Exxon Badge-Stripping: A Move that Will Undermine the Energy Transition

Brussels – Green MEPs proposals for ExxonMobil to lose formal access to the European Parliament will make  the energy transition that much more difficult to deliver.

One of the burdens of delivering the energy transition is the friendly fire on the transition cause from its own side. The recent attempts to strip Exxon of its access to the European Parliament is a good case in point. Such attempts to directly attack major energy companies are counter-productive. Energy companies need to be brought on side to deliver the transition, and such clearly unjustified attacks make it more difficult to build the broad public support to deliver the transition.

friends-supergrid-transition-transmission_30312 The energy transition is a massive global and European undertaking which requires huge amounts of capital to be spent on innovation; it requires even larger amounts of capital to be deployed to roll out the infrastructure and crucially it requires broad and continued public support.  It is at least doubtful that trying to run ExxonMobil out of the European Parliament is likely to help deliver that broad public support. The danger in fact is that this incident will be seized on by activists to further demonise the climate change agenda and transition policies. As a consequence this attempt to penalise a specific energy company will only reduce the prospect of building the consensus vital to deliver the transition.

 The charge levied by MEP Molly Cato and other Green MEPs is that ExxonMobil did not turn up at a hearing investigating climate change denial by energy companies. As the sole concrete basis for removing access to the Parliament it is of itself a rather thin justification. However, the context makes its far more difficult to justify any ban. Prior to the hearing the Company explained that it is facing a number of lawsuits on the same issue in the United States. Facing a parliamentary hearing on the same subject as a civil law suit would make it difficult for any business  to credibly participate in such a hearing.

Furthermore, there is a compelling precedent.  Apple also didn’t attend hearings in relation to a parliamentary investigation into state aid. It was accepted by the parliament in that case that Apple could not realistically be expected to respond to questions over its tax practices whilst at the same time being faced with a European Commission investigation into the same matter.

More fundamentally, one has to ask whether seeking to impose peremptory penalties upon energy companies is actually helping the campaign to build a consensus for an effective  energy transition.  The ideological enemies of climate change on the far right, who are already using climate change as a wedge issue, will seek to exploit such incidents. One can easily imagine ahead of the European elections that they will be sharpening their campaign adverts along the lines of ‘lawless greens come after ExxonMobil today, they will come after you tomorrow’ to polarise opinion, making delivery of the transition much more difficult.

The real focus surely should be on building consensus for the future. As the International Energy Agency’s (IEA) seminal report on renewables in 2017 explained, there is a revolution in the energy transition afoot. Collapsing prices for solar and wind energy are acting as a major driver of the expansion of the renewables sector. Together with a switch from feed in tariffs to auctions, low cost renewables with low or no subsidy is becoming the norm. This is leading to a huge roll out of new renewables capacity. For instance, the Agency predicts that between 2017 and 2022, there will be a roll out of 1000GW of solar power capacity. This is equivalent to half the global power capacity of coal fired power stations, which took 80 years to roll out.

 We should be building broad-based support for our greater capacity to deliver the mass roll out of renewables. This requires building support across political constituencies and interests and it includes engaging with energy companies to assist in delivering the transition, rather than seeking to target and demonise them.

Surely the real focus of parliamentary questioning of energy companies in 2019 should be what are you doing for the energy transition? How much research and development effort are you putting into the transition? How are you planning to integrate renewables into your growth plans? What is your exit strategy from fossil fuels?

These are the sort of questions that Parliament should be putting to all energy companies American, Russian, European and Chinese. Parliament should not be seeking to rake over the past, with unjustified targeting of individual firms. It does no credit to the Parliament and undermines the building of the consensus necessary to deliver the energy transition

Author: profalanriley1

Professor Alan Riley, specialises in energy law, energy security, antitrust and EU law. He is a Senior Fellow at the Institute for Statecraft, London and a Non-Resident Senior Fellow at the Atlantic Council, Washington, DC. He can be contacted at ariley@statecraft.org.uk

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