Biggest fossil fuel extractors warned they risk wasting $2.2tn ‘in a low-carbon world’
Major oil and gas companies have invested $50bn (£40.6bn) in fossil fuel projects that undermine global efforts to avert a runaway climate crisis, according to a report.
Since the start of last year, fossil fuel companies have spent billions on high-cost plans to extract oil and gas from tar sands, deepwater fields and the Arctic despite the risks to the climate and shareholder returns.
Carbon Tracker, a financial thinktank, found that ExxonMobil, Chevron, Shell and BP each spent at least 30% of their investment in 2018 on projects that are inconsistent with climate targets, and would be “deep out of the money in a low-carbon world”.
Oil refinery plant at night
Andrew Grant, the 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.”
The study is the first to analyse individual projects to test whether they are compliant with a 1.5C world, and whether they would be financially sustainable in a low-carbon world.
It found that none of the largest listed oil and gas companies are making investment decisions that are in line with global climate goals, and risk wasting $2.2tn (£1.8tn) by 2030 if governments take a tougher stance on carbon emissions.
Last year Shell said it would spend $13bn on a liquefied natural gas project in Canada and ExxonMobil agreed to invest $2.6bn in the Aspen project in Canada, the first greenfield oil sands project in five years.
“Investors should challenge companies’ spending on new fossil fuel production. 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,” Grant said.
The report contradicts the public rhetoric of many oil executives who have claimed to support the Paris goals and vowed to invest in renewable energy projects.
Read more: The Guardian