LE BOURGET, France -- Oil and coal companies have been an easy target for activists descending on global climate negotiations this week. To nobody's surprise, wiping out billions of dollars in future fossil fuel profits is a central theme here.
But oil and coal interests come to this airfield outside of Paris facing particularly tough times. Both industries already have seen their profits decimated in the year leading to the 21st meeting of the U.N. Conference of the Parties, or COP 21, where 196 nations are negotiating an agreement aimed at putting the world on a path toward a 2-degree-Celsius temperature increase, a target that's meant to avert the worst outcomes of global warming.
Multinational oil companies and oil-producing nations flush with cash just a few years ago are now buffeted by $40-a-barrel oil prices. Coal companies and electric utilities that burn a lot of coal -- virtually nonexistent players on the sidelines of the conference -- are struggling in some cases to stay in business as their corporate shares reflect declining demand and rising costs.
In the run-up to Paris, the focus in the United States also turned to politics and legal challenges over the industries' handling of climate science. New York Attorney General Eric Schneiderman (D) said in November that he was investigating whether Exxon Mobil Corp. misinformed investors about the business risks tied to climate change and government policies targeting carbon emissions.
A few days later, after a two-year investigation, Schneiderman said he had inked an agreement with Peabody Energy Corp., the largest publicly traded coal company, to disclose more about the risks facing its business.
"This is a financial issue with unknown proportions. We have to look at it and act on it," said Mindy Lubber, the president of Ceres, a Boston-based network of investors pressing for more corporate disclosure.
Lubber points to the shift in investment away from building more coal-fired power plants to renewable power and the shift away from costly exploration of oil in remote parts of the world.
One big piece of the puzzle, she told a panel shortly after former Vice President Al Gore made his perennial appearance before activists here, is the corporate show of force at the Paris summit.
On Monday, Microsoft co-founder Bill Gates joined President Obama, Indian Prime Minister Narendra Modi and other heads of state to announce a multibillion-dollar public-private partnership to advance breakthrough energy technology.
"The financial and corporate leadership are here in strength saying we need to act on climate, we need a price on carbon, and we need to move sooner rather than later. This wasn't the case in Copenhagen," Lubber said, referring to the last major climate summit in Denmark in 2009.
"The message has changed, the messengers have changed, the arguments are stronger," she said.
Oil's continental split
Still, as you drill into the way oil companies are handling the future, it gets more complicated. To some degree, it splits along U.S. and European lines. In other ways, a look at portfolio choices in recent years suggests oil is no longer dominating capital spending and longer-term investment. Natural gas -- through liquefied natural gas projects and onshore shale development -- is taking the place of some of that oil in the oil industry's portfolio.
In the United States and to some extent in China, the market for natural gas as a fuel that can replace coal at power plants is expanding. Yet in the 2-degree-Celsius world, natural gas is still a major carbon emitter.
Methane, a potent short-term contributor to warming, leaks into the atmosphere when gas is produced and piped. And while it burns cleaner than coal, gas doesn't survive forever as a source of electricity if world leaders decide that "decarbonizing" the economy by 2100 is necessary to keep global warming from drowning island nations and causing severe flooding in South Asia and along the U.S. coast.
Six European multinational oil companies, including France's Total SA, Royal Dutch Shell PLC and Norway's Statoil ASA, this spring urged countries to apply a cost to carbon emissions. That would put energy companies on the same playing field as the climate gets warmer and regulations ratchet up the need for cleaner energy sources.
That has not been the position of most U.S.-based oil companies. Exxon Mobil CEO Rex Tillerson has said his company would promote a carbon tax only if U.S. policymakers came around to the idea first. That's unlikely to happen in Washington, D.C.
"I don't see Chevron and Exxon saying they're going to change their strategy," said Amy Myers Jaffe, director of the energy and sustainability program at the University of California, Davis' Graduate School of Management. "Are they not changing their strategy because they have a bullish view of oil demand over the next 20 years?"
One of the exceptions is ConocoPhillips, which has quietly gone about scaling back its most costly investments in oil, based in part, according to sources, on the risks tied to long-term oil megaprojects in a more carbon-constrained world.
But so far here at the summit, Total, the Paris-based oil giant, has been the only prominent oil industry voice. Yesterday, it doubled down on support for putting a price on carbon emissions, either through a tax or national regulations.
"It is a way that is technically neutral, which means we can orderly and profitably do this," Gérard Moutet, Total's vice president for climate-energy, told EnergyWire.
"Some people don't understand why we are working for that," Moutet said. "They say you are working for something that would hurt you. We see this as the more orderly manner and the more efficient manner for other people, not only for the industry."
Total's portfolio is about 50 percent natural gas at this point, he said. Moutet also boasted about the company's majority stake in SunPower Corp., a Silicon Valley-based solar company that competes with SolarCity and SunEdison Inc.