BP edged out EU green policy in favour of gas

Documents have revealed that oil and gas companies BP, Shell, Statoil and Total worked together to curb EU green policy in favour of gas.

The European commission last year outlawed most subsidies for clean energy from 2017, and ended nationally-binding renewable targets after 2020, despite opposition from environmentalists and clean energy firms.

The policy decisions were however requested by BP, Shell, Statoil and Total, and by trade associations representing a plethora of oil and gas majors.

“It is clear that the fossil fuel companies worked strongly together to get rid of the binding renewable targets and ensure there would be no binding efficiency targets either,” Wendel Trio, the director of Climate Action Network Europe told the Guardian.

In October 2011, the Dutch oil and gas firm Shell first proposed that a sole greenhouse gas target take the place of policies that also supported renewables. Shell argued this would allow gas to cut coal-fired emissions, using the EU’s Emissions Trading System (ETS) as a policy lever.

Papers obtained by the Guardian in an access to documents request show that just four weeks later, BP also asked Barroso to discuss a similar idea with Jean-François Cirelli, the president of its Eurogas trade association.

“Large-scale use of natural gas could secure immediate emissions reductions on an economic basis and Eurogas believes it could be of great shared interest and value to have the opportunity to address the policy framework necessary for such investments,” wrote Howard Chase, the head of BP’s Brussels office.

Gas could make an “indispensable contribution” to the EU’s climate aims, Chase said.

Over the next two years, documents show that Eurogas advocated for an emerging ‘single target’ consensus among oil and gas companies in Brussels meetings, missives and lobby forays.

“Targets for renewable energy sources and energy efficiency would not be beneficial,” Cirelli wrote in one broadside to Barroso in February 2013. “National subsidy schemes for renewable energy sources should converge and gradually be phased out.”

A BP spokesman told the Guardian that the firm believed in tackling climate change with carbon pricing measures, advocated in a joint letter to the UN by five fossil fuel firms in June.

“We believe action should be taken to address climate change and there is a role for oil and gas,” he said. “Using gas to displace coal in power generation is a very important step.” But BP declined to expand on how cutting renewable energy subsidies and targets could help to displace coal or address climate change.

A company statement said due to renewables’ smaller market capacity, “a switch of just 1% of total power generation from coal-fired power plants to gas-fired ones would cut emissions as much as increasing global renewable energy by 11%.”

In 2013, BP’s trade association, Eurogas, was seen as “aligned to the EU climate targets and milestones and aims,” in an internal EU brief written for climate commissioner Connie Hedegaard ahead of her speech to a Eurogas conference.

At the meeting, Hedegaard said that natural gas was the ‘cleanest’ fossil fuel – although it still emitted carbon – and echoed Chase’s description of it as “an indispensable component” in Europe’s energy mix, until the 2030s at least.

Shale gas could brighten the picture further, she argued. “If best practices are used, methane emissions could be even lower than for imported gas,” Hedegaard’s speech said. “That’s why the commission is looking into developing an appropriate framework for [its] production.”

Two days later, the bosses of Europe’s 10 biggest European utilities came together as ‘the Magritte group’ to call for an end to green subsidies and more support for gas.

The CEO’s of 14 other firms, including Total, Dow, BASF and ArcelorMittal wrote a ‘single target’ pitch to Barroso. They said that the cost of renewable energy subsidies “cannot be borne by our companies,” and called for the mobilisation of “indigenous sources of shale gas” instead.

This line was reinforced in letters from the International Association of Oil and Gas Producers (IOGP). Two IOGP members, Shell and Statoil also joined another lobby alliance – the One Target Coalition – with RWE, Fortum, Enel, Areva and ČEZ and made presentations to the commission arguing the same substantive position.

“The fossil fuel lobbyists were very successful – and definitely coordinated,” Trio said. “They had regular meetings among themselves, just like the utilities and energy intensive companies did.”

A failure by the commission to even propose binding renewable targets was “probably due to lobbying by the gas industry,” Trio added.

Sources say that, within the commission, the industry push was aided by architects of the ETS, such as Jos Delbeke, the director-general of the commission’s climate department, who feared overlapping climate policies undermining the EU’s troubled carbon market.

“Delbeke defined the 2030 preparatory materials and structured the impact assessment to make an ETS-only strategy look more attractive than a two-pronged approach with renewables and efficiency targets,” said a source close to the discussions. “He was pushing for the idea of a renewables-gas alliance.”

The idea proved popular in Brussels-based renewable energy associations where several energy firms lobbying for renewable policy curbs had taken boardroom positions in groups such as the European Wind Energy Association (Ewea) and the European Photovoltaic Industry Association (Epia).

“If they were speaking with two tongues – saying one thing to their partners and another to the commission – that shows that there continue to be some quite diverging [boardroom] interests,” one high-placed clean energy industry source said.

By the time of the final 2030 lobby battle, Ewea and Epia were both calling for a toned-down 30% binding renewable energy target, amid talk of a renewables-gas alliance, that has since evaporated.

Gas emits around half as much CO2 as coal, according to the UN’s IPCC scientists, but 10 times more than utility-scale solar, and 45 times more than onshore wind energy.