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Oil and Gas Sector’s New Climate Policies Still
Overheat the Planet: Report
Eni took the top spot for best climate policies for the
third straight year in Carbon Tracker Initiative’s analysis.
Offshore oil well platforms in the Gulf of Mexico off
Port Fourchon, Louisiana in April 2021.
Photographer: Luke Sharrett/Bloomberg
By
Eric Roston May 11, 2022
In this article
CL1
WTI Crude
106.81
USD/bbl.
+1.10+1.04%
ENI
ENI SPA
13.36
EUR
-0.26-1.89%
BLK
BLACKROCK INC
598.97
USD
-1.39-0.23%
52,000
Million metric tons of greenhouse emissions, most recent annual data
-3.39%
Today's arctic ice area vs. historic average
+0.84° C
Dec. 2021 increase in global temperature vs. 1900s average
65%
Carbon-free net power in Germany, most recent data
Soccer pitches of forest lost this hour, most recent
data
Jaipur, India
Most polluted air today, in sensor range
$69.9B
Renewable power investment worldwide in Q2 2020
Parts per million CO2 in
the atmosphere
Thirteen of the biggest 15 publicly traded oil-and-gas companies have
revised climate targets since May 2021, and together they reveal an
industry utterly without standardized policies shaped by climate
science, according to a new
analysis by the UK research nonprofit Carbon
Tracker Initiative.
Carbon Tracker's approach has practical
value beyond the specific conclusions they reached about
fossil-fuel leaders and laggards. The questions that shape the report
seek to clarify the sector's—and by extension much of the world's— rhetorical
dash toward net-zero emissions commitments. These three
questions, which make up their basic framework, are widely applicable:
·
Are
life-cycle or " Scope
3" emissions included in the targets?
·
Are
there interim targets before mid-century that require absolute cuts to
pollution rates?
·
Are
they including emissions related to equity stakes in others’ projects
and crude they
purchase from another company?
The
“Absolute Impact” report, which first launched in 2020, is a snapshot
of an industry under climate pressure like few others, since its
fundamental product is a major cause of the global problem.
“Take
a car manufacturer. We need to change how cars are powered. But
ultimately, we're still going to use cars,” said Mike Coffin, head of
oil, gas and mining at Carbon Tracker. “With the oil and gas industry,
as the entire energy mix changes, the whole industry is going to
fundamentally shrink.”
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Changing patterns of investment and use around oil and gas is
difficult enough for institutions outside the sector. Even some
forward-looking pension investors are finding it difficult to change,
according to an analysis this week by Fossil
Free California that charges funds with inflating the cost
of divesting from fossil fuels. The Science Based Targets
initiative, a group that validates corporate climate goals that are in
line with scientific guidance, is still developing a policy
for fossil-fuel companies and for the time being isn't
currently accepting commitments for the sector, according to its
website.
Scope
3 emissions are particularly important for oil-and-gas companies,
because 85% of their emissions come from end-users. In a BlackRock
Inc. commentary this week on climate-related shareholder
proposals, analysts noted that “To effect change in Scope 3 GHG
emissions in a fair and balanced way, policy action by governments
will be necessary. Companies cannot solve Scope 3 on their own.”
That
makes analyses like Carbon Tracker's useful for documenting the
best—and worst—kinds of climate policies among traditional energy
companies. The new report further identifies several credibility
criteria to help separate aggressive from weak goals.
“Look, if you set targets, make sure they’re appropriate,” Coffin
said. “For those companies that are setting targets—and we have seen a
significant progress over the past three years on this—companies are
improving.”
What on Earth?
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news, zero-emission tech and green finance.
Eni SpA took the top spot for best climate policies for the
third straight year in the Carbon Tracker ranking. The Italian energy
giant has pledged to cut its absolute
level of emissions 35% by 2030, which is more ambitious
than its previously stated goal of 25%, and it’s also investing in
carbon-capture facilities. Only four of the companies on the list say
they are pursuing absolute cuts. All of the North American companies
are trailing their European counterparts. An Eni spokesperson said the
ranking “confirms the completeness of our decarbonization
strategy” that focuses on new technologies and business models.
The
group highlights three practices that investors might consider as red
flags:
· Companies
shouldn't sell off polluting assets just to “create space” for new
fossil-fuel investment. The report points to the International
Energy Agency's mid-century net-zero scenario, which calls
for an end to new oil and gas fields as of 2021, no new fossil-fuel
boilers by 2025 and an end to new internal-combustion car sales by
2035.
· They
should “not rely unduly” on what Carbon Tracker calls emissions
mitigation technologies, a broad category they created to include all
kinds of carbon-capture,
direct air capture, forestry and oceans.
· Fast-moving offsets
markets are attracting scrutiny and shouldn't be over-used.
Carbon Tracker's emphasis on what’s covered in companies’ net-zero
pledges and the details of pathways to achieve them is supported by
the UN Intergovernmental
Panel on Climate Change’s recent report on preventing
dangerous warming.
The
rate at which emissions fall is an extremely influential factor in
determining how hot the Earth will become. The report concluded that
the lower Paris Agreement goal of limiting warming to 1.5°C was all
but out-of-reach, unless the world accelerates cuts to emissions—which
are still rising—so they peak “at the latest before 2025.”
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confidential tip for our reporters?
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