Home' Trinidad and Tobago Guardian : October 22nd 2015 Contents BG22 INTERNATIONAL
BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 22 • 2015
Ten of the world s big oil com-
panies, 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
The public declaration by a group called the
oil and gas climate initiative was an effort to
convince an increasingly sceptical world that
energy companies, whose fossil fuels are a big
source of greenhouse gases, are serious about
delivering cleaner energy and combating climate
But the impact of that statement might be
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 help-
ing to meet the climate challenge. Instead, they
indicated they would await government reg-
ulations 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 November 30 to
December 11 in the French capital.
Robert Dudley, an American who is chief
executive of BP, the oil company based in Lon-
don, expressed optimism on Friday, despite
the lack of participation by companies from
the United States. "I think we can make the
difference," Dudley, who is chairman of the
Oil and Gas Climate Initiative, told reporters
"Almost every company here has large invest-
ments 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 recognising 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
Many experts, including people in the oil
industry, doubt that the goal can be met.
The executives acknowledged that "the exist-
ing trend of the world s net global greenhouse
gas emissions is not consistent with this ambi-
tion." In other words, the world s factories and
vehicles are still pumping out far too much
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 Car-
bon Tracker, a London organisation 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 gov-
ernment," he said.
American giants like Chevron and Exxon-
Mobil are among those that appear to disap-
prove of the European-led initiative, partly
because the potential remedies---like carbon
taxes or the trading of carbon-emission per-
mits---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 Organisation of the Petroleum
Rex W Tillerson, ExxonMobil s chief exec-
utive, has repeatedly said that he would support
putting a price on carbon as long as it was
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 inter-
view on Friday that most of his European col-
leagues 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,"
The other members of the Oil and Gas Cli-
mate 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 includ-
ed a list of ways they said they would collab-
orate to increase energy efficiency and reduce
emissions. Those included cleaning up their
own operations and reducing methane emis-
sions that escape from oil and gas installa-
"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
"We have to shift from coal to gas so there
is an opportunity here," Josu Jon Imaz of Repsol
said on Friday in Paris. NY Times
Oil and gas companies
back UN climate goals
From left, the chiefs of BG Group,
Eni, Pemex, BP, Saudi Aramco,
Total, Statoil and Repsol.
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