Mar 22, 2024 - Energy & Environment

Big oil companies are failing on Paris climate goals, study finds

Illustration of a school report card shaped like an oil barrel showing high letter grades crossed out, with an F circled in red.

Illustration: Annelise Capossela/Axios

Major oil and gas companies are failing to align their business plans with Paris Agreement's goals, a new report finds.

Why it matters: The analysis, by financial climate think tank Carbon Tracker, shows the expansive rift between fossil fuel companies and climate scientists.

  • Instead of pulling back, the sector is set to tap enough new oil and gas resources to vault global average surface temperatures past 2°C by the end of the century.

The big picture: The findings also help explain the views expressed by oil and gas CEOs at the CERAWeek by S&P Global industry conference in Houston.

  • There, executives emphasized the need to slow their roll on the energy transition toward cleaner technologies.
  • "We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately, reflecting realistic demand assumptions," said Saudi Aramco CEO Amin Nasser.

Zoom in: Carbon Tracker assigned grades to the 25 largest listed oil and gas companies, evaluating them on the extent to which they are aligned with Paris temperature targets.

  • The conclusions are stark. None of the companies are deemed to be Paris compliant, based on metrics that include production plans, emissions targets, and investment options.
  • This is despite the fact that 2023 was the world's warmest year on record, with 2024 trending even hotter; meanwhile, extreme weather and climate events conclusively tied to warming are worsening conditions in rich and poor countries alike.
  • Scientists have been issuing progressively more urgent warnings about the dangers of triggering climate tipping points if emissions are not quickly slashed.

Between the lines: At the same time, though, global energy demand is increasing and may be poised to spike due to population growth in the developing world. The energy needs of artificial intelligence are also clouding the outlook.

  • Oil and gas companies see such demand projections as justification for boosting, or at least leveling, production levels.
  • The report comes after countries agreed to "transition away from away from fossil fuels in energy systems" at COP28 in Dubai, which was headed by an oil company CEO, and involved extensive industry participation.

Yes, but: The best score (the grades are given on a scale from 'A' through 'H') in this report is a 'D', given to BP.

  • The lowest-ranked oil and gas company is ConocoPhillips. It earned an 'H', and was judged to be aligned with a global average temperature increase by 2100 of at least 2.4°C (4.32°F) above preindustrial levels.
  • A common through-line in the grading is that many companies are planning to either increase production levels, or keep them steady, rather than aiming for a decline that a Paris-aligned path would require.

What they're saying: "Companies worldwide are publicly stating they are supportive of the goals of the Paris-Agreement, and claim to be part of the solution in accelerating the energy transition," report author Maeve O'Connor said in a statement.

  • "Unfortunately, however, we see that none are currently aligned with the goals of the Paris Agreement," she said.
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