Oil and Gas Companies Make Statement in Support of U.N. Climate Goals

eucarbon-web1-facebookJumbo LONDON — Ten of the world’s big oil companies, mainly from Europe, on Friday jointly acknowledged their industry’s role in global climate change and said that they agreed with the United Nations’ goals of limiting global warming. The point, in a public declaration, was to try convincing an increasingly skeptical world that the oil 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 took part. And the companies that were involved — including BP, Royal Dutch Shell, Saudi Aramco and Total — made no specific commitments to helping meet the climate challenge. The group, the Oil and Gas Climate Initiative, also held a news conference on Friday in Paris, looking ahead to the United Nations climate conference that will open there on Nov. 30 and run through Dec. 11. The companies declared their collective support for an effective global climate change agreement to be reached at the Paris conference, and 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 force 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. However, 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 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-based 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 have declined to join the group. The American companies 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 successfully 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 Vienna in June 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 tax 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 United Nations goal of limiting global warming to about 3.6 degrees is based on a comparison to climatic 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 drastic reductions in carbon emissions by 2050. Source