A new analysis of fossil fuel production says oil and gas companies are still pumping trillions into new exploration – despite them claiming to be acting sustainably. The analysis concluded that 90% of coal and 60% of oil and gas reserves must stay in the ground to have a chance of keeping global warming below 1.5C. T&E says the fossil fuel producers are pulling the wool over the world’s eyes and will end up with stranded assets as decarbonisation efforts speed up.
The Paris climate accord of 2015 commits the world’s governments to keeping global temperatures to no more than 2°C above 1990 levels by 2100, and ideally 1.5°C. The 1.5 figure has become a firmer target, as that is the point beyond which serious climate impacts are expected to kick in. Yet fossil fuels account for 81% of primary energy demand across the globe and exploration licences continue to be granted, many in areas of delicate ecosystems.
Now thereportAdapt to Survive, the fifth climate analysis by the financial think tank Carbon Tracker Initiative, has concluded that “net zero” is not enough and emissions reductions by the 2030s are vital. It says the world’s largest oil and gas companies are committing themselves to “net zero” emissions, which will not be sufficient to tackle warming.
To have a 50% chance of keeping warming within the 1.5°C limit, the report says 89% of the world’s reserves of coal, 58% of oil and 59% of gas will have to stay in the ground. The numbers are consistent with an International Energy Agencyreport in May which said all fossil fuels currently in the ground must stay there if the world is to achieve net zero by 2050.
T&E’s oil campaign director Erika Bjureby Saldes said: “Fossil fuel companies either don’t get it or they are willfully leading us over the precipice. They back global climate action publicly but in reality they are drilling for more oil and gas. We are either heading for a climate breakdown or the oil companies are going to get their fingers burned.
This report from a team of financial specialists could not be clearer – anyone who invests in fossil fuels is asking for trouble, as the fossil fuel market can only decline, and may do so very quickly. It is therefore in the fossil firms’ interest to wean themselves off yesterday’s fuel. We know decarbonisation can happen – this report makes it clear it must happen without delay.”
The research came up with a model suggesting where limited fossil fuel extraction could still take place within a maximum warming strategy of 1.5°C. It suggests a third of existing easily extractable Middle East oil could still be used, but Canada’s tar sands and Venezuela’s oil should be left in the ground.
One of the report’s authors Mike Coffin said: “It is critical that investors in oil and gas companies are aware of the transition risks. There is a very real risk of assets becoming stranded.” As a result of the modelling, companies risk wasting more than a trillion dollars on projects incompatible with a low-carbon world, with ConocoPhillips, ExxonMobil, Chevron and Shell most exposed. Many of these companies are the target of T&E’s Beyond Oil campaign, which focuses on Europe’s major oil names.
Earlier this month T&E and 15 other NGOs said they will no longer accept invitations to speak at media events on EU policy sponsored by fossil fuel companies.