News Treehugger Voices Big Oil's Bad Week Was Good News for National Oil Companies More reasons why we should be working the demand, not the supply side. By Lloyd Alter Design Editor University of Toronto Lloyd Alter is Design Editor for Treehugger and teaches Sustainable Design at Ryerson University in Toronto. our editorial process Facebook Facebook Twitter Twitter Lloyd Alter Published June 7, 2021 12:07PM EDT Fact checked by Haley Mast Fact checker Harvard University Extension School Haley Mast is a writer, fact checker, and conservationist with a certification in sustainability. Our Fact-Checking Process Article fact-checked on Jun 07, 2021 Haley Mast Reza/Getty Images Share Twitter Pinterest Email News Environment Business & Policy Science Animals Home & Design Current Events Treehugger Voices The International Energy Agency (IEA) recently issued a report, Net-Zero by 2050, that essentially says there should be no more approvals of oil, gas, or coal developments from this moment forward. Shortly after, Big Oil in the U.S. and Europe had a very bad week in the courtrooms and the boardrooms. The international response from government-owned oil companies to both events has been... illuminating. In our previous coverage of this report—"We Must Ditch Fossil Fuels Now To Reach Net-Zero by 2050"—we noted that "one can imagine how this will play out in Texas and Alberta." That was a bit short-sighted; they are big players on the world stage. As the notorious Carbon Majors Database report pointed out, 20% of global emissions come from people burning fossil fuels made by investor-owned companies like ExxonMobil, Chevron, and Shell, while 50% of global emissions come from people burning fossil fuels made by National Oil Companies (NOCs), and they think the IEA report is a big joke. Those NOCs are telling the IEA what they think. Reuters reports that at the Saudi-led Organization of the Petroleum Exporting Countries (OPEC), Saudi energy minister Prince Abdulaziz bin Salman said: "It (the IEA report) is a sequel of the La La Land movie. Why should I take it seriously?" Quoted in Bloomberg, Russian deputy prime minister Alexander Novak said following the IEA road map and stopping investment in new fields would drive prices through the roof. "The price for oil will go to, what, $200? Gas prices will skyrocket.” He is not alone. "The 'euphoria' around the transition to clean energy is 'dangerous,'” said Qatar’s energy minister Saad Sherida Al Kaabi at the St. Petersburg International Economic Forum in Russia on Thursday. “When you deprive the business from additional investments, you have big spikes” in prices." Rosneft—the Russian State Oil company–Chief Executive Officer Igor Sechin says a switch off oil is decades away. He said at the forum: “Some ecologists and politicians urge for a hasty energy transition, yet it requires an unrealistically fast launch of renewable energy sources and faces issues with storage, ensuring reliability and stability of power generation... Based on existing estimates, about $17 trillion should be invested in the global oil and gas sector to support current output levels until 2040." Carbon Majors Report On that Black Wednesday for the big investor-owned oil companies, when Shell, Exxon Mobil Chevron got beat up in court and in the boardroom, Treehugger's Sami Grover said it was "not a good day for big oil." But it was a very good day for the NOCs. Saudi energy minister Salman noted happily, "We (Saudi Arabia) are ... producing oil and gas at low cost and producing renewables. I urge the world to accept this as a reality: that we’re going to be winners of all of these activities." According to Reuters, a high-level executive from Russia's Gazprom said: "It looks like the West will have to rely more on what it calls 'hostile regimes' for its supply." This is why I keep saying it is consumption that drives the oil business, not production. It is our demand, not their supply. That comes either from personal choices or legislation, like a big honking carbon tax that makes owning gasoline-powered cars or gas-powered houses a lot less attractive. Others have been saying this too. Jason Bordoff, cofounding dean of the Columbia Climate School and a columnist at Foreign Policy suggests that the activists who went after the producers should also go after those who encourage consumers: "Perhaps the lawsuits against Big Oil will spur similar ones against industries producing products that use oil, such as automakers, airlines, and shipping firms, and force them to move more quickly to create carbon-free alternatives." He concludes that the victories in the boardrooms and the courtrooms could be pyrrhic if we don't also deal with the demand side: "Forcing oil majors to curb investment only leads to emissions reductions if global oil demand declines, too. Otherwise, underinvestment creates economic, political, and geopolitical risks that could actually undermine the rapid decarbonization needed to combat the climate crisis. Last week’s court ruling and shareholder votes may have been a blow to the oil industry, but they will only be a blow to climate change if stronger policies, incentives, and innovation work in tandem to rapidly curb oil use and emissions." In summary, the NOCs are mocking the IEA report and are enjoying Big Oil's bad week, and unless we reduce demand fast, they are going to get even richer and more powerful. View Article Sources "Net Zero by 2050." iea, 2021. "The Carbon Majors Database." CDP, 2017.