The oil and gas industry is set to burn through its allocated carbon budget 13 years early unless decisive action is taken immediately, new analysis has found.
After assessing the current rates of production for 100 of the world’s biggest oil and gas firms, the World Benchmarking Alliance (WBA) found that they are set to consume the sector’s allocated carbon budget (for 2019 to 2050) by 2037.
The study also found that none of the 100 companies have committed to stopping oil and gas exploration, and that only 13 have low-carbon transition plans that extend at least 20 years into the future.
Based on the sector's current trajectory, the researchers warned that the world will be unable to limit global warming to 1.5°C above pre-industrial levels by 2050, which is the most ambitious target of the Paris Agreement.
This is the first time the industry has been judged against a 1.5°C scenario, and the first study to assess oil and gas companies using the International Energy Agency’s (IEA) Net Zero Emissions by 2050 scenario.
“The progress of the oil and gas industry worldwide is woefully inadequate if we’re going to limit global warming to 1.5°C by 2050,” said Nicolette Bartlett, executive director of CDP, which provided data for the study.
“If we want to meet the IEA’s 1.5°C scenario, that means total transition away from oil and gas production as a society, and the inherent transformation of fossil fuel-based business models.”
The analysis also suggests that the oil and gas extracted by the 100 companies assessed is set to use up nearly 80% of the remaining CO2 budget for all sectors and all human activities.
State-owned companies will take up 54% of the remaining carbon budget, with BP, Chevron, ConocoPhillips, Eni, ExxonMobil, Shell and Total Energies accounting for a further 13%, and independent companies 12%.
Some companies’ emissions are equivalent to those of whole countries, with ExxonMobil’s scope 3 emissions greater than Canada’s in 2019, and Saudi Aramco’s scope 1, 2 and 3 emissions greater than Germany, France, Italy and Spain’s combined emissions in the same year.
The researchers said that “opaque, unambitious or non-existent” targets and strategies show that the oil and gas sector is “not accepting its share of responsibility for global emissions”.
They found that most companies are only sharing partial data across scope 1 and 2, and that just a third of firms, including Galp, Repsol & Equinor, disclose information on scope 3 emissions.
Research and development is another area where companies are yet to show action, despite many referencing “new technologies” as the future of the industry in their transition plans.
Bartlett added: “Time is ticking, the oil and gas companies have now less than a decade to radically shift from the problem side to the solution side by becoming decarbonised energies and associated services providers.”
Image credit: iStock
