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Oil And Gas Climate Policies Still Too Hot For The Planet

Oil And Gas Climate Policies Still Too Hot For The Planet

According to a new analysis by the UK research group Carbon Tracker Initiative, thirteen of the top 15 publicly traded oil and gas firms have altered climate targets since May 2021, revealing an industry devoid of standardized policies driven by climate science.

Beyond the precise findings they made on fossil-fuel leaders and laggards, Carbon Tracker’s research has practical relevance. The report’s questions aim to demystify the sector’s — and, by extension, most of the world’s — verbal rush to net-zero carbon targets. These three questions, which form its basic structure, can be applied to any situation:

The “Absolute Impact” study, which debuted in 2020, is a snapshot of a climate-stressed industry unlike any other, because its core product is a major contributor to the worldwide crisis.

“Take, for example, a car manufacturer. We must alter the way cars are powered. But, in the end, we’ll still use automobiles,” said Mike Coffin, Carbon Tracker’s head of oil, gas, and mining. “As the entire energy balance shifts, the oil and gas business will fundamentally decline.”

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Changing investment and usage patterns in the oil and gas business is difficult enough for organizations outside the industry. According to a report released this week by Fossil Free California, even some forward-thinking pension investors are finding it tough to shift. The report accuses funds of exaggerating the expense of divesting from fossil fuels. According to its website, the Science Based Targets program, which validates corporate climate targets based on scientific guidance, is still working on a policy for fossil-fuel businesses and is not presently collecting commitments for the sector.

Scope 3 emissions are particularly relevant for oil and gas businesses, as end-users account for 85 percent of their emissions. “Policy action by governments will be necessary to impact change in Scope 3 GHG emissions in a fair and balanced fashion,” analysts wrote in a BlackRock Inc. analysis this week on climate-related shareholder resolutions. Scope 3 is something that companies cannot address on their own.”

As a result, studies like Carbon Tracker’s are important for recording the best—and worst—of traditional energy corporations’ climate initiatives. The new paper also offers many credibility factors that can be used to distinguish between aggressive and weak ambitions.

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“Look, if you’re going to create goals, make sure they’re realistic,” Coffin added. “Those organizations who set goals—and we’ve seen substantial success in this area over the last three years—companies are improving.”

For the third year in a row, Eni topped the Carbon Tracker list for best climate initiatives. The Italian energy behemoth has vowed to reduce its total emissions by 35 percent by 2030, beyond its prior target of 25 percent, and is also investing in carbon-capture facilities. Only four of the companies on the list claim to be targeting total cost reductions. All of the corporations in North America are lagging behind their European rivals. The rating “confirms the totality of our decarbonization plan,” according to an Eni representative, which focuses on new technology and economic models.

The group identifies three practices that investors should be aware of:

Companies should not “make space” for future fossil-fuel investment by selling polluting assets. According to the research, the International Energy Agency’s mid-century net-zero scenario calls for the end of new oil and gas fields by 2021, no new fossil-fuel boilers by 2025, and no new internal-combustion vehicle sales by 2035.

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They should “not rely disproportionately” on emissions mitigation technology, a wide category developed by Carbon Tracker that includes all types of carbon-capture, direct air capture, forestry, and oceans.

Fast-moving offsets markets are drawing attention and should not be used excessively.

The UN Intergovernmental Panel on Climate Change’s recent report on preventing hazardous warming supports Carbon Tracker’s emphasis on what is covered in firms’ net-zero pledges and the details of approaches to accomplish them.

The rate at which emissions are reduced has a significant impact on how hot the Earth will become. The lower Paris Agreement goal of limiting warming to 1.5°C was all but out of reach, according to the assessment, unless the globe accelerates emissions cuts, which are still rising, so that they peak “at the latest before 2025.”

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