This opinion was written by David Olive and was published in the Toronto Star on August 24, 2023.

Once upon a time, Big Oil pledged to reduce its fossil fuel production, slash its greenhouse gas emissions (GHG), and invest more in clean renewable energy and less in oil and gas.

Big Oil, including Calgary’s Suncor Energy Inc., the largest Canadian oil firm, also committed to achieving net-zero emissions by 2050.

That was in the late 2010s, when slumping oil prices prompted Big Oil to invest in what it expected to be lucrative clean-energy alternatives like wind and solar power, biofuels, and batteries.

Companies also hoped with its voluntary action in the fight against climate change it could avoid government regulations forcing it to reduce its carbon footprint.

But that time has passed. For Big Oil, playing a growing part in the energy transition is now out. Profit maximization from fossil fuels is back in.

“Today, we win by creating value through our large integrated asset base underpinned by oilsands,” Rich Kruger, Suncor’s new CEO, told stock market analysts last week.

Translation: Suncor “wins” by increasing production from its Athabasca oilsands, the world’s dirtiest source of crude. Suncor’s goal now

is to return bigger profits to shareholders with higher dividends and more stock buybacks.

That’s what the market wanted to hear. In the two days following Kruger’s back-to-basics vow, Suncor shares jumped almost seven per cent in value.

Kruger asserted that before he took the helm at Suncor last spring the firm was putting a “disproportionate emphasis on the longerterm energy transition” — that is, on getting with the world’s green program.

Suncor’s return to its oil roots is widely evident elsewhere in the global oilpatch.

ExxonMobil Corp. was rewarded last year for its well-known lack of enthusiasm for alternative energy. It posted a record $56-billion (U.S.) profit in 2022 on the back of surging oil prices.

“We leaned in (to traditional oil and gas) when others leaned out, bucking conventional wisdom,” Exxon’s CEO, Darren Woods, bragged in an investor call.

BP PLC has retreated from an earlier goal of cutting its GHG emissions by 35 per cent by 2030. The company now aims for a 20- to 30per cent reduction in that time. Meanwhile, it is ramping up its gas drilling program.

Shell PLC has scrapped a previous plan to gradually reduce its fossil fuel output each year.

Shell once planned to become the world’s biggest electric power producer, mostly with offshore wind farms.

But today, Shell no longer has a target for achieving that goal. It has cancelled planned increases in renewable energy investments, and dumped renewable energy projects with no short-term profit potential.

Meanwhile, “the energy system of today continues to desperately need oil and gas,” says Wael Sawan, Shell’s CEO. He adds that it would be “dangerous and irresponsible” for Big Oil distract itself from energy security.

And governments that have long pushed for decarbonization are now inclined to agree, after the energy crisis caused by Russia’s invasion of Ukraine.

Canada and the U.S. are subsidizing Big Oil’s untested carbon capture technology, which would enable Big Oil to increase production by sequestering GHG emissions.

Canada is poised to increase its oil and gas production by close to one billion barrels of oil equivalent in the lifespan of projects that have been approved or are underway, according to a leading industry analyst at Rystad Energy.

That’s a bigger increase than Rystad estimates for major oil producers Iran, Iraq, Russia, Mexico and Libya.

Back in the fairy tale period, it was possible to imagine that Big Oil, with its immense capital resources and energy expertise, could play a major role in the fight against climate change.

But the companies discovered that it lacked expertise in managing its alternative energy assets, many of which have lost money.

The cost of steel turbines used in wind power has increased by about 20 per cent since 2019. And the cost of solar installations jumped by about 14 per cent between 2021 and 2022.

In the meantime, the world oil price recovered, boosting Big Oil profits to record levels last year. That rapid surge in profits is a sharp contrast with the long-term payoff from renewable energy investments.

And the world is indeed consuming record amounts of oil, for reasons described earlier in this space.

Finally, Big Oil firms like Suncor and Shell have been under pressure from activist investors demanding that they refocus on oil and gas.

Were we gaslit (pardon the pun) when BP rechristened itself “Beyond Petroleum,” and its Big Oil peers followed with high-profile investments in alternative energy?

Or is Big Oil simply incapable of transitioning and is doing the responsible thing in ensuring security of supply for a world economy still more than 80 per cent reliant on fossil fuels for energy?

It’s some of both, of course. What is certain is that skeptics who believed Big Oil could not truly embrace decarbonization have been vindicated.

Is Big Oil simply incapable of transitioning and is doing the responsible thing in ensuring security of supply for a world economy still more than 80 per cent reliant on fossil fuels for energy?