Oil companies are fine with destroying the planet, just not like this
Despite initially lobbying for lighter sanctions and loosened regulations, Big Oil firms including BP and Shell are now pulling out of Russia.
Gas and oil companies have decided that while they were mostly fine getting into bed with an authoritarian who regularly threatened and violated the autonomy of neighboring countries, Russian President Vladimir Putin’s invasion of Ukraine was the last straw. Over the weekend, BP and Shell announced they would be cutting ties with Russian energy companies — though not before the industry tried to save itself some pain by pushing for softer sanctions on the invading country.
On Sunday, BP announced that it would be abandoning its significant stake in Rosneft, one of Russia’s state-owned oil and gas companies. BP owns about 20% of the company, which is responsible for nearly half of BP’s total oil and gas production and makes up about one-third of all of its assets, according to Reuters. That’s a big deal, and it’ll cost BP about $25 billion just to get out of the arrangement, which it entered into back in 2013 — though it’s not even clear how the company will accomplish its divestment given Russia has banned foreign investors from selling assets and there are probably not a whole lot of people interested in buying up significant stock in the country’s businesses at the moment.
BP isn’t alone in its decision to pull up the stakes and get out of Russia, either. Shell is also heading for the exit. That company has about $3 billion in assets tied up in Russia through business dealings with oil giant Gazprom, the largest natural gas firm in the world. Shell is also stopping its involvement in building the Nord Stream 2 pipeline, which was set to deliver oil from Russia to Germany but has since been stalled by the German government on account of the fact that Russia invaded a sovereign nation.
But the tune being sung by America’s oil giants was different just weeks earlier, when the lobbying groups that represented the organizations begged the Biden administration to go easy when it placed economic sanctions on Russia. Less than a month ago, oil companies were begging for a “cool down” period to fulfill their contracts in Russia before exiting the country. And just hours before Russia invaded Ukraine, the American Petroleum Institute (which counts among its members BP and Shell) tweeted out a request for the Biden administration to loosen regulations so that more drilling could be done on American soil — because why shouldn’t the oil companies get to benefit a bit from a humanitarian crisis?
The fact is that the U.S. has plenty of oil stored up for a situation like this. The country is sitting on about 600 million barrels of crude oil in its strategic reserve, which can be released by President Biden as he sees fit (though, surprise, the oil companies typically oppose doing that, too, probably because it cuts into their market). Biden announced Tuesday that he’ll release 30 million barrels to stave off concerns about the world experiencing an oil shortage if Russia’s production is halted — though thus far, even the most crippling of sanctions placed on Russia have kept carveouts so that countries can continue to buy oil from the country.
Getting out of bed with Russia is the right thing for oil companies to do. But let’s not pretend like they’re doing it for the right reasons. It simply has become too costly politically to continue doing business there. While these companies get out of the business of exploiting Russia’s land, they’re trying to expand their abilities to drill elsewhere. They’ll do whatever it takes to keep destroying the planet for profit — including feigning to have a conscience.