Spanish oil giant’s net-zero goal puts U.S. companies to shame on climate
Oil and gas companies no longer deny that carbon dioxide is causing climate change, and many are preparing for the energy transition, but only one has accepted it will lose money on its fossil fuel assets.
Repsol, a global energy giant based in Madrid, on Monday promised to achieve net carbon neutrality by 2050. The company said it would capture as much carbon as it releases and sells.
No other oil and natural gas company has set a netzero goal. But what is more impressive is that Repsol wrote down $5.3 billion in oil and natural gas holdings in recognition that they will be less valuable in a lowcarbon future.
Executives at the $41 billion company said they would make exploration and production decisions “assuming an oil and gas price curve compatible with the Paris Agreement and the scenario of limiting the temperature increase to well
below 2 degrees Celsius.”
The announcement came as world leaders gathered in Madrid for COP25, the annual U.N. conference to assess the fight against climate change. The latest scientific papers show we need every oil and gas company to take similar steps and quickly.
Global carbon dioxide emissions from fossil fuels will set a record high in
2019, according to the Global Carbon Project, a nonpartisan, nonprofit research group.
The average American was responsible for 18.2 tons of carbon, surpassed only by Australians, the group calculated. The Chinese average was 7.7 tons per capita, and the European Union average was 7.4 tons.
The world needs to cut emissions by 7.6 percent, according to climate models. Humans have understood the relationship between carbon dioxide and temperature since 1860, and to prevent the Earth from getting too warm, we must reduce emissions.
Over the next week, negotiators at COP25 will focus on crafting an international cap-and-trade system. Such a market would allow nations that excel in slashing emissions to sell credits to countries that struggle to achieve their Paris goals, usually because they are fossil fuel producers.
A national cap-and-trade system would benefit the United States since our corporations supply much of the world with gasoline, diesel, jet fuel and other refined products. Refining and petrochemical production in Texas is one reason why U.S. per capita emissions are so high.
A cap-and-trade system would help the country meet the Paris goals without sacrificing Gulf Coast industrial complexes. But President Donald Trump has made sure the United States will not play a significant role in creating this critical marketplace.
Trump withdrew the United States from the Paris Agreement effective next year. A low-level U.S. delegation is in Madrid this year, and none will attend next year’s meeting. The United States will be the only nation without a seat at the table.
If U.S. refiners such as Exxon Mobil, Chevron and Valero were genuinely committed to mitigating climate change, they would publicly demand that Trump rejoin the Paris agreement and participate in these global negotiations.
Instead, U.S. oil and gas companies are taking baby steps on climate issues, most of them public relations moves, while continuing business as usual.
The Natural Gas Supply Association, which includes Chevron, ConocoPhillips and Exxon, announced its member unanimously support a carbon tax. But only if federal and state authorities eliminate emissions regulations and stop subsidizing clean energy sources.
The group also does not plan to lobby Congress, where Republicans are blocking efforts to establish a tax.
The U.S. Chamber of Commerce, which represents refineries and petrochemical companies, has also changed their tune.
Five years ago, one of their lobbyists refused to acknowledge to me that climate change was real, but last month the group quietly rewrote its website to support the Paris Agreement.
Meanwhile, the refining and petrochemical companies have $616 billion in new projects under construction, with $62.6 billion of them in North America, according to Industrial Information Resources, which tracks the industry.
Does the U.S. oil and gas industry have no courageous CEOs willing to speak the truth about their assets and demand that Trump do the right thing for both energy shareholders and the climate?
The nonbinding goals set in the 2016 Paris Agreement are not strict enough to limit warming to the 2-degree Celsius target, and most wealthy countries are on course to violate the accord. What the world needs is corporate leadership, and so far it’s coming from Europe.