In Signing Climate Statement, Shell Charts Different Course on Global Warming

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An oil platform in the Gulf of Mexico which was operated by Shell Oil Co.

Image: Jon Fahey/Associated Press

By Andrew Freedman2014-04-10 15:22:06 UTC

Faced with ominous scientific warnings on global warming caused by the burning of fossil fuels like coal, oil and natural gas, two energy giants — Exxon Mobil Corp. and Royal Dutch Shell — have sent diametrically opposing signals in recent weeks.

Exxon, for its part, told its shareholders on March 30 that the company does not think that policies to address manmade global warming constitute a risk to the company’s profitability, because global policy makers are not going to enact strict emissions limits before 2040.

Instead, the company plans to exploit all of its remaining oil and gas reserves, as well as new discoveries, through 2040.

See also: Carbon Dioxide Levels Climb Into Uncharted Territory for Humans

If this turns out to be the case, it would be a boon for Exxon, but a potentially disastrous scenario for the climate, based on the most recent scientific data showing that dramatic cuts in greenhouse gases are needed in the near-term to prevent the most dangerous global warming-related impacts, such as the collapse of land-based ice sheets in Greenland and parts of Antarctica.

Shell, on the other hand, decided to join more than 70 other companies, including Adidas and Unilever, by signing onto a non-binding document known as the “Trillion Tonne Communiqué.” The communiqué is a project sponsored by the Prince of Wales’s Corporate Leaders Group, which brings together business leaders to address climate change.

The document puts the signatories on the record as advocating for the development of ambitious greenhouse gas emissions reduction targets and timelines to bring global greenhouse gas emissions to “net zero” by the end of the century.

“This communiqué sends a clear message from business at a critical time, when events in the Ukraine have refocused global attention on energy security, and just as the scientific consensus reminds us all of the imperative of collective action,” said Eliot Whittington, deputy director of the Corporate Leaders Group, in a press release.

In signing the communiqué, Shell endorsed the idea of limiting cumulative greenhouse gas emissions to less than 1 trillion tonnes of carbon since the start of the industrial era, as recommended by the U.N. Intergovernmental Panel on Climate Change (IPCC) in a report released in September. This endorsement was a notable move for an energy company, considering that meeting that goal would put the company’s main sources of revenue at risk.

While Shell has been investing in alternative fuels like wind and biofuels, as well as advanced but so far unproven technologies like carbon capture and storage, most of its revenue still comes from its oil and gas operations. Its Arctic drilling activities have drawn the attention of environmental groups such as Greenpeace, which has protested the company.

“Without a clear and focused plan to manage our use of fossil fuels, we cannot achieve our target of keeping global cumulative emissions below a trillion tonnes,” says a frequently asked questions document accompanying the communiqué.

“The signatories to the communiqué want a policy response to the risks posed by climate change,” the document says. “Businesses that sign the communiqué want to be a part of the solution in meeting this challenge and support a policy response at a sub-national, national and international level.”

Kelly Levin, a senior research associate at the World Resources Institute in Washington, who has researched the implications of the IPCC’s carbon budget, told Mashable that Shell’s decision, along with the other companies that signed the communiqué, is a positive sign. “I think it is quite significant that major businesses have come out to support what implies a 2 degrees Celsius (3.6 degrees Fahrenheit) goal… and in strong support of climate change science,” Levin said, referring to the goal of limiting global warming to no more than 3.6 degrees Fahrenheit above preindustrial levels.

The global average temperature has already increased by 1.6°F between 1901-2012, the IPCC said.

Simulated global mean surface temperature increase as a function of cumulative total global CO2 emissions.

In signing the communiqué, Shell did not commit itself to taking any actions to reduce its carbon footprint, and its move could be viewed as an attempt at "greenwashing" its image. However, despite the non-binding nature of the document, its actions sent a dramatically different message than Exxon's approach.

In two carbon risk reports, which were released on March 30, Exxon said it plans to exploit all of its massive oil and natural gas reserves — both existing and future finds — through 2040, which would emit at least 7 gigatons of carbon. (One gigaton is equal to 1 billion tons.)

This strategic planning decision amounted to a slap in the face of environmental advocates as well as scientists, who have said the world can only withstand a limited amount of additional greenhouse gas emissions before global temperatures increase to levels that would have a higher chance of destabilizing global ice sheets and raising sea levels high enough that adaptation would be nearly impossible.

In the first installment of its lengthy and highly technical fifth assessment report on the science of climate change, the IPCC found that, in order to have at least a 66% chance of limiting global warming to 3.6 degrees Fahrenheit or less compared to preindustrial levels, which world leaders agreed to in 2009, the total cumulative emissions since the start of the industrial era would be limited to 1 trillion tonnes of carbon or less.

About half of this budget, or 531 billion tonnes of carbon, had already been used up by 2011, and significant near-term cuts in emissions would be required to stay within this budget going forward, the IPCC said.

Since a molecule of carbon dioxide can stay aloft for hundreds to more than a thousand years, it is the cumulative emissions since the start of the industrial revolution that will determine the amount of eventual global warming and the impacts of that warming.

According to a 2009 study, burning all proven and economically recoverable oil and gas reserves would put another 763 billion tonnes of carbon into the atmosphere. Because carbon dioxide is not the only global warming gas, the remaining carbon budget may actually be smaller than what the IPCC outlined.

If emissions continue to follow the current course, the world would exceed the IPCC carbon budget in as little as 30 years.

The IPCC said meeting the cumulative carbon budget would require having global emissions peak by 2020, and negative carbon emissions — meaning more carbon is taken out of the atmosphere by plants and the oceans than is added by cars, trucks and factories — would need to begin by 2090. A new section of the IPCC’s voluminous fifth assessment report on climate science is due to be released on April 13, and it will provide more details about ways to reduce emissions to meet the 3.6 degree Fahrenheit temperature target.

Yet Exxon is making no plans to bring its operations into line with the global carbon budget, even in a non-binding way. In fact, its shareholder climate reports made no mention of the budget concept at all.

Instead, Exxon said it is prioritizing the need to meet the world’s growing energy demands through its oil and gas products, rather than addressing climate change, during the next several decades.

“All of ExxonMobil's current hydrocarbon reserves will be needed, along with substantial future industry investments, to address global energy needs,” said William Colton, Exxon's vice president of corporate strategic planning, in a press release.

A study published in January found that just 90 companies were responsible for emitting more than 60 percent of cumulative global emissions of carbon dioxide between 1750 and 2010, including Exxon and Shell.

Topics: carbon, carbon budget, Climate, Exxon, fossil fuels, greenhouse gas emissions, IPCC, oil companies, shell, U.S., US & World, World