Oil and Gas Companies Make Statement in Support of U.N. Climate Goals
LONDON — Ten of the world’s big oilcompanies, mainly from Europe, jointly acknowledged on Friday that their industry must help address global climate change and said that they agreed with the United Nations’ goals of limiting global warming.
The public declaration by a group called the Oil and Gas Climate Initiative was an effort to convince an increasingly skeptical world that energy companies, whose fossil fuels are a big source of greenhouse gases, are serious about delivering cleaner energy and combating climate change.
But the impact of that statement might be limited.
None of the biggest American oil companies signed the declaration or were part of the group. The companies that were involved — including BP, Royal Dutch Shell, Saudi Aramco and Total — made no specific commitments toward helping to meet the climate challenge. Instead, they indicated they would await government regulations to chart the way forward.
Eight of the chief executives in the group discussed its aims at a news conference on Friday in Paris, looking ahead to the United Nations climate conference Nov. 30 to Dec. 11 in the French capital.
Robert Dudley, an American who is chief executive of BP, the oil company based in London, expressed optimism on Friday, despite the lack of participation by companies from the United States. “I think we can make the difference,” Mr. Dudley, who is chairman of the Oil and Gas Climate Initiative, told reporters in Paris. “Almost every company here has large investments in the United States.”
The companies in the oil group said they would support the climate conference’s effort to reach a global climate change agreement at the Paris conference. They specifically cited the United Nations’ target of staving off a rise in the atmospheric temperature of 3.6 degrees Fahrenheit (2 degrees Celsius).
By recognizing that goal, the executives are putting themselves in a tricky position. Meeting that target would require leaving much of the world’s existing oil, gas and coal reserves unburned and would require the companies to make major changes in the way they do business.
Many experts, including people in the oil industry, doubt that the goal can be met.
The executives acknowledged that “the existing trend of the world’s net global greenhouse gas emissions is not consistent with this ambition.” In other words, the world’s factories and vehicles are still pumping out far too much carbon dioxide.
But the executives, who said their companies provided nearly 10 percent of the world’s energy, did not commit to any new limits on their own activities. Instead, they left it up to governments to establish regulations and other measures that would encourage them “to take informed decisions and make effective and sustainable contributions to addressing climate change.”
Neil Beveridge, an oil analyst at Sanford C. Bernstein, said the industry deserved credit at least for acknowledging its role in climate change. “It is a big, big step for such a large number of companies to gather,” he said. “Over the years, a lot of companies have been in denial on this issue.”
But Anthony Hobley, chief executive of Carbon Tracker, a London organization that advises on the risks of investing in energy companies, noted the limits of Friday’s statement. “There was no commitment to get out ahead of government,” he said.
American giants like Chevron and ExxonMobil are among those that appear to disapprove of the European-led initiative, partly because the potential remedies — like carbon taxes or the trading of carbon-emission permits — that many experts say are necessary to curb greenhouse gases would almost inevitably raise the price of their fuels.
“I’ve never had a customer come to me and ask to pay a higher price for oil, gas or other products,” John S. Watson, the chief executive of Chevron, told a meeting hosted in June in Vienna by the Organization of the Petroleum Exporting Countries.
Rex W. Tillerson, ExxonMobil’s chief executive, has repeatedly said that he would support putting a price on carbon as long as it was “revenue neutral.”
An explicit call for putting a high price on carbon emissions was deliberately omitted from Friday’s declaration. Claudio Descalzi, chief executive of the Italian oil company Eni, and a participant in the group, said in an interview on Friday that most of his European colleagues agreed that some form of carbon levy would eventually be essential.
“Carbon pricing is the only way to have a reasonable energy mix” to sustain the 3.6-degree ceiling, he said. But he said Friday’s declaration used less-specific language to bring some of the international companies on board. “Now we are trying to create a consensus,” he said.
The other members of the Oil and Gas Climate Initiative are Statoil of Norway; Repsol of Spain; the Mexican company Pemex; the Indian company Reliance Industries; and the BG Group of Britain.
The United Nations goal of limiting global warming to about 3.6 degrees is based on a comparison to temperatures in the preindustrial 19th century. That level of warming, although potentially producing dire effects on agriculture, sea level and the natural world, could stave off the most severe impacts of drought, food and water shortages, and widespread flooding — events that could profoundly harm the world’s population and economy.
But to achieve that limit would require severe reductions in carbon emissions by 2050.
The companies’ statement on Friday included a list of ways they said they would collaborate to increase energy efficiency and reduce emissions. Those included cleaning up their own operations and reducing methane emissions that escape from oil and gas installations.
“Technologies can deliver the solutions for the future,” Patrick Pouyanné, Total’s chief executive, said in Paris on Friday. “On this climate change, we prefer to collaborate rather than to compete.”
The companies also said they would work with automakers and consumers to improve vehicle fuel economy. Big on the companies’ agenda, too, are efforts to give natural gas a bigger share of the global energy mix.
Of the group, Shell and Total in particular have invested heavily in natural-gas-related businesses in recent years. They portray natural gas as a fossil fuel that produces fewer carbon emissions than oil — and much less than coal, which is dirtier and often cheaper than natural gas.
“We have to shift from coal to gas so there is an opportunity here,” Josu Jon Imaz of Repsol said on Friday in Paris.
Information taken from: www.nytimes.com