It’s been a blockbuster summer for Big Oil. ExxonMobil and Chevron posted record profits thanks to surging energy prices. The new US climate bill includes concessions to oil and gas companies.
There are other, quieter beneficiaries: Microsoft, Amazon, and the other cloud-services companies that are increasingly responsible for the computing horsepower behind the oil giants’ efforts to find and extract more oil and natural gas.
Among other things, Microsoft is making it possible for Exxon to analyze reams of oilfield data. Amazon is helping drillers run simulations to maximize how much oil they can pump from existing wells.
It’s an awkward look for companies that have pledged to cut their own emissions. Microsoft has vowed to remove more carbon from the atmosphere than it emits by 2030, while Amazon has committed to eliminating greenhouse gases from its operations by 2040.
Both companies justify their oil industry contracts by pledging to accelerate a transition from dirty oil to sources that emit little or no carbon dioxide. And each is quick to provide examples of how they’re helping the oil industry move to a greener future. Microsoft and Chevron are working on a project to convert agricultural waste into fuel; Amazon Web Services software helps Marathon Oil identify and stamp out methane leaks. At the same time, Microsoft and Amazon say making oil companies more efficient is part of their sustainability work, helping their clients avoid unnecessary emissions, including those associated with antiquated data centers and older, error-prone software.
But neither company provided evidence that these projects are succeeding or that they offset the environmental damage caused by increased oil and gas production from their biggest clients. AWS energy sales chief Arno van den Haak said his company is helping oil industry customers meet emissions reduction targets but didn’t have any figures to back up that assertion. “There’s not a single solution or a single goal,” he said. A Microsoft spokesperson said the company doesn’t have access to customer data but that energy partners have “shared some achievements that we’ve been proud to have taken part in.”
Such pronouncements infuriate critics who say the cloud providers’ oil industry contracts are prolonging the fossil-fuel age, tarnishing their green credentials and risking climate catastrophe. David Carter, an engineer who quit Microsoft last year partly because the company continued to work with the oil industry, argues that “if you do anything more efficiently, it gets done more.” Rob Day, a co-founder of Spring Lane Capital, a sustainability focused private-equity firm, credits the cloud providers for massive investments in solar and wind projects to power their operations. “On the flip side,” he said, “it’s not good enough. They’re making oil and gas drilling operations more profitable. Full stop.”
The criticism hasn’t prompted Microsoft and Amazon to pull back from the oil sector, but Alphabet’s Google, the third-ranked cloud player, seems to have been slowed down by employee activism.