entities from the oil and gas industry used their response to advocate for fossil fuels to be included in the Capacity Investment Scheme, which would give fossil fuel companies access to financing intended for renewables. The Australian Energy Council, the Australian Pipelines and Gas Association, Origin Energy and Woodside Energy each advocated for the Capacity Investment Scheme to expand to include fossil fuels, while the Australian Energy Producers advocated for Australian energy and climate policy to be “technology neutral.”
The consultation responses reveal a lack of positive engagement from other areas of the economy that claim to support the Paris Agreement and Australia’s net zero by 2050 target. Of the 34 respondents covered by InfluenceMap’s database, 30 (88%) came from the energy, metals and mining, and utilities sectors.
The analysis revealed that the fossil fuel industry is relying on several narratives that are shown to be misaligned with science-based policy guidance from authoritative sources - such as the IPCC and International Energy Agency IEA - to advocate for continued fossil gas supply and investments. Inaccurate and misleading claims from industry include the idea that continued fossil fuel expansion is aligned with global climate goals, that new fossil fuel supply is required to support the decarbonization of Australia’s trading partners, and that new fossil fuel supply is needed to protect future domestic energy security. See InfluenceMap’s February 2024 analysis here for a more detailed breakdown of how these claims contradict the science and recommendations of the IPCC and other authoritative bodies.
