Big Oil sees Global Warming as a rationalization for environmental regulations to raise prices and prevent new producers from entering the market.
People are often lead to believe that Big Oil is made up of climate change deniers, but that isn’t true. Global warming can be used to justify environmental regulations that limit production and thereby raise prices and discourage competitors from entering the market.
As Senator Carl Levin discovered in 2002 (emphasis added):
An internal BP document from 1999 reflects similar thinking with respect to the Midwest. The document reflects a discussion amongst senior BP executives of possible strategies to increase refining margins, and it mentions “significant opportunities to influence the crude supply/demand balance.” It notes that these “opportunities” can increase Midwestern prices by 1 to 3 cents per gallon.” The memo discusses strategies to reduce the supply of gasoline in the Midwest. It lists some possible options, including: shutting down refining capacity, convincing cities to require reformulated gas that is not readily available, exporting product to Canada, lobbying for environmental regulations that would slow down the movement of gasoline in pipelines, shipping products other than gasoline on pipelines that can carry gasoline, and providing incentives to others not to provide gasoline in Chicago.
That would explain why Big Oil would meet with a global-warming alarmist Pope.
Axios reports, “Exclusive: Pope convenes Big Oil, investors to talk climate change.”
Pope Francis is hosting a gathering next week at the Vatican with executives of major oil producers and investment firms to talk about how the companies can address climate change, according to several people familiar with the event.
Why it matters: It’s one of the most significant developments showing how corporations are working with other world leaders on climate change amid President Trump’s whole-scale retreat on the issue.
Situational awareness: One year ago today, Trump announced his intention to withdraw America from the Paris climate deal, which now has support from every country except the United States. Three years ago, Pope Francis wrote his encyclical — a papal letter sent to all bishops of the Roman Catholic Church — on the importance of addressing climate change, a first in the church’s history.
The big picture: The Pope, BlackRock and big oil companies are increasingly focusing on climate change as cleaner sources of energy have become more competitive, the impacts of a warmer world have become more apparent, and public pressure to address the issue mounts. This meeting reflects this convergence.
The details: The focus of the gathering is […] an emphasis on the energy transition of a “shared home,” according to people familiar with it.
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