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Shell Wins Appeal in Climate Case: Does Big Oil Really Bear Responsibility for Carbon Emissions?
11/13/2024
Shell overturned a landmark court order demanding it cut emissions by nearly half. Is this a victory for Big Oil or just a delay in the climate accountability movement?
Shell Overturns Landmark Emissions Ruling
Shell scored a major legal victory Tuesday, successfully appealing a 2021 ruling that had ordered it to cut carbon emissions by 45% by the end of this decade. This decision, delivered in a high-stakes climate case, is seen as a setback for environmental groups hoping to make energy giants accountable for their contributions to climate change.
Climate advocates celebrated the initial ruling as a breakthrough, setting a potential precedent for holding large corporations responsible for their environmental impact.
On Tuesday, however, the appeals court ruled that while Shell does have a duty to reduce emissions, there isn’t a clear-cut reduction target that can be legally enforced on a single company. The court said “Insufficient consensus in climate science” on an exact percentage makes it challenging to impose specific requirements on Shell alone, leaving broader questions open.
Climate Groups Call it a “Shocking Setback”
Friends of the Earth, which had spearheaded the case, labeled the decision a “shocking setback” for climate efforts, emphasizing that pressure on corporations remains crucial even without legally binding targets. “Large polluters are powerful. But united, we as people have the power to change them,” said Donald Pols, the group’s director. The organization hasn’t confirmed whether it will pursue an appeal to the Supreme Court, a move that could extend the legal battle for years. In a statement, Friends of the Earth underscored its determination to continue fighting for corporate accountability on climate issues.
Shell Argues Emissions Reduction is a Shared Responsibility
Shell’s response to the appeals court decision has been assertive. The company maintains that legally binding emissions cuts would have little impact if they don’t address the overall demand for fuel products. CEO Wael Sawan, who took over in 2023, has argued that real progress on emissions requires action from governments, markets, and industries at large, not mandates on individual companies.
Shell has further contended that unilateral obligations to reduce emissions could force the company to shrink by selling off assets, which may shift emissions elsewhere without decreasing global fossil fuel consumption.
In a response to the court’s decision, Sawan remarked, “We are pleased with the court’s decision, which we believe is the right one for the global energy transition.” He also reiterated Shell’s view that achieving meaningful reductions demands systemic changes that involve governments and industries working together.
Broader Questions on Corporate Accountability
Legal experts say that the court’s ruling reflects an evolving view of corporate responsibility, with the court acknowledging Shell’s duty to reduce emissions while stopping short of prescribing specific targets. They say this could lead to more challenges in court as corporations argue over what constitutes adequate climate responsibility. “Doing nothing is not acceptable. But what you should be doing is still very open,” explained Mijke Sinninghe Damsté, a partner specializing in environmental litigation.
The judgment highlights a central issue in the fight for climate accountability: Should a single company bear responsibility for emissions generated by end-users, like drivers and industries? Climate advocates argue that companies like Shell, which produce and sell fossil fuels, play a role in driving emissions and should be held accountable. However, Shell has consistently pushed back, arguing that effective emissions reduction is a societal challenge that requires coordinated global action.
Exxon Mobil on Corporate Climate Guidance
Shell isn’t alone in voicing concerns over climate mandates. Exxon Mobil CEO Darren Woods has also underscored the importance of stable policies for businesses addressing climate issues. In an interview, Woods said companies need consistent government guidance, warning that constant policy shifts create inefficiencies and uncertainties for corporations navigating the energy transition. Shell and Exxon have maintained that long-term, coordinated efforts are essential to make any real dent in global emissions.
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Exxon Mobil and Pioneer Merge in $60 Billion Deal to Dominate Shale Market
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Exxon Mobil (XOM.N) has reached an agreement to acquire its domestic competitor, Pioneer Natural Resources (PXD.N). This all-stock transaction, which places a valuation of $59.5 billion on the deal, promises to establish Exxon as the preeminent producer in the U.S.'s most extensive oilfield. At a valuation of $253 per share, this merger brings together the prowess of Exxon, America's largest oil entity, with Pioneer, a standout performer that has risen to prominence during the shale boom.
Mexico Pacific LNG: A New Export Era Anchored by Permian Gas
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Natural gas from the U.S. Permian Basin is set to be the primary source for Mexico's Pacific's Saguaro Energía LNG facility. Located in Puerto Libertad, Sonora, the Saguaro Energía LNG export facility will feature three processing trains. The site is primed for potential expansion with plans for three additional trains of similar capacity. Its strategic Pacific Coast location offers a 55% shorter shipping route to Asia, providing significant savings and reduced carbon emissions.
Shell overturned a landmark court order demanding it cut emissions by nearly half. Is this a victory for Big Oil or just a delay in the climate accountability movement?
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Before it was Expand Energy, the largest natural gas-weighted exploration and production company in the U.S., it was Chesapeake Energy. This company faced and survived nearly every extreme the energy industry could throw, including bankruptcy. With its recent $7.4 billion merger with Southwestern Energy, Expand Energy has achieved a new milestone: it’s the largest natural gas producer in the U.S., powered by substantial reserves and resources across crucial shale regions.
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Oil companies across the Gulf of Mexico are springing into action as Tropical Storm Rafael bears down, marking yet another disruption in a storm-laden season. BP, Chevron, Equinor, and Shell are evacuating offshore staff and preparing for potential impacts on their platforms, an all-too-familiar ritual for Gulf operators this year.