In order to meet the international climate targets set by the Paris Agreement (keeping the temperature increase below 2°C and as close as possible to 1.5°C), the world’s major oil and gas companies must reduce their cumulative production (as a group) by 35% by 2040, warns a new report by the English think tank Carbon Tracker published on 1 November.
“The industry is trying to have its cake and eat it too - reassuring shareholders and appearing supportive of [the] Paris agreement, while still producing more fossil fuels. This analysis shows that if companies really want to both mitigate financial risk and be part of the climate solution, they must shrink production”, said Mike Coffin, oil and gas analyst at Carbon Tracker and one of the report’s authors.
To reach this conclusion, the authors used the International Energy Agency’s (IEA) Beyond 2 degrees scenario (B2DS) as a low-carbon baseline scenario and then assigned each company a “carbon budget”, i.e. a finite amount of emissions, reflecting the planet’s natural limits.
Carbon Tracker further estimates that at current emission rates, “the total carbon budgets to limit temperature increase to 1.5°C and 1.75°C will be exceeded in 13 years and 24 years, respectively”.
Moreover, while the organization notes that none of the major oil and gas companies are on track to comply with the Paris Agreement by 2040, it also points out that the situation varies greatly from one company to another.
Thus, while ConocoPhillips needs to make the biggest effort by reducing its production by 85%, Shell only needs to reduce its production by 10%.
ExxonMobil, the largest oil company, would need to reduce its production by 55%. Finally, the reduction would need to be 40% in the case of Eni, 35% for Chevron and Total and 25% for BP.
To download the report: https://bit.ly/36EjGBg (Original version in French by Damien Genicot)