The Largest Oil Companies Make a Pledge to Climate Change

The Largest Oil Companies Make a Pledge to Climate Change
By Dorothy Neufeld | December 06, 2015
In October 2015 ten of the largest oil companies signed an agreement addressing climate change, anticipating the 2015 United Nations Climate Change Conference (COP 21) currently taking place in Paris. The pledge supports policies in keeping the global temperature below an increase of 2 degrees Celsius. Some response was cautiously optimistic, while other critics debated the feasibility of its goals. The ten signatories include BG Group, BP, Eni, Pemex, Reliance Industries Ltd., Repsol SA, Saudi Aramco, Shell, Statoil and Total.
The joint statement came six weeks before the summit, which is hosting delegates from 209 countries. The conference's focus is on reducing the production of greenhouse gases caused by the burning of fossil fuels. (For more, see: The 5 Countries that Produce the Most Carbon Dioxide (CO2).
Climate Agreement
The pledge suggests a number of ways the ten companies will cut the production of greenhouse gases. These measures include reducing the flaring of methane gas, a practice that is a major producer of carbon dioxide in the atmosphere. According to a report by the Rhodium Group, oil and gas companies released 3.6 trillion cubic feet of natural gas into the air in 2012. A large percentage of this natural gas was from methane leakage. This represents approximately $30 billion of potential revenue lost, annually, for oil and gas companies. The pledge supports development of “cleaner” energy alternatives including establishing carbon capture and storage systems. Carbon capture is the process of taking carbon that is about to be released into the air and storing it in some fashion, usually underground. It is fair to say that, to date, many carbon capture attempts have not materialized. Carbon capture presents an expensive solution. Patrick Pouyanné, chief executive of Total said, “We are looking to have co-operation, for example, in research and development. [Carbon capture and storage] is one topic where we need to engage seriously ... it’s one area where we could join forces, but there are other topics that we are discussing between us, so you will see more concrete proposals.” According to the International Energy Agency (IEA), the first large-scale carbon capture system was launched just this year in Alberta, Canada to curb emissions from oil sands.
Divestment
Over the past year and a half, energy companies have been targeted by a global campaign to divest their shares in coal companies. Some leading activist investors include Stanford University’s board of trustees, as well as the heirs to the $860 million Rockefeller Standard Oil fund. Those that have come together to divest in oil companies, both individuals and institutions, amount to $50 bn USD of investment. (For more, see: Is Divestment Killing the Coal Industry?).
Some environmental groups are criticizing these oil companies for trying to improve their image specificially for the UN conference. These environmental groups argue that major oil companies spend substantial effort in lobbying against improved climate policy through their trade associations, while publicly vocalizing support for the goal of reducing emissions.
Influence on Climate Policy
InfluenceMap has released a new report with over 10,000 pieces of evidence that show how corporations are influencing climate policy. The report suggests that oil companies often use trade associations to bolster support against climate change. Their report indicates, for example, that Shell rates the highest among those analyzed on how actively it responds to climate change in public, while at the same time opposing these objectives through trade associations. InfluenceMap states Shell shows the highest "misalignment" factor of the companies researched. Shell has vocalized support of climate change with Barack Obama in the Clean Power Act in 2014. The report shows that Shell has executives on powerful trade bodies that in turn, tried to dismantle these exact efforts. BP has also openly criticized climate change initiatives in the past. One BP executive said that in the EU there were “too many targets for renewables , for efficiency and for GHGs.” A Total executive is on the board of the American Chemistry Council, which has stated, “Aggressive reduction targets that the EPA has proposed will cause significant and irreparable harm..” Meanwhile, BP and Total express a supportive and progressive message towards climate change policy in the media and on their websites.
The Bottom Line
Large oil companies have signed a joint agreement in climate policy change for purposes of the current United Nations climate summit, although many details in the agreement are unsubstantiated. The issue remains complicated, with many oil companies trying to exert influence through both public announcements and powerful trade groups. Meanwhile at the conference, developed countries sustain ongoing criticism for their lack of effective commitment to substantive change. The COP 21 agenda includes speakers from many multinational corporations, and the impact of policy statements from Big Oil has yet to be fully ascertained.
Read more: The Largest Oil Companies Make a Pledge to Climate Change http://www.investopedia.com/articles/active-trading/120615/largest-oil-companies-make-pledge-climate-change.asp#ixzz3tq4LJEOm
Follow us: Investopedia on Facebook
Post a Comment

Popular posts from this blog

eComTechnology payment processing guidelines

Proposed Contaminated Fill site at Shawnigan