The world’s largest listed oil and gas firms have sanctioned projects which are non-compliant with the Paris Climate Agreement targets, says a report.
In 2018 major oil and gas companies invested $50bn on projects which fail the Paris alignment test “by a margin”.
The report, by think tank Carbon Tracker, found that no major oil companies were investing to support a target of keeping global warming “well below” 2C, or pursuing efforts to limit it to a maximum of 1.5C.
Firms such as ExxonMobil, Chevron, Shell and BP spent at least 30% of their investment last year on projects that are “inconsistent with a 1.6C world”, it said.
Carbon Tracker warned these investments may not be “economically rational” and may not be viable if governments implement the Paris agreement.
It highlighted major energy projects such as Shell’s $13bn LNG Canada project and a $1.3bn deepwater project by BP, Total, ExxonMobil and Equinor in Angola that will be “deep out of the money in a low-carbon world”.
Andrew Grant, senior analyst at Carbon Tracker and report author, said: “Every oil major is betting heavily against a 1.5C world and investing in projects that are contrary to the Paris goals. Investors should challenge companies’ spending on new fossil fuel production.”
Meanwhile, trade body Oil & Gas UK (OGUK) has outlined actions to ensure the supply chain achieves zero emissions by 2035.
In its Economic Outlook 2019 report, OGUK shared its “Roadmap to 2035”, to ensure a “safe, sustainable industry”. Actions include producing 50% of UK oil and gas demand domestically to reduce imports and increasing diversified energy supply chain export revenues to £20bn per year.
“The sector can continue to supply secure energy while contributing to climate goals by reducing emissions from its own production operations, helping to mitigate emissions from across the economy and advancing the development of low-carbon energy sources,” said the report.
It added: “The development and uptake of new technologies, constructive working across E&P [exploration and production] companies and partnerships with the supply chain are all key to improved industry performance.”
It also proposed 10 Supply Chain Principles to improve relationships between operators and contractors and create a more sustainable supply chain. These include an emphasis on efficiency and performance improvement and a focus on “new business and contracting models, innovation, partnerships and true collaboration” to prevent cost inflation and ensure return on investment in supply chains.
Meanwhile, a Green MSP has called for the closure of a chemical plant in Fife, stating the Mossmorran site was "compatible with the climate change emergency".
Mark Ruskell told the BBC the plant would either need to be shut down, or significant investment must be made in order to make it as low carbon as possible.
Shell, which operates the plant, said it was a “vital part of Scotland and the UK's energy supply” and added it is supporting the transition to low carbon energy.
Separately, energy watchdog Ofgem has fined Engie Global Markets (EGM) £2.1m after a trader working on behalf of the firm manipulated wholesale gas prices to increase trading profits.
An Ofgem investigation found EGM had engaged market manipulation called ‘spoofing’ between June and August 2016 and that the company failed to take appropriate measures to prevent the breach. EGM agreed to take measures to prevent breaches of this kind from happening again.
Last week, a study found that reserves of shale gas in the UK could be 10 times lower than previously thought, and energy firm Equinor announced operations on a new oil field in the North Sea that will boost the supply chain for decades to come.
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