Oil and Gas heavyweights call for carbon pricing

Major oil and gas companies, BG Group, BP, Eni, Royal Dutch Shell, Statoil and Total sent a call to the governments around the world and to the United Nations Framework Convention on Climate Change, to introduce carbon pricing systems.

The companies urge the governments to create clear, stable, ambitious policy frameworks that could eventually connect national systems.

These would reduce uncertainty and encourage the most cost-effective ways of reducing carbon emissions widely, the companies said.

The six companies set out their position in a joint letter from their chief executives to the UNFCCC Executive Secretary and the President of the COP21. This comes ahead of the UNFCCC’s COP21 climate meetings in Paris this December.

With this unprecedented joint initiative, the companies recognize both the importance of the climate challenge and the importance of energy to human life and well-being. They acknowledge the current trend of greenhouse gas emissions is in excess of what the Intergovernmental Panel on Climate Change says is needed to limit global temperature rise to no more than 2 degrees Centigrade, and say they are ready to contribute solutions.

In their letter the CEOs write, “Our industry faces a challenge: we need to meet greater energy demand with less CO2. We are ready to meet that challenge and we are prepared to play our part. We firmly believe that carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low carbon technologies and the right resources at the right pace.  We now need governments around the world to provide us with this framework and we believe our presence at the table will be helpful in designing an approach that will be both practical and deliverable.”

In their letter, the CEOs highlighted the role natural gas can play in addressing climate change.

“We believe the pragmatic step of implementing a widespread and effective pricing of carbon emissions is critical to realising the full and positive impact natural gas can have,” they said in the letter.

For natural gas, the case is simple: when burned to make electricity, it typically generates around half the carbon emissions of coal. In addition, gas can provide the electricity base load that is required and can be a flexible partner to renewable as efforts continue to improve the storage of electricity produced by intermittent solar or wind. This benefit is enhanced when natural gas emissions all along the value chain are controlled and reduced, stands in the letter.

The letter has been signed by Helge Lund of BG Group, Bob Dudley of BP, Claudio Descalzi of Eni, Royal Dutch Shell’s Ben van Beurden, Statoil’s Eldar Sætre and Patrick Pouyanné of Total.

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LNG World News Staff; Image: BG Group