Nov 10, 2022
Despite repeated warnings that new fossil fuel projects are incompatible with averting climate disaster, oil and gas corporations "are on a massive expansion course" to increase dirty energy production in the coming years, according to an analysis released Thursday at the United Nations COP27 meeting in Egypt.
"Keeping these oil and gas resources in the ground is the bare minimum of what is needed to keep 1.5°C attainable."
The new report by the German nonprofit Urgewald and 50 NGO partners, which denounces "an industry willing to sacrifice a livable planet," found that the vast majority of the world's oil and gas companies intend to scale up the extraction of fossil fuels in the years ahead, having collectively dumped $160 billion into exploration since 2020.
None of this investment is consistent with the International Energy Agency's (IEA) blueprint for achieving net-zero emissions by 2050, a key component of meeting the Paris agreement's goal of limiting global warming to 1.5°C above preindustrial levels—beyond which impacts will grow increasingly deadly for millions of people, particularly those residing in poor nations that have done the least to cause the crisis.
The IEA made clear in its May 2021 report that no new oil and gas fields can be exploited if the world is to avoid climate catastrophe. But according to Urgewald, 96% of upstream fossil fuel companies (655 out of 685) are planning to expand their operations, and short-term expansion plans have increased by 20% since last year.
According to Urgewald, 512 of these companies are currently "taking active steps to bring 230 billion barrels of oil equivalent (bboe) of untapped resources into production before 2030."
If these fossil fuels are removed from the ground and burned, an additional 115 billion tonnes of heat-trapping carbon dioxide equivalent will be pumped into the atmosphere by the end of the decade. That's 30 times more greenhouse gas pollution than Europe generates each year.
Urgewald's report comes one day after Climate Trace revealed in a separate analysis that global emissions from oil and gas production are up to three times higher than reported.
"The outcome of our calculations is truly frightening," Fiona Hauke, senior oil and gas researcher at Urgewald, said in a statement. "Oil and gas companies' short-term expansion plans are not in line with the net-zero emissions course put forward by the IEA. Keeping these oil and gas resources in the ground is the bare minimum of what is needed to keep 1.5°C attainable."
As the report points out, even "if the oil and gas industry simply maintained its 2021 production level of 56.3 bboe, it alone would exhaust our remaining carbon budget within 15.5 years."
Just over a dozen corporations—including Saudi Aramco, ExxonMobil, TotalEnergies, Chevron, and Shell—are responsible for more than half of the industry's short-term expansion efforts, Urgewald found.
But "oil and gas companies are not only planning rapid development in the short term," the report notes. "Their massive build-up of new fossil fuel infrastructure is threatening to lock the world into a high-emissions pathway" at a time when the window to slash greenhouse gas pollution and avoid the worst effects of the climate crisis is rapidly closing.
Fossil fuel giants, especially those in the U.S., have been "happy to take advantage" of global energy market chaos unleashed by Russia's late-February invasion of Ukraine, the report continues, channeling their record-breaking profits into boosting fracking and LNG export capacity.
"Current midstream expansion plans will more than double liquefied natural gas (LNG) export capacity globally, and new mega-pipeline projects like the Trans-Saharan pipeline would stretch across entire continents and beyond," says the report. "Such oil and gas infrastructure is expensive to build, and its intended operational lifetime spans decades—a time horizon we simply do not have."
Nearly 20% of LNG import terminals under development are located in Europe, which has been hit especially hard by soaring energy prices, but liquefied gas is "a false solution," warned Lucie Pinson from Reclaim Finance.
"The newly planned projects will come too late to solve Europe's energy crisis," said Pinson. "But what they will do is lock us into a high-carbon future and pose severe stranded assets risks. Private financial institutions must acknowledge the responsibility they hold and withdraw their support from new fossil infrastructure projects."
Urgewald and its partners identified 289 companies that are constructing new oil and gas pipelines or LNG terminals.
"As of 2022, new import and export LNG terminals with a total capacity of 1,391.5 Mtpa (million tons per annum) are planned or under development," states the report. "The increase in LNG export capacity would, if fully used, release almost twice as much greenhouse gas per year as all operating coal-fired power plants in North America, South America, Europe, and Africa together."
Urgewald's findings are based on its "Global Oil & Gas Exit List" (GOGEL), a company-level database that covers 901 firms responsible for 95% of global oil and gas production. Earlier this year, GOGEL data was used to expose dozens of "carbon bomb" oil and gas projects that fossil fuel giants are planning to build at the expense of humanity.
"The irresponsible, greed-addled expansion plans of oil and gas companies destroy local communities and whole ecosystems."
The newly updated GOGEL data was presented at COP27, where delegates have been informed yet again that, in the words of U.N. Secretary-General Antonio Guterres, "we are on a highway to climate hell with our foot still on the accelerator."
Two weeks ago, the U.N. published a series of reports warning that there is "no credible path to 1.5°C in place" and that only "urgent system-wide transformation" can achieve the 50% drop in global emissions required by 2030 to prevent locking in cataclysmic temperature rise approaching 3°C by century's end.
As the new Urgewald analysis makes clear, the opportunity costs of the fossil fuel industry's continued investment in oil and gas production are immense.
"If global exploration expenditure since 2020 had been directed towards the energy transition, it could have almost doubled the U.S.'s 2019 onshore wind capacity," the report points out. "Egypt, the host country of COP27, is the perfect example of the complete disconnect between the action needed and the reality on the ground. Fifty-five companies are exploring for new oil and gas resources across Egypt while the world's governments come together in Sharm El-Sheikh to address the climate crisis."
Earlier this week, Guterres slammed the duplicitous nature of many corporate climate promises, arguing that "so-called 'net zero pledges' that exclude core products [coal, oil, gas] are poisoning our planet. Using bogus 'net zero' pledges to cover up massive fossil fuel expansion is reprehensible. This toxic cover-up could push our world over the climate cliff."
According to Urgewald fossil fuel finance campaigner Katrin Ganswindt, "Over 20 European banks, insurers, and investors have published promising oil and gas policies" since GOGEL was launched, with eight of them publicly referring to the database. "But hundreds of financial institutions have yet to adopt strict, science-based exclusion criteria for oil and gas companies whose expansion plans are not in line with 1.5°C."
These "oil and gas companies are betting against our collective future," said Ganswindt. "Their behavior also creates a high economic risk, for their financial backers and for themselves. A financial institution that takes its net-zero commitments seriously cannot provide financing to companies that are recklessly busting our climate budget."
Last week, progressives urged U.S. President Joe Biden's Treasury Department to intervene after an investigation of the financial sector's net-zero commitments showed that the six biggest U.S. banks' climate targets and policies fall far short of what's needed to preserve a habitable planet. On Wednesday, another analysis found that major U.S. banks are responsible for one-third of oil and gas expansion projects currently underway.
As Urgewald's new report observes, "All over the world, from Uganda to the Philippines, local communities and activists are calling out oil and gas companies for their reckless expansion plans."
Omar Elmawi, executive director of Muslims for Human Rights and coordinator of the campaign to stop the EACOP pipeline, said that "the irresponsible, greed-addled expansion plans of oil and gas companies destroy local communities and whole ecosystems."
"They lead to persecution, displacement, and all manner of environmental and social harm," he continued. "African people do not want any of this. We demand the energy access and the just transition renewable energies can deliver. And we vehemently reject the prospect of another colonialist plunder of our home's natural resources at the hands of avaricious oil and gas corporations that corrupt governments and throw whole countries into chaos."
"Africa deserves better," Elmawi added. "Our planet deserves better."
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