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Climate change

The beginning of the end for Big Oil?

David McNew/Getty Images

Last Wednesday was “a bad day for Big Oil”, says Julian Lee in Bloomberg. “Or a good one, depending on your point of view.” After big victories for climate activists, three of the world’s biggest oil firms – Shell, Exxon and Chevron – will have to clean up their act “a lot faster than they were planning”.

A Dutch court sided with environmental campaigners who were suing Shell. It ruled that the Anglo-Dutch company had to decarbonise in line with the Paris agreement, meaning a whopping 45% reduction in emissions by 2030. In the US, a shareholder revolt at Exxon Mobil saw three executives nominated by activist investors join the 12-person board of directors. And shareholders at Chevron voted to change the way they calculate the firm’s emissions, including not just those of the company and its suppliers, but of its customers. These “stinging blows” will make it much harder, and more expensive, to carry on polluting. “The world is changing for Big Oil.”

Don’t get too excited, says Rochelle Toplensky in The Wall Street Journal. Demand for oil is rising after a lockdown dip, prices are at a two-year high and producers are feeling “optimistic”. Forcing Shell to sell less oil just passes on the benefits to bad guys such as Russia and Opec, the Saudi-led cartel of oil producers. Their state-owned energy firms will be delighted to snap up assets like oil rigs that Shell and others are forced to sell off, with “scant consideration” for their carbon footprint.

The geopolitics aren’t great, either, says Dmitry Zhdannikov in Reuters. The West has spent 50 years trying to cut its dependence on dodgy dictators in the Middle East and Russia. Now, as one senior executive at Russia’s Gazprom put it: “It looks like the West will have to rely more on what it calls ‘hostile regimes’ for its supply”.

Not at all, says Tessa Khan in the Guardian. The Shell ruling is “extraordinary” and sets a crucial legal precedent “scrutinising and rejecting” some of the oil industry’s most common excuses. When the company claimed that cutting production would be pointless because rivals would simply fill the gap, the court pulled out evidence showing that cuts to production reduce emissions. Even if they didn’t, Shell is “not absolved” of the need to control its carbon footprint. Shell’s argument that it is simply responding to demand for oil – the “drug dealer’s defence” – received similar scorn. This judgement will be pored over by lawyers for “years to come”, and it’s all down to a small cohort of NGOs with the guts to take one of the world’s richest, most powerful companies to court. “That courage has paid off in ways that may change the course of history.”