Why are oil and gas com­pa­nies call­ing for more ac­tion on cli­mate change?

Kuwait Times - - HEALTH & SCIENCE -

NEWYORK: This year many of us have in­creased our ad­vo­cacy on this is­sue. And last month, com­pa­nies re­spon­si­ble for a fifth of the world’s oil and gas sup­ply in the Oil and Gas Cli­mate Ini­tia­tive (OGCI) threw their sup­port be­hind a new global agree­ment at the forth­com­ing UN talks in Paris. For oil and gas com­pa­nies to take such a stance has been de­scribed as “un­usual”and even “un­prece­dented”. How­ever, in fact, in BP we have pub­licly ac­knowl­edged the risk and have been work­ing to ad­dress it since the 1990s. So why do com­pa­nies that pro­duce oil and gas want to see more done to tackle cli­mate change? The first rea­son is sim­ply that we want the planet to be sus­tain­able in the fu­ture. We have the same hopes and fears for our chil­dren and grand­chil­dren as any­one else. The sec­ond rea­son for our stance is that, be­ing close to the is­sue, we have views on the re­al­is­tic and af­ford­able ways to make the tran­si­tion to a lower car­bon econ­omy. And we can see that oil and gas are part of that tran­si­tion.

With the UN-led con­fer­ence on cli­mate change in Paris ap­proach­ing, it’s im­por­tant that we ex­plain our view. In BP, as we and sev­eral other com­pa­nies made clear in a let­ter to the UN in June, we be­lieve the best mech­a­nism to drive a shift to a lower car­bon fu­ture is to put a price on car­bon. That can be done via taxes or by cap-and-trade sys­tems. Ei­ther can be ef­fec­tive if well-con­structed. There are many ways to re­duce car­bon emis­sions: greater en­ergy ef­fi­ciency, re­new­able en­ergy, gas dis­plac­ing coal, car­bon cap­ture and stor­age, nu­clear power and many oth­ers. Of th­ese, en­ergy ef­fi­ciency is gen­er­ally viewed as be­ing “good for all sea­sons”, whereas the rest have their supporters and their de­trac­tors. The ben­e­fit of a broad-based, wellde­signed car­bon price is that it en­cour­ages im­prove­ments in en­ergy ef­fi­ciency as well as shifts in the fuel mix. In terms of the fuel mix, a car­bon price makes all of the lower car­bon al­ter­na­tives more com­pet­i­tive-and in each par­tic­u­lar sit­u­a­tion the most eco­nom­i­cal op­tions will emerge. This is vi­tal when the tech­nolo­gies need to be de­ployed at mas­sive scale and af­ford­abil­ity is key.

Keen to com­pete

A price that treats all car­bon emis­sions equally, whether from a re­fin­ery smoke­stack or car tailpipe, will make our oper­a­tions and prod­ucts more costly in some cases. We ac­cept that. If it has the same im­pact on ev­ery­one, we are keen to com­pete. A car­bon price creates op­por­tu­ni­ties as well as risks. Oth­ers take dif­fer­ent views. Some call for the rapid phas­ing out of fos­sil fu­els now. Some ask share­hold­ers to sell their fos­sil fuel hold­ings, ar­gu­ing that some re­serves are ef­fec­tively “un­burn­able” or some com­pany as­sets “stranded” if the world is to limit the global tem­per­a­ture rise to the widely recog­nised goal of 2 de­grees Cel­sius on pre-in­dus­trial times. Oth­ers ask us to switch in­vest­ment whole­sale from oil and gas to re­new­able en­ergy. Th­ese are pas­sion­ately held views that de­serve a re­sponse. To start on com­mon ground, we agree that if all the world’s fos­sil fuel re­sources were burned, the tem­per­a­ture rise would ex­ceed the 2 de­grees thresh­old.

To put the re­source is­sue into per­spec­tive, so­ci­ety has so far con­sumed the equiv­a­lent of around two tril­lion bar­rels of oil and gas and we es­ti­mate that there are still more than 40 tril­lion bar­rels worth in the world’s reser­voirs. So there is clearly far more oil and gas out there than we can burn if we are to have a sus­tain­able fu­ture. As Sheikh Ya­mani fa­mously ob­served, the Stone Age did not end be­cause we ran out of stones and it will be the same with fos­sil fu­els. How­ever this does not mean that we should

stop us­ing all fos­sil fu­els now, even if we could.

