“Stop Me Before I Kill the Planet”: Another Major Oil Producer calls for Carbon Pricing
February 18, 2015
In another astonishing announcement, a second major Oil producer has called for a global carbon pricing mechanism.
BP follows last week’s speech from Ben Van Beurden, CEO of Shell, which called for policies to curb climate change, including a price on carbon.
BP has warned that carbon dioxide emission levels from burning fossil fuels are unsustainable unless the international community unilaterally introduces tougher binding regulations on atmospheric pollution.
The stark warning from the UK’s second-largest oil company came with the publication on Tuesday of its closely-watched long-term outlook for global energy markets, which predicts that CO2 emissions will increase by 1pc per year, or 25pc in total, through to 2035.
This rise in pollution would be worse than the current rate, which scientists have said would have a negative effect on climate change. The United Nations is seeking to limit the increase of the average global surface temperature to no more than 2C, compared with pre-industrial levels, to avoid “dangerous” climate change, and will hold a major conference in Paris in December to agree on a firm system for restricting emissions.
Bob Dudley, BP chief executive, said: “The most likely path for carbon emissions, despite current government policies and intentions, does not appear sustainable. The projections highlight the scale of the challenge facing policy makers at this year’s UN-led discussions in Paris. No single change or policy is likely to be sufficient on its own.”
Oil companies such as BP and Shell are coming under increasing pressure from shareholders and governments to clearly define their policies surrounding climate change. The so-called “carbon bubble” theory argues that shares in the oil industry could plummet due to the need to limit global warming.
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“Identifying in advance which changes are likely to be most effective is fraught with difficulty. This underpins the importance of policy-makers taking steps that lead to a global price for carbon, which provides the right incentives for everyone to play their part,” said Mr Dudley.
BP said the continued increase in emissions would come in spite of less reliance on coal over the coming decades. China has been heavily dependent on coal during its rapid industrialisation since 1990, but demand is expected to grow at 0.8% a year in the period up until 2035, down from 3.8% a year since 2000.
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BP believes the recent fall in oil prices will prove temporary, putting the decline from $115 a barrel to a low of $45 a barrel down to increases in supply caused by the US shale revolution. Recent weeks have seen a partial recovery in the oil price, with the cost of a barrel of Brent crude standing at around $62 a barrel last night.
The oil company said growth in supply from the new US fields would slow but that global demand would continue to increase, leading to higher prices.
We are at a moment of historical change – I don’t think it’s too much to compare this to the fall of the Iron Curtain and the Berlin Wall in 1989. A gigantic, monolithic industry that has for decades presented a united front against action on climate is now realizing the stakes are so high, the science so overwhelming, the politics so clearly lining up against them, and possibly most important, the growing impact of the Divestment movement as investors wake up to their exposure to a “carbon bubble” – that they are lining up and calling for action.
Last week word leaked of Apple’s new initiative to build an electric vehicle, in part because they see an opportunity in that space, but also in part because of this ongoing awakening of major corporations to the threat posed by climate change, their role in it, and their responsibility to the planet and the future. Apple’s Chairman Tim Cook underlined the position at a Goldman Sachs technology conference:
The agreement positions the CEO of the world’s biggest company at the center of the global debate about climate change and the future of energy—a role Cook has increasingly embraced over the past two years. The company has been ramping up its investment in solar, with two 20 Mw plants completed and a third under development in North Carolina, and a 20 Mw plant in development in Reno, Nev. All of Apple’s data centers are now powered by renewables.
“We know that climate change is real,” Cook said on Tuesday. “Our view is that the time for talk has passed, and the time for action is now. We’ve shown that with what we’ve done.”
Climate Denial Crock of the Week 
February 18, 2015 at 8:39 am
Reblogged this on jpratt27.
February 18, 2015 at 10:24 am
“Oil companies… are… under… pressure from shareholders… to… define their policies surrounding climate change.” Exactly: a global carbon price retires risk for these corporations. Specifically that their shares could get caught up in a “carbon bubble” stampede for the exits once the general public realizes just how overwhelmingly scr8w8d they are due to prior inaction.
