Energy Transition

What role should oil and gas play in tackling climate change?

Patrick Pouyanné
Chairman of the Board and Chief Executive Officer, TotalEnergies
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Future of the Environment

This post is part of a series of interviews on the impacts of climate change and the COP21 talks in Paris.

What are the key contributions your industry can make to accelerate action on climate change?

The oil and gas industry has a responsibility to contribute to the fight against climate change. We are part of the problem, but we can and must be part of the solution. What does that mean, in concrete terms? We, at Total, have decided to focus on five areas: promoting the share of natural gas in the energy mix; growing renewables; improving energy efficiency; providing universal access to clean energy, sometimes in innovative ways; and working together to improve low-carbon technologies and to create international climate frameworks.

Let’s begin with the first area: a quick win in the fight against climate change would be to replace coal with gas. We know that when it comes to power generation, gas emits half the CO2 of coal; gas is also a flexible and reliable source of energy. To get this process started, along with five other major oil and gas companies, this summer we called for the introduction of ambitious carbon pricing mechanisms.

The second area, increasing the role of renewables in the energy mix, might take a bit longer. But the forecasts are positive. For instance, in its scenario compatible with the +2°C target, the International Energy Agency forecasts the share of solar and wind energies in the total mix to grow from 1% in 2013 to roughly 10% by 2040. We’re helping lead the way there with our big push into solar power with our subsidiary SunPower.

The third area goes hand in hand with renewables: making the most of what we already have, doing more with less. Energy companies themselves can set a good example when it comes to energy efficiency. The World Bank’s Zero Routine Flaring Initiative – of which we, along with other companies in our industry, are a part – is a great start. But we also have a role when it comes to helping our customers become more energy efficient.

Access to energy is also an important issue – around the world, 15% of people lack access to electricity and 40% rely on traditional biomass for cooking. It’s up to our industry to provide universal access to affordable, reliable and modern energy services. Our Awango range – solar-powered lighting and phone chargers – is one example of this. So far we’ve helped 6 million people gain access to clean energy, and our plan is to increase that to 25 million by 2020.

Finally, as an industry, we must work together with partners from other sectors to improve technologies and to create international policy frameworks that will advance a lower carbon economy. There are already some great examples out there: the UN’s Carbon Pricing Champions and the Climate & Clean Air Coalition, both of which we joined. The Oil and Gas Climate Initiative is a good example of a climate initiative led by industry – our members collectively represent a fifth of all oil and gas production. Together, we recognize that climate change is a common concern and not a topic that should incite competition. Our ambition is to collaborate and go beyond the sum of our individual efforts.

What are the greatest challenges for businesses in your sector to overcome to tackle climate change?

To tackle climate change, our industry needs long-term policy frameworks in which carbon pricing plays a central role and direct capital towards lower carbon options. This will allow us to ensure that activities are commercially viable, aligning them with customer demand, stakeholder and shareholder concerns, and regulatory developments in different countries. Long-term visibility will allow us to understand the opportunities, manage the risks and take informed decisions to make effective and sustainable contributions in addressing climate change.

We understand the limitations and challenges this presents around individual levels of development: it is impossible to create a one-size-fits-all solution. Several carbon pricing mechanisms may coexist. We believe that each country or region must create its own mechanism and its own price, but that these systems should then be connected. Putting a price on carbon will incentivize the reduction of emissions on a larger scale and at a lower cost than alternative policies.

A global deal in Paris is an important step – what would you like to see next?

We have seen incredible momentum in the lead up to COP21, and I expect this to continue. We hope that the COP21 talks will convince public and private stakeholders that it is time to take a stand on climate change from both a political and business standpoint.

Even if no agreement on carbon pricing is reached, we nevertheless hope that the most willing countries can form “clubs” to quickly set up pricing mechanisms wherever possible, with the ultimate goal for these carbon pricing systems to be connected.

Author: Patrick Pouyanné, CEO, Total

Image: A view of the Kuala Lumpur city centre covered by haze in Kuala Lumpur March 3, 2014. REUTERS/Samsul Said

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Energy TransitionClimate ActionNature and Biodiversity
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