Threatened by Renewable Energy, Fossil Fuel Companies Highlight Their Role in Alleviating Poverty

With environment envoys from almost 200 countries gathered in Lima to negotiate greenhouse-gas limits, Exxon this week urged governments to heed what it called “this imperative of human progress” when designing climate rules. The chief executive officer of Peabody, the largest U.S. coal producer, was more direct in September, arguing it would be “misguided and anti-poor” to spurn fossil fuels.

“They’ve decided they can be on the side of the angels and still sell a lot of oil and gas,” said Michael Lynch, the president of Winchester, Massachusetts-based Strategic Energy Economic Research. “They’re finding that they can say, ‘This is what’s going to happen, but it’s not all immoral and ugly.’”

Exxon spent years denying the existence of human-made climate change altogether before saying people could adapt to warmer temperatures. Lining up with the bootstrappers of the developing world and calling for a balanced approach is a more subtle stance. It’s also one that may divide governments seeking agreement on how to avert climate change.

Stumbling Block

Tensions between industrialized nations and developing countries have long been a stumbling block in global climate talks. Greenhouse-gas emissions, widely attributed to the burning of fossil fuels, reached an all-time high in 2013 — a record linked directly to rising prosperity in the developing world and all the cars, consumer goods and electricity consumption that accompanies it.

Another point of conflict is that the worst effects of climate change risk are hurting most those who have the least. Crop-ravaging droughts in sub-Saharan Africa, for example, can spark food shortages and civil unrest. Among the countries that face “extreme risks” from climate change, according to the U.K. researcher Maplecroft, are Bangladesh, Sudan, Burundi and Afghanistan.

“The living conditions of the economic and the energy impoverished are startling,” Peabody CEO Greg Boyce said in an interview in October. “I’m not saying that, you know, we’ve got to forget about CO2, that’s never been our starting point. But we are saying that, poverty is the number one human and environmental issue we have today.”

“The best way to reduce carbon and further human development is to accelerate use of today’s advanced coal technologies,” Chris Curran, a Peabody spokesman, said in an e- mail.

A Tough Job

Defending fossil fuels and the billions that flow from them as scientists warn of looming, irreversible damage to the environment has never been easy, and the job is getting harder as governments from Beijing to Washington accept that energy policies need to change.

Resource companies “cannot afford to go on putting their heads in the sand,” said Helen Westropp, global business director at London branding agency Coley Porter Bell. “They could face such a backlash if they’re not careful, not just from customers but from shareholders and governments.”

Previous attempts downplayed the effects, or even the reality, of climate change. Exxon Chief Executive Officer Rex Tillerson, for example, in 2012 described global warming as “an engineering problem” to which humans would adapt. His predecessor, Lee Raymond, denied climate change existed.

Emerging Economies

“People need to understand the critical role of energy in both developed and emerging economies,” Exxon spokesman Alan Jeffers said.

Tillerson’s current approach is mirrored by rival Chevron, whose CEO John Watson in October said he expects almost one-third of the world’s population to switch from burning dung and wood to fossil fuels as they move toward the middle class over the next two decades. Other alternatives would not be affordable, he said. A Chevron spokesman declined to comment beyond Watson’ remarks.

Meanwhile Glencore, the world’s biggest exporter of coal to the power industry, says in its position statement on carbon that climate policy must “balance the social and economic aspirations” of the developing world. Glencore also declined to comment.

Electric Cars

While development is closely linked to increased energy usage, economists, energy experts and environmentalists disagree about whether clean energy alternatives might provide a more climate-friendly route to prosperity. Despite advances in renewable energy and a small but growing fleet of electric cars, large-scale electrification still usually means coal or gas- fired power plants, and mobility depends on the internal combustion engine, just as it did for Europe and North America.

Eighty percent of global energy comes from fossil fuels now, according to the Paris-based International Energy Agency. Demand is set to rise by a quarter through 2030, with most of the increase coming from developing economies.