Majors' Lobbying Efforts In Focus

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Western majors are intensely lobbying Brussels and Washington as they seek to influence and shape new legislative packages shaking up the European and US energy landscapes. Companies say they have changed their approach to lobbying in response to investor and social pressure on climate risk and in line with net-zero ambitions. But the spotlight is likely to shine on their lobbying activities ahead of COP28, especially given a renewed focus on upstream production.

Lobbying disclosures indicate the Western majors have targeted a range of issues that will impact them as the global energy sector transitions from fossil-based to essentially zero-carbon sources by mid-century. That includes rules governing methane emissions, oil and gas development on US federal land and waters, and subsidies for carbon capture technology. EU lobbying also dealt with the unprecedented challenge of energy security following Russia’s invasion of Ukraine, prompting emergency adjustments to the “Fit for 55” legislative package. Lobbying will remain intense around landmark bills such as the US Inflation Reduction Act, with the rules covering the 45V tax credit for clean hydrogen a key area to watch.

The majors' declared lobby spend — directly, and indirectly through a sectoral lobby of trade associations, consultancies, law firms and PR agents — was similar in 2022 to the previous year, data from US-based Open Secrets and Belgium-based Lobby Facts show. But details are limited on what companies are actually targeting through funding certain political entities and issues. Moreover, critics suggest there is often a disconnect between the top-line messaging of some companies and trade associations, which outwardly support climate-related policies like carbon pricing or emissions trading, and their responses to consultations. Given that actual expenditure on lobbying is meager relative to the companies’ size, the bang they get for their buck is enormous, research by Columbia Business School suggests.

US Lobbying Focus

US disclosures for 2022 indicate that Chevron, which was among the top lobbying spenders, worked on several issues, including pushing back against US sanctions on Venezuela’s oil sector, according to Open Secrets. Entities tied to Venezuela’s state-owned Petroleos de Venezuela (PDVSA) also lobbied against sanctions. US companies need an operating license from the US Treasury Department to have joint ventures with PDVSA or import oil from Venezuela. The US, which gave Chevron's joint ventures with PDVSA a new license last November, was this month said to be weighing a broadened range of sanctions relief on Venezuela’s oil sector to incentivize Caracas to hold free and fair elections next year. Last year, Washington authorized Spain’s Repsol and Italy’s Eni to resume shipping Venezuelan crude to Europe.

ConocoPhillips, meanwhile, almost doubled its spend on federal lobbying last year to $8.7 million compared to the previous year as the US independent pushed for approval of its contested 180,000 barrels per day Willow development on Alaska’s North Slope. The Biden administration approved the scheme in March, although it did simultaneously block another 16 million acres onshore and offshore Alaska.

Major Oil & Gas Companies: Based on Data from the Senate Office of Public Records as of Jul. 24, 2023
CompanyLobby Costs Financial Year 2022 ($ million)Lobby Costs Financial Year 2021 ($ million)No. LobbyistsTop Three Bills Lobbied 2022
BP$3.94 $4.27 35Coast Guard Authorization Act, IRA, National Defense Authorization Act
Chevron7.106.7538IRA, Clean Energy for America Act, GREEN Act
Exxon Mobil 7.746.8254IRA, Infrastructure Investment and Jobs Act, Department of the Interior, Environment, and Related Agencies Appropriations Act
Eni0.250.101IRA, CHIPS and Science Act, Reconciliation Bill
Equinor1.521.2536IRA, Infrastructure Investment and Jobs Act, Methane Waste Prevention Act
Shell6.867.3439IRA, Coast Guard Authorization Act, Infrastructure Investment and Jobs Act
Repsol0.740.572Not Known
TotalEnergies$0.24$0.265IRA, Residential Solar Opportunity Act, GREEN Act

Brussels Policy Push

It has also been a busy period for energy policy lobbying in the EU as the bloc continues to confront the challenges of energy transition, security and affordability. European majors are strongly supporting sustainable gas projects under new EU taxonomy rules, as well as new LNG import infrastructure which could be operational for decades. That would also mean more methane and CO2 emissions, however, running counter to the bloc’s climate goals.

