Oil bosses fight for relevance before climate talks

Source: BY RON BOUSSO AND BATE FELIX, Reuters • Posted: Friday, October 16, 2015

Oil and gas industry leaders on Friday launched a final charm offensive to highlight the sector’s relevance in the global fight against climate change before a key summit in Paris later this year.

In an unprecedented show of unity, the bosses of Europe’s top oil companies will be joined at a press conference by the heads of the national oil companies of Saudi Arabia and Mexico, who will lend their support to the initiative.

The leaders of 10 gas and oil companies issued a statement calling for an “effective” agreement at the United Nations climate change summit in December, recognizing that current greenhouse emissions were inconsistent with the goal of limiting global warming to 2 degrees.

The companies vowed to collaborate to limit gas flaring from refineries but stopped short of outlining clear goals to limit emissions, which critics have called for.

The joint stance at a time when all companies are struggling with a sharp drop in oil prices also highlights a deep rift with U.S. oil companies such as Exxon Mobil and Chevron, who stayed away from the initiative.

The chief executives of Total, Britain’s BP and BG Group, Italy’s Eni, Norway’s Statoil, Spain’s Repsol, Saudi Aramco and Pemex will again call for a global pricing system on carbon, which they say will give an economic incentive for the private sector to use cleaner sources of energy and to develop new technologies such as carbon capture and storage (CCS).

They will again urge governments to ditch coal in favor of less polluting natural gas in power plants and heavy industry.

For many of the companies, this is a fight for the future of the oil and gas sector in the public debate as a rising number of organizations and politicians call to minimize the use of fossil fuels in favor of renewable energy such as wind and solar power while seeking to ostracize oil companies among investors.

“Sometimes in all these discussions you have the impression that all fossil fuels are the bad guys. But the bad guys are part of the solution,” Total’s CEO Patrick Pouyanne told a gas and electricity summit in Paris on Thursday.

“Whatever people think, we still need fossil fuels. We need to make advocacy for gas. We need to explain to our policy makers that gas has to be encouraged,” Pouyanne said.

“Policy makers are not convinced in many countries that gas is part of the solution for climate change, we in the industry need to speak up.”

The meeting comes shortly before diplomats gather in Bonn from Monday for the last formal session ahead of the Paris climate talks, where negotiators from almost 200 nations will meet to try to forge a global climate change agreement, designed to curb rising greenhouse gas emissions.

The International Energy Agency forecasts oil will remain the largest energy source by 2040, although its share will decline while renewable sources of energy will grow.

All major emitting countries have now submitted plans to the United Nations detailing how much they plan to curb their emissions.

Many members of the Organization of the Petroleum Exporting Countries (OPEC), including leader Saudi Arabia, have yet to submit their plans.

For oil executives, pledges by key oil consuming countries including China and India to cut fossil fuel consumption have crystallized their need to act.

The World Bank estimates around 300 million tones of carbon dioxide (CO2) is emitted from gas flaring each year, equivalent to around 77 million cars.

Total, Statoil, Shell, Eni and BG are already signed up to a U.N. initiative to stop routine gas flaring by 2030.

Critics say however that without clear goals to cut their emissions, oil companies’ efforts would have little impact.

“To determine whether or not this is just greenwash … you need to look for whether or not the initiative announces concrete, quantitative and measurable targets designed to make the oil and gas industry part of the solution,” said Anthony Hobley, chief executive of environmental think tank the Carbon Tracker Initiative.