February 19, 2015 at 1:08 pm
Here is an explanation plucked solely from my insomnia driven imagination. Petroleum emits less CO2 per unit of energy than Coal, and natural gas (CH4) emits less than either. In any carbon pricing scheme petroleum and NG will have an advantage over coal, and the higher the “carbon price” the greater that advantage will be. I do know that ExxonMobil has divested from coal in recent years, don’t know about BP and Shell. Petroleum can still be used as a feedstock for industrial products like plastic, which do not emit CO2, and would not be subject to a carbon tax. Is it possible that the big oil companies are only looking out for their bottom line, and the end result of less carbon emissions is only a coincidence?
February 21, 2015 at 12:55 pm
give the man a cigar.
February 18, 2015 at 2:30 pm
I sold my BP and Exxon stock months before the oil price drop. I sold BP because of the slowdown in Europe and Russia’s oil/gas antics. Can’t remember why I sold Exxon, other than we’re at a market top and every time the market threatens to go into a well defined bear, I start incrementally chopping stuff.
February 18, 2015 at 5:01 pm
Carbon pricing is practically worthless without clear and strong caps on total emissions. The EU carbon trade was a fiasco and basically served to reward polluters. With carbon pricing you get silly things like reward to oil companies who use CO2 injected into wells to enhance extraction… one step forward, ten steps back. So of course they want a carbon pricing scheme. That way they can continue their little three ring circus.
In other words, beware oil companies selling carbon pricing! It’s moral hazard in the extreme.
February 18, 2015 at 6:02 pm
I notice a bit of contradictions in some of the stories posted here. Not that I expect everyone to be perfect, mind you, including me. Predicting the future success or failure of any given technology is always risky.
That said, I seem to recall that just a couple of weeks ago it was being posited here that the current drop in oil prices is due to the fact that demand for oil has fallen so far thanks to solar and wind, which is causing a desperate Saudi Arabia to quickly drill and sell off all its oil because soon nobody is going to want it. Once everyone has a solar-powered car, Shell, Exxon-Mobil and BP are doomed.
Then the same theory was being applied to coal, which is collapsing thanks to wind and solar (rather than fracked natural gas).
Well, if the above is really true, we don’t need to do anything, do we? Soon oil will be cheaper than water, and coal will have no use other than landfill. Thus, no need for carbon pricing, feed-in tariffs, etc. We’ll all be riding around in solar-powered cars, and flying in wind-powered airplanes. Utopia at last!
Personally, I don’t buy it. Whatever games are being played by OPEC is a temporary phenomena, possibly to drive the oil frackers in North Dakota and Texas out of business. The demand for oil and coal will be there for a long time, especially since there is a mass movement for shutting down nuclear power plants. Here in Taiwan, pressure from greens has caused out government to mothball a brand-new nuclear power plant that never went online, even though it’s ready for startup. As I said, “mothballed” – they haven’t made a decision to dismantle it, so it’s being kept around just in case the dozen coal power plants that they are now building to replace the nukes are unable to meet demand. Of course, our public utility, Taipower, is putting pictures of windmills all over our electric bills to show us how green they are, even though none of our power comes from wind.
OK, I’ve got to run. A busy day ahead – it’s Chinese New Year today, and we have guests to tend to at our home stay. So Happy New Year to all – hopefully it won’t set a new record for temperatures, though I suspect it will.
cheers,
Cy
February 18, 2015 at 11:48 pm
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February 19, 2015 at 9:42 am
[…] In another astonishing announcement, a second major Oil producer has called for a global carbon pricing mechanism. BP follows last week's speech from Ben Van Beurden, CEO of Shell, which called fo… […]
February 19, 2015 at 12:54 pm
[…] In another astonishing announcement, a second major Oil producer has called for a global carbon pricing mechanism. BP follows last week’s speech from Ben Van Beurden, CEO of Shell, which called for policies to curb climate change, including a price on carbon. […]
February 20, 2015 at 5:47 am
[…] On the heels of Shell, now BP has warned that carbon dioxide emission levels from burning fossil fuels are unsustainable unless the international community unilaterally introduces tougher binding regulations on atmospheric pollution. […]
February 22, 2015 at 4:18 pm
[…] Read about CitiGroup’s plan here or here. Then consider British Petroleum’s new statements. […]