Aligning an oil and gas companys reserves and future emissions with - PowerPoint PPT Presentation

Aligning an oil and gas company’s reserves and future emissions with a 2ºC science-based target A preliminary study of an oil and gas major Pedro Faria and Paul Griffin, CDP Richard Heede, Climate Accountability Institute Presentation to the International Conference on Fossil Fuel Supply and Climate Policy 26-27 September 2016, Queen’s College, Oxford

Remaining carbon budget & proved reserves Heede (2014) Tracing anthropogenic CO 2 and methane emissions to fossil fuel and cement producers 1854-2010 , Clima(c Chan ge, 122: 229-241. Heede & Oreskes (2016) PotenEal emissions of CO 2 and methane from proved reserves of fossil fuels: An alternaEve analysis, Global Env. Change , 36:12-20.

Top 20 companies: historic & potential emissions Company X : 1P reserves of 5.1 Mboe of combined liquids & gas � ~ 0.3 GtCO 2 e Scope 1 plus ~ 1.7 GtCO 2 e Scope 3 emissions.

Science Based Targets (SBT) → Sectoral Decarbonization Approach (SDA)

SBT Absolute Emissions (contraction) : Theory 1.00 Index (2012 =1) 0.75 0.50 Company A - contraction 0.25 World (IEA ETP 2DS) 0.00 2000 2010 2020 2030 2040 2050

SBT Scope 1+3 Emissions (contraction) : Example 350 MtCO 2 IEA 3P e 300 4DS P90+P 50 1P 250 1P 200 P90+P Historic 150 50 al IEA 100 2DS 50 0 1970 1990 2010 2030 2050 2015 1P Reserve estimate (5 Gboe = 2 GtCO 2 e): Company Filings; 2015 P90+P50 resource estimate (14 Gboe = 5.6 GtCO 2 e), 2015 3P Reserve estimate (23 Gboe = 9.2 GtCO 2 e): by Rystad Energy AS courtesy of Oil Change International.

SBT Emissions Intensity (convergence) : Theory 0.50 tCO 2 e/ boe 0.40 Base year 0.30 Company A - convergence 0.20 Company B - convergence World (IEA ETP 2DS) 0.10 0.00 2000 2010 2020 2030 2040 2050

SBT Scope 1+3 Intensity (convergence) : Example 0.40 0.40 0.40 0.40 BAU BAU BAU BAU tCO 2 e/ tCO 2 e/ tCO 2 e/ tCO 2 e/ boe boe boe boe IEA 2DS IEA 2DS Base year Base year 0.30 0.30 0.30 0.30 Base year Base year Convergence Convergence Convergence Path Path Path 0.20 0.20 0.20 0.20 Natural gas switching Natural gas switching (50%) (50%) Operational O&G efficiency Operational O&G efficiency Action Action (100%) (100%) 0.10 0.10 0.10 0.10 Biomass (10%) Biomass (10%) Remaini Remaini ng ng Wind (20%) Wind (20%) 0.00 0.00 0.00 0.00 2000 2000 2000 2000 2010 2010 2010 2010 2020 2020 2020 2020 2030 2030 2030 2030 2040 2040 2040 2040 2050 2050 2050 2050

Linking contraction and convergence 1,200 1,200 1,200 0.45 0.45 0.45 mmbo mmbo mmbo tCO 2 e/ tCO 2 e/ tCO 2 e/ 0.40 0.40 0.40 e e e boe boe boe 1,000 1,000 1,000 0.35 0.35 0.35 Intens Intens Intens 800 800 800 0.30 0.30 0.30 Renewa ity ity ity bles 0.25 0.25 0.25 600 600 600 Natural Natural Natural 0.20 0.20 0.20 gas gas gas 400 400 400 0.15 0.15 0.15 0.10 0.10 0.10 200 200 200 Oi Oi Oi 0.05 0.05 0.05 l l l 0 0 0 0.00 0.00 0.00 2000 2000 2000 2010 2010 2010 2020 2020 2020 2030 2030 2030 2040 2040 2040 2050 2050 2050 2015-2050 Cumulative emission : 8 GtCO 2 e 2015-2050 Cumulative emission : 8 GtCO 2 e 2015-2050 Cumulative emission : 8 GtCO 2 e IEA 2DS Budget : 10 GtCO 2 e IEA 2DS Budget : 8 GtCO 2 e IEA 2DS Budget : 8 GtCO 2 e

Conclusions • Companies can begin to plan transition around reserve lock-in • CCS provides a range of flexibility, but is not the solution • Oil and Gas companies need to follow contraction AND convergence SBT in order to continue growing

Next Steps • Extend analysis to 2100, e.g. RCP2.6 • Modified scenarios, e.g. 1.5-1.7 ⁰ C limit • Further considerations on company-level allocation: the carbon supply cost curve (CTI 2014) • Apply a levelized cost assessment.