Start­ing point

To de­vise a work­able route for­ward we need to understand the start­ing point-and par­tic­u­larly the scale of the world’s reliance on fos­sil fu­els. To­day the world uses the equiv­a­lent of around a quar­ter of a bil­lion bar­rels of en­ergy ev­ery day. Of that, 32 per­cent of en­ergy comes from oil, 30 per­cent from coal, and 24 per­cent from gas-so 87 per­cent from fos­sil fu­els in to­tal. That means, 7 per­cent comes from hy­dro-elec­tric­ity, 4 per­cent from nu­clear power and 3 per­cent from other renewables, in­clud­ing wind and so­lar power.

This global en­ergy sys­tem, with its huge reliance on hy­dro­car­bons, has evolved over two cen­turies as so­ci­eties have used fos­sil fu­els to sup­port the world’s grow­ing pop­u­la­tion and raise global liv­ing stan­dards. Global en­ergy needs to con­tinue to play that role over the next 50 years, as some of the world’s poor­est coun­tries grow and hun­dreds of mil­lions of peo­ple are lifted out of fuel poverty, but it needs to do so in a sus­tain­able and safe man­ner. This en­ergy sys­tem which un­der­pins mod­ern life and hu­man de­vel­op­ment can­not be dis­man­tled overnight.

For­tu­nately, that’s not only im­pos­si­ble, but un­nec­es­sary. Stud­ies such as the widely cited In­ter­na­tional En­ergy Agency’s ‘450 sce­nario’ show that oil and gas can and will be part of the jour­ney to a more sus­tain­able fu­ture. That sce­nario en­vis­ages a fu­ture en­ergy mix where the con­cen­tra­tion of green­house gases in the at­mos­phere sta­bi­lizes at 450 parts per mil­lion and the global tem­per­a­ture rise is kept to 2 de­grees and emis­sions in 2040 are around 40 per­cent down on 2013. How­ever, in that sce­nario the to­tal consumption of en­ergy still grows, by 12 per­cent to 2040, and oil and gas still make up al­most half of the en­ergy used.

Af­ford­able tran­si­tion

While we can­not be com­pla­cent, the world can make an or­derly and af­ford­able tran­si­tion to a low-car­bon econ­omy. And there are sev­eral means to that end. The road to sus­tain­abil­ity has sev­eral lanes. The first is en­ergy ef­fi­cien­cyre­duc­ing emis­sions by us­ing en­ergy more ef­fec­tively. A car­bon price would en­cour­age smart build­ings, ad­vanced in­dus­trial plant, home in­su­la­tion, higher fuel econ­omy and the myr­iad of other ways to use en­ergy more ef­fi­ciently.

There is plenty of po­ten­tial here. Europe has been a leader in en­ergy ef­fi­ciency but the US, China and oth­ers are catching up. This can ac­count for around half of the emis­sions re­duc­tion re­quired, ac­cord­ing to the In­ter­na­tional En­ergy Agency. Our in­dus­try has an im­por­tant part to play in this, par­tic­u­larly by pro­vid­ing prod­ucts that pro­mote fuel econ­omy in ve­hi­cles.

Sec­ond, gas is very much part of the so­lu­tion be­cause it emits around half the car­bon of coal when used to gen­er­ate power. So re­plac­ing coal with gas in power sta­tions can make a mas­sive dif­fer­ence, given that coal is the largest source of en­ergy-re­lated emis­sions. Switch­ing just 1 per­cent of power gen­er­a­tion from coal-fired plants to gas-fired ones would cut global CO2 emis­sions as much as in­creas­ing re­new­able en­ergy ca­pac­ity by 11 per­centand do so rapidly and eco­nom­i­cally. A ton of emis­sions saved by switch­ing from coal to gas is just as ef­fec­tive as one saved by switch­ing from fos­sil fu­els to renewables. A third route to­wards lower emis­sions is of course re­new­able en­ergy. For the fu­ture, it is im­por­tant to build the re­new­able sec­tor from to­day’s low level. — Reuters

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.