No oil and gas giant is complying with the Paris Agreement
Energy — di Valentina Neri
In 2018, oil and gas companies invested 50 billion dollars in projects that are harmful to the climate and to their own investors.
No oil and gas giant is complying with the Paris Agreement
In 2018, oil and gas companies invested 50 billion dollars in projects that are harmful to the climate and to their own investors.
When the historic Paris Agreement on climate was signed, oil and gas multinationals also pledged to play their part in the energy transition. For now, however, it seems like empty words. The damning indictment comes from a new report by the influential British think tank Carbon Tracker Initiative.
50 billion dollars in projects harmful to the climate
Researchers examined 71 different oil and gas companies, including the "big" names known the world over, such as Shell, Exxon Mobil, Gazprom, Total, PetroChina. But how can one tell whether they are genuinely committed to the climate? Simple: by scrutinising all the projects approved in the past year and this year, and distinguishing between those that are consistent with the Paris Agreement and those that are not.
New report: 'Breaking the Habit' contrasts the rhetoric of #ParisAgreement 'alignment' from #oil & #gas companies, vs the reality: $50bn in new project #capex since 2018 which undermines climate goals & threatens shareholder returns carbontracker.org/reports/breaki…
The picture that emerges is unsparing. In 2018, these companies spent 50 billion dollars on new facilities that would make no economic sense in a world that keeps the rise in temperatures "well below" 2 degrees Celsius above pre-industrial levels. A few examples? The 13 billion dollars Shell spent on extracting natural gas in Canada, or the vast deepwater oil field Zinia 2, 150 kilometres off the coast of Angola, on which a consortium comprising BP, Total, Exxon Mobil and Equinor is working. Or, indeed, all oil extraction activities from tar sands.
Against the interests of the planet and investors
The unenviable record belongs to Exxon, which has allocated more than 90 per cent of its potential spending, between now and 2030, to new projects that are not aligned with the Paris targets. But Shell (70 per cent), Total (67 per cent), Chevron (60 per cent), BP (57 per cent) and Italy's Eni (55 per cent) are not far behind.
What is most striking is that these projects do not even make sense on a purely economic level. And their shareholders have already noticed, as demonstrated by the Climate Action 100+ coalition, which brings together 320 investors.
Read also: Climate Action 100+, ultima chiamata per le cento aziende più inquinanti
To honour the commitments made by the international community, demand for fossil fuels will inevitably have to fall. This means that, once up and running, only low-cost facilities will be able to generate profits. All the others will operate at a loss. This is the case with the tar sands project at Aspen (Canada), a 2.6 billion dollar venture backed by ExxonMobil and Imperial Oil, whose timeline has already slipped. According to Carbon Tracker's estimates, for the project to achieve a 15 per cent return, the oil price will need to exceed 80 dollars per barrel. Today it is hovering around 60 dollars per barrel.
If they continue on this path, the report concludes, the big oil companies risk losing up to 2,200 billion dollars by 2030.