According to the report compiled by the financial think tank, Carbon Tracker, the major oil and gas companies are pouring heavy investments, amounting $50bn (£40.6bn), in projects, which are contradictory to global efforts towards tackling the climate crisis. The fossil fuels extracting companies including ExxonMobil, Chevron, Shell, and BP have not aligned their targets with the 2015 Paris Agreement. The agreement was signed with an aim to limit global warming to 1.5C.
Andrew Grant, the co-author of the report, said, “Every oil major is betting heavily against a 1.5C world and investing in projects that are contrary to the Paris goals.”
Since last year, these companies have spent at least 30% of their investment in costly and riskier projects, including oil and gas extraction from tar sands, deepwater fields, and the Arctic, despite alarms from climate watchdogs.
The world would have to pay a heavy price for their adamant and ignorant attitude as the scientists warned that with a 1.5C temperature rise in global temperature, the world would become more vulnerable to climatic disasters. It would lead to rise in sea-level, making way for more natural disasters, forced migration, destruction of harvests and increase in deadly heatwaves.
The report highlighted the ongoing ambitious projects in the sector, including Shell’s £10.6bn Canadian liquefied natural gas developments, BP’s oilfield expansion in Azerbaijan, and a £1.1bn deepwater site in Angola involving five major oil companies, most of which would become impossible to run, if government strictly adheres to the agreements.
Prior to Grant’s association with the Carbon Tracker, he worked as a natural resources analyst at Barclays. He said that these companies would be ‘deep out of the money in a low-carbon world’.
Grant urged investors to challenge these companies’ spending on new oil and gas extraction projects. He said, “The best way to both preserve shareholder value in the transition and align with climate change goals will be to focus on low-cost projects that will deliver the highest returns.”
The report suggested, “To meet climate goals, it is an unavoidable consequence that fossil fuel use must drop dramatically. The only way that fossil fuel companies can be ‘Paris-aligned’ is to commit to not sanctioning projects that fall outside this constraint, and shrink where necessary.”