Why none of the large oil companies are “Paris-aligned”, and what they need to do to get there (Carbon Tracker, September 2019)

In September 2019 Carbon Tracker’s latest report “Breaking the Habit” was released.

“The most common climate-related question facing investors – “how can we tell if a company is aligned with Paris”?

In this report, we lay out our approach and apply it to the largest listed oil and gas producers. For the first time, we look at alignment in terms of short term actions – which individual projects are non-Paris compliant and wouldn’t go ahead in an economically rational Paris-aligned world, yet nonetheless either a) were sanctioned last year; or b) are targeting sanction this year.

The key takeaway messages of this report are:

  • The shift to a Paris-compliant world will require a dramatic change in behaviour from the ingrained growth model.
  • Last year, all of the major oil companies sanctioned projects that fall outside a “well below 2 degrees” budget on cost grounds.
  • This includes the large European companies that are doing the most to reassure investors that they are responsive to climate concerns – BP, Shell, Total and Equinor.
  • The majors also hold a number of projects targeting approval this year which don’t make financial sense under a Paris-aligned pathway.
  • No new oil sands projects are economic in a low carbon world, and barely any even if climate targets are missed.
  • Several US shale specialists have portfolios that are entirely out of the budget.

The oil and gas projects that have already been sanctioned will take the world past 1.5 degrees, assuming carbon capture and storage remains sub-scale”.

Read the entire report here or use this link to Carbon Tracker.

 

Sources: All texts, content, quotes and graphics by Carbon Tracker. All credits and rights to Carbon Tracker.

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