A report published last month by think tank Influence Map, focused on LNG advocacy in Europe and Africa, analyzed the lobbying activities of 15 European oil and gas and utility companies involved in such projects. All but one firm — E.On — was directly engaged in at least one aspect of lobbying efforts: to promote gas exploration and LNG infrastructure in Africa; support LNG import/transportation in Europe; and weaken EU climate policies that would reduce gas demand across the bloc. Majors Shell, BP and TotalEnergies lobbied on all three issues.

UK-based Influence Map also identified three companies — Eni, France’s Engie and Italy’s Snam — that lobbied against the European Commission’s proposal to include imported fossil fuels in new EU methane emission rules. The rules are being negotiated this year between the Commission and EU member states amid concerns that weaker greenhouse gas scrutiny will prevail. The EU is dependent on imports for over 80% of its fossil gas consumption. Industry associations Eurogas and Gas Infrastructure Europe also did not support measures to include imported fossil fuels, with the Eurogas president stating that such measures would impact energy security. In May, the European Parliament proposed a more ambitious position than both the Commission and the European Council on imported fossil fuels, stating they should be included in the regulations from 2026.

Major Oil & Gas Cos. - EU Transparency Register Data as of Aug. 26 2023
CompanyHead OfficeLobby Costs Financial Year 2022 (€ million)*Lobby Costs Financial Year 2021 (€ millon)European Parliament PassesNo. Full Time LobbyistsNo. Meetings with European CommissionRange Key Lobby Issues 2022-23
BPUK2.25-2.52.25-2.56754Gas market package, Taxonomy, ESG ratings, Corporate Sustainablity Reporting Directive, SAF and electromobility
ChevronUS0.8-0.90.7-0.8245Reducing dependence on Russian gas, exploitation of resources in EEZ of Cyprus, EU energy security strategy incl. platform for common purchase of gas, LNG and hydrogen
Exxon Mobil BelgiumNA3.505649Overview of chemicals industry situation, transition pathway for chemicals industry, REACH revision, impact of solidarity contribution on fossil fuel industry, Critical Raw Materials package
EniItaly1-1.251-1.258471Role of the private sector in COP, ongoing private initiatives on reducing methane emissions, Critical Raw Materials package
EquinorNorway2.5-2.751.5-1.754869EU energy platform, levels of Equinor's gas supply, security of supply risks, energy transition and RePower, including gas diversification, CCUS, hydrogen and renewable power investments
ShellUK5.5-64-4.5612112Decarbonisation of the aviation sector and to support further investments in renewable fuels, International gas markets, hydrogen and CCS, Fit for 55, joint purchasing options
RepsolSpain0.8-0.91-1.252232Russian sanction circumventions, advanced biofuels, renewable hydrogen, Energy transition and markets;
TotalEnergiesFrance2.5-2.752-2.58446Electricity market design reform, hydrogen strategy, Green Deal state of play

Spotlight on COP28

Companies are meanwhile positioning themselves ahead of COP28 climate talks starting in November in the United Arab Emirates. After record attendance by oil lobbyists at COP27 last year, the oil industry will be out in force again in Dubai. But companies will likely be under intense scrutiny from climate campaigners and other stakeholders. “The world cannot afford yet another wasted COP,” BP CEO Bernard Looney stressed in a letter to the Financial Times in June. Addressing criticism over Abu Dhabi National Oil Co. CEO Sultan al-Jaber's role as COP28 president-designate, Looney said it was time "to get behind a country that is — and has been for some time — demonstrating transformational intent.”

Tighter rules this year will require participants at the climate talks to reveal if they are employed directly by the fossil fuel industry or affiliated groups. Observers have said this will prevent a recurrence of last year when Looney attended COP27 as a delegate of Mauritania, where BP has major gas investments.

Deb Kelly is a Corporate Correspondent for Energy Intelligence. A version of this article originally appeared in Energy Intelligence Finance.

Policy and Regulation, Low-Carbon Policy, ESG, Majors
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