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Concern Trolling at Its Best.

It has the makings of a climate change fairy tale. On May 29, the CEOs of Europe's largest oil and gas firms--BG Group, BP, Eni, Royal Dutch Shell, Statoil, and Total--sent a letter to Christiana Figueres, the UN's top climate change official, announcing their support for putting a price on carbon. The CEOs wrote that they "recognize ... the importance of the climate challenge" and "acknowledge that the current trend of greenhouse gas emissions is in excess of what the Intergovernmental Panel on Climate Change (IPCC) says is needed to limit the temperature rise to no more than 2 degrees above pre-industrial levels. The challenge is how to meet greater energy demand with less C[O.sub.2]. We stand ready to play our part."

Before lavishing too much praise on the European oil majors for their come-to-Jesus moment on carbon pricing, it's worth asking: What's in it for them? And, what--or, in this case, who--is missing? It turns out that the support for carbon pricing has a lot to do with those companies' vested interest in gas as fuel. In a speech at the World Gas Conference, in Paris, a day after the joint carbon pricing announcement, Shell CEO Ben van Beurden said: "Gas plants are cheaper to build and quicker to build than coal plants. And gas-fired power becomes even more attractive when you take the costs of tackling climate change and air pollution into account. The quicker the world turns from coal to gas and renewables, the lower these costs will be. In Europe, gas-fired power-plants have been mothballed or decommissioned over the last few years.

Why? Well, a large amount of subsidized renewables has entered the energy system. And, from a short-term financial perspective, coal-fired power has been cheaper than gas."

When burned to generate electricity, natural gas emits half as much carbon dioxide as coal. Gas producers are eager to grab market share from their vulnerable, higher-carbon competitor, and a global price on carbon would be a useful cudgel. Notably absent from the European oil majors' missive were signatures from US oil giants ExxonMobil and Chevron. The companies were invited to join but declined, an industry source told Reuters. "It's clear that there is a difference of views on each side of the Atlantic," Total CEO Patrick Pouyanne said.

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Title Annotation:FLIP SIDE; oil and gas firms on gas as fuel
Publication:Earth Island Journal
Date:Sep 19, 2015
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