French oil form Total rules out Arctic oil drilling, citing 2C goal

Desdemona Despair

[cf. Leave fossil fuels buried to prevent climate change, study urges – ‘We’ve binged to the edge of our own destruction’]

By Megan Darby
24 May 2016

(Climate Change News) – Total is slashing expensive oil ventures in line with international efforts to hold global warming below 2C.

The French oil major is reducing its exposure to tar sands and avoiding the Arctic ice pack. When deciding where to drill, it assumes a carbon price of US$30-40 a tonne.

That was revealed in a strategy paper [pdf] published to coincide with Tuesday’s AGM, in the clearest industry acknowledgment to date of the risks of unfettered exploration.

“The 2C scenario highlights that a part of the world’s fossil fuel resources cannot be developed. Total’s growth strategy takes this into account,” the document stated.

In a foreword, chief executive Patrick Pouyanne emphasised the significance of the Paris Agreement in shaping the company’s business plans.

“COP21 was definitely a watershed,” he said. “Despite the current instability worldwide, 195 countries managed to unite around an ambitious climate agreement. That sends a strong message.”

The firm is basing its investment decisions around the International Energy Agency’s 2C scenario. That still sees oil and gas making up nearly half the energy mix in 2035.

But “strict investment discipline is vital,” Pouyanne said, to avoid wasting money on costly resources that may be surplus to requirements.

He also aims to ramp up renewables, notably solar and biofuels, to form 20% of the company’s portfolio in 20 years’ time. [more]

Total rules out Arctic oil drilling, citing 2C goal