Last week, Microsoft made a splash when it announced its intention to become a “carbon negative” company—one that pulls more climate-warming carbon dioxide out of the atmosphere than it puts in—by 2030. The news drew widespread attention and praise for the tech giant. Reuters declared Microsoft had “set a new ambition among Fortune 500 companies,” and the UN’s executive secretary of climate change called the move “remarkable.”
A day earlier, the 12th International Conference on Petroleum Technology drew to a close in Dhahran, Saudi Arabia. This year, Microsoft received special billing as the event’s “Digital Transformation Partner,” meaning it hosted all of the online sessions according to the Saudi Gazette. The company also had a booth at the conference, and Omar Saleh, Microsoft’s regional director of energy and manufacturing for the Middle East and Africa, participated in a panel discussion titled “The Role of the Fourth Industrial Revolution in Developing the Oil and Gas Sector.”
The “fourth industrial revolution,” or Industry 4.0, refers to how cloud computing, machine learning, and artificial intelligence are allowing companies to process and analyze vast amounts of data more efficiently and in new ways. Tech giants like Microsoft, Amazon, and Google are currently in a race to unleash Industry 4.0 on the fossil fuel industry—and in doing so, they are helping ensure that oil continues to flow profitably for years to come.
Which raises an obvious question: How can Microsoft hope to pull more carbon out of the air than it puts in if it’s actively accelerating the production of carbon-based fuels?
“To me it’s a complete disconnect,” said Liz Jardim, a senior climate campaigner at Greenpeace. “If they care about the problem of climate change, this work with the oil and gas industry is only making the problem bigger.”
The disconnect is striking because Microsoft’s new climate pledge is, otherwise, pretty impressive. The company’s timeline—which includes shifting to 100 percent renewable energy for its data centers, buildings, and campuses by 2025, and becoming carbon negative by 2030—is in line with what the science says needs to happen to prevent the worst consequences of climate change. To reach net zero and eventually become a carbon negative company, Microsoft has pledged to put $1 billion into so-called negative emissions technologies that pull carbon out of the air. This, too, is significant: Most climate models agree that we’ll need negative emissions tech to bring atmospheric carbon dioxide down to safe levels. The federal government isn’t investing nearly enough in these technologies; Microsoft’s commitment could spur others in the private sector to help fill the gap.
"Microsoft was one of a number of sponsors for the event," Microsoft said in a statement. "Microsoft attends and sponsors a number of events spanning many industries."
The company’s new climate commitment is detailed, too. Unlike Amazon’s recent climate pledge, which only mentioned top-line emission reduction goals, Microsoft gets into the weeds as to how it’ll drive down the direct emissions that come from the fuel its trucks burn and the energy its data centers use—known as scope 1 and 2 emissions—as well as the emissions associated with the use of its products, so-called scope 3 emissions.
“This really is taking the greenhouse gas protocol to heart,” said Shelie Miller, a sustainability researcher and expert on environmental accounting at the University of Michigan. Miller noted that scope 3 emissions are “the hardest piece to tackle and often the largest environmental impact of any company.” Microsoft says it’ll work to reduce its scope 3 emissions, which it estimates account for three quarters of its carbon footprint, with an internal carbon fee.
But Microsoft’s consideration of the knock-on effects of its products and services also brings us to the company’s oil contracts, which threaten to undo a lot of this positive action.
Microsoft’s recent partnership with ExxonMobil has the potential to expand oil production in the Permian basin by up to 50,000 barrels a day. Its recent three-way partnership with oilfield services provider Schlumberger and Chevron aims to “bring [fossil fuel] prospects to development more quickly and with more certainty.” Yet because these are indirect effects of the company’s actions, Microsoft can, if it so chooses, leave them out of its carbon reporting entirely.
“That would definitely be an area of debate,” Miller said when asked if Microsoft should be accounting for the climate impact of its work with Big Oil. “It comes to the question of what’s the environmental impact of an algorithm, and who’s responsible.”
Chris Preist, a professor of sustainability and computer systems at the University of Bristol, added that while companies are not required to consider indirect effects like this in standard emissions reporting, such effects are “likely to be significantly larger than the direct impacts.”
Similarly to Amazon, Microsoft prefers to play up the benefits of its oil and gas partnerships. In last week’s climate announcement, Microsoft president Brad Smith doubled down on continuing to work with “all our customers, including those in the oil and gas business,” in order to help them “achieve the business needs of a net zero carbon future.”
“Continued improvement in standards of living around the world will require more energy, not less,” Smith writes. “It’s imperative that we enable energy companies to transition, including to renewable energy and to the development and use of negative emission technologies like carbon capture and storage and direct air capture.”
But while Microsoft would like the world to believe its oil and gas contracts are about saving the planet, articles published last week in the International Conference on Petroleum Technology’s daily newsletter tell a different story about what the company is selling: Machine learning tools can be used to surveil oil fields; AI that can anticipate maintenance needs in advance to avoid shutdowns; cybersecurity systems can help oil clients keep their big datasets secure. These services make Microsoft “a reliable choice and an enabler for oil and gas companies,” concludes one article, which mentions transitioning off fossil fuels exactly nowhere.
“Supporting Oil and Gas companies to transition to a net-zero world in line with Microsoft’s pledge to 1.5 degrees would be a laudable thing,” Preist said. “Supporting Oil and Gas companies in head in the sand business-as-usual activities would be corporate hypocrisy.”
Update: This article has been updated with comment from Microsoft.