Report: Big Oil Is Spending ‘’Too Much’’ On New Oil Production
Big Oil plans to spend nearly US$5 trillion in capital expenditure over the next decade, much of which would go into adding new production. Yet this money will also bring the world farther from the Paris Agreement climate targets, a report from energy industry-focused nonprofit Global Witness warns.
The organization analyzed a report compiled by the International Panel on Climate Change last year and then compared the data with the spending plans of the oil and gas industry. What it found was that investment in any new oil and gas field development was “incompatible with limiting warming to 1.5°C.”
This is the lower target set in the Paris Agreement for the rate at which the Earth warms. The higher and preferable target is 2°C, but it is the less realistically achievable one. The 1.5°C target, however, may be achieved if a lot of things change fast, the IPCC report concluded last year.
Yet Global Witness did not stop there. The organization also calculated that current oil production should be cut by 9 percent and gas production should be reduced by 6 percent if the 1.5°C goal is to be achieved. It also noted in its report that all of the energy industry’s US$4.9-trillion capex planned for the next ten years was “incompatible with limiting warming to 1.5°C.”
The argument runs as follows: if the world is to limit the rise in the average global temperature to 1.5°C, work must be done to reduce its reliance on oil and gas. If this work is successful, all these trillions Big Oil plans to spend on production expansion will be the worst spent money ever. If the work on limiting the rise of temperatures fails, the planet will continue heating up at unacceptably high rates with a slew of adverse consequences hitting mankind.
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