President Trump’s decision to pull out of the Paris climate agreement risks exposing oil companies to a tough regulatory backlash from future US administrations, Royal Dutch Shell has warned.
The Anglo-Dutch company has been one of the most outspoken oil industry supporters of the 2015 accord, telling Mr Trump that withdrawal would weaken America’s position globally.
Andy Brown, one of Shell’s most senior executives, said he feared that the decision and a corresponding weakening of emissions reduction efforts could also store up problems for fossil fuel companies in future, triggering “a backlash on regulation against an industry like ours” in a post-Trump era.
Speaking to The Times shortly before Mr Trump confirmed his decision on Thursday night, Mr Brown said: “In a part of the world that is not following the Paris agreement, there is always a risk of a backlash [from] future administrations — a backlash against the practices that may then have become normal in the industry.”
Mr Brown, who heads upstream exploration and production operations, highlighted action to tackle gas leaks from drilling sites as an example. Shell, which has significant US operations, has said it is looking to reduce emissions in this area, recently including it within the criteria for new executive bonus targets.
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Mr Brown suggested the industry could suffer in the long term if other companies were not also pushed to clean up their act. “We want to make sure that in gas production you minimise the amount of methane slip, the amount of methane fugitive emissions.
“We think it’s important that all the industry steps together in improving,” he said. “We are really keen not only to move our business in line with the energy transition but also to work with governments and the industry to move in line with the Paris agreement.”
Failure to do so could strengthen calls for tougher action by subsequent administrations that disagreed with Mr Trump’s stance on climate change, he suggested. “Under the Obama administration there was quite a strong ‘leave it in the ground’ lobby, as an example. We want to make sure we are moving at a considered pace where our industry is able to be part of a future where the Paris agreement is being recognised.”
Shell yesterday reiterated its support for the Paris agreement but said that it respected Mr Trump’s decision and would “continue to work closely with his administration on issues related to energy policy”. It added that it would “continue to take internal actions and convene important conversations” that acknowledged its role in “providing more and cleaner energy”.
BP, which has also spoken in favour of the Paris agreement, said that it hoped “the Trump administration follows through with its intention to find a way for the US to re-enter the accord — or another mechanism for addressing the global climate challenge — rather than to walk away from it entirely”.
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Other business leaders were more outspoken in their condemnation of President Trump’s decision.
Lloyd Blankfein, chief executive of Goldman Sachs, used his first tweet to attack the decision as “a setback for the environment and for the US’s leadership position in the world”.
Elon Musk, Tesla’s chief executive, said that he would withdraw from White House advisory councils in response to the decision. “Climate change is real. Leaving Paris is not good for America or the world,” he said.