How oil industry can mitigate effects of climate change in the wake of Paris pact

A labourer works at a coal factory in Changzhi, Shanxi province, China. Coal is the leading fuel pollutant. PHOTO | REUTERS 

By GEORGE WACHIRA

In Summary

• Fuel dealers should also invest in renewable power in efforts to curb global warming.

Use of fossil fuels — coal, oil and gas — produces carbon dioxide which causes global warming.

The Paris Climate Change forum last December was all about targets and commitments by various countries to reduce carbon emissions to mitigate global environmental threats.

The oil companies are key climate change stakeholders since oil and gas are their principal tools of trade across the petroleum value chain — production, processing, and end-use.

Carbon emissions are encountered at every stage of this value chain making the oil industry a potentially critical player in climate change solutions.

Oil and gas shall remain a major fraction of global primary energy mix for many decades to come. The issue is how the oil industry adjusts their business models to accommodate targeted reduction of fossil fuels use while maintaining their balance sheet values.

It is also about how they positively support and participate in various climate change government policies and programmes to meet national and global climate change targets.

Over the past two decades the oil industry has mostly lived in self-serving denial in respect of climate change, sometimes claiming that it was a hoax not sufficiently supported by science.

Specifically in the US, the indifference to Kyoto Protocols by the Bush government and the oil lobby delayed the engagement of the mainstream American oil firms in global climate change efforts.

The Obama administration has, however, subtly mainstreamed climate change efforts in US and globally, climaxing with the Paris pact.

The EU has also put in place climate change policies, strategies and regulations that have enveloped the oil industry into climate change participation over the past 10 years.

The global oil industry has expressed support for the Paris forum deliberations, and “climate change challenges” now appears to be a routine agenda in various global and regional oil industry forums.

In months to come it will be expected that individual oil companies will internalise climate change in their corporate philosophy to signify “green” care and commitment, the same way they have emphasised commitment to safety and environment since early 1990s.

Thereafter, the oil sector is expected to incorporate individual climate change solutions in their business planning.

Coal is the worst offender in emissions while natural gas has the least carbon. It is expected that the oil industry shall “cautiously” support policies that replace coal with natural gas, especially in power generation and heavy industries.

However, the main green competitor for oil and gas is renewable energy — solar, wind, geothermal.