The Energy Industry Is Ready To Meet The Climate Change Challenge
The energy industry
is at the center of the climate change debate. We would never have been able to
get the CEOs of eight major international oil and gas companies to collectively
recognize the need to keep global warming below 2°C, as we did in Paris last
October, if there had not been a widespread realization of the issue's critical
importance. I am proud that we all managed to agree on making a joint
declaration that strengthens our commitment and makes it even more tangible.
As an energy producer and supplier, our mission for the
coming decades will be to meet the dual challenge of satisfying the world's
growing energy needs in a reliable and competitive way and helping to fight
against climate change. Around 40% of global CO2 emissions are attributable to
oil and gas-based products, so there is no doubt that this issue concerns us.
That said, in light of our technical and scientific capabilities, our
experience in the energy business and our human and financial resources, we are
convinced that we are part of the solution.
We need to integrate climate change into our strategy
In its 2°C scenario, the International Energy Agency (IEA) assumes
that worldwide energy demand will rise by 12% between 2013 and 2040, due
primarily to population growth and economic development. This is, in fact, a
low estimate that implies very major improvements in energy efficiency to keep
demand under control. Clearly, contributing to this movement by providing
products and services that help people reduce their consumption is a first area
for action.
On the supply side, the IEA scenario foresees a considerable
expansion in solar and wind power during the period, with an annual increase of
nearly 9% widening their share from 1% to 10% of the total energy mix. The IEA
also believes that oil and gas will remain in the picture and account for
nearly 45% of the energy consumed worldwide in 2040. This assumes that technologies
will have been developed to capture and store or transform carbon dioxide
within that time frame.
For a Group like the one I lead, these forecasts imply a number
of factors that we need to integrate into our strategy so that we can meet
these two challenges sustainably and simultaneously.
To start, we need to continue to invest in our core business –
oil – to offset the natural decline in output from currently operating fields
and serve customer needs, notably in the area of transportation. However, we
have to be increasingly selective in our oil-related investment projects,
because demand will contract under the 2°C scenario, requiring us to ensure
that our projects are among the most competitive in terms of production costs.
According to this scenario, not all of the planet's fossil resources will be
extracted – only the most competitive will. As Saudi Arabia's former oil
minister, Sheik Yamani, said: "The Stone Age didn't end for a lack of
stone".
Companies in the energy industry must contribute to the fight
against climate change
At the same time, companies in the energy industry must
contribute to the fight against climate change. This is our second challenge.
At Total, our vision and involvement are embodied in our "Committed to
Better Energy" baseline. There are five key avenues to achieving this
ambition:
·
Promoting the development of natural gas, the
least polluting fossil fuel. Producing half the emissions of coal in
electricity generation, natural gas is the ideal partner to renewable energies,
which are intermittent by nature. At the international level, I launched a call
last June with five other oil and gas industry leaders to implement carbon
pricing mechanisms. This tool will accelerate the necessary shift from coal to
natural gas. At Total, the share of natural gas in our output has grown from
around a third to half over the past ten years. In keeping with this movement,
we have decided to withdraw from all coal-based operations.
·
Investing in renewable energies. At Total, we have chosen to focus
on photovoltaic solar energy and biofuels. Our SunPower solar affiliate ranks
second worldwide and offers the most efficient technology. In another recent
example, we decided to convert our La Mède refinery into France's first
biorefinery to produce biodiesel and biojet fuel. Over the next few years, we
plan to invest more than $500 million a year in renewable energies, which will
account for at least 10% of our portfolio in 15 years' time.
·
Continuously improving energy efficiency, both
within the company and for our customers. At Total, we have set a target of
improving our facilities' energy efficiency by 1.5% a year over the 2012-2017
period. In addition, we reduced flaring of associated gas at our fields by 50%
between 2005 and 2014, and intend to completely phase out routine flaring by
2030. To help our customers lower their consumption and environmental impact,
we provide more than 70 products that have been awarded the EcoSolution label.
One example is polypropylene, a plastic that allows carmakers to reduce vehicle
weight, and therefore fuel consumption.
·
Facilitating universal access to cleaner, decentralized energy.Some 1.3
billion people worldwide still have no access to electricity and around twice
as many continue to rely on wood alone for cooking. Total has launched a vast
program to sell solar lamps, primarily in Africa. Known as Awango, the program
currently reaches nearly six million people. Our goal is to increase that
number to 25 million by 2020.
·
Participating in international initiatives to promote the reduction of
greenhouse gas emissions. The goals here are to collaborate on improving
technologies such as carbon capture and transformation; to participate actively
in global programs to set an internal carbon price, like the one championed by
the United Nations Global Compact; and to pursue our actions within the Oil
& Gas Climate Initiative, of which we are a founding member.
Collective awareness of the urgent need to address climate
change is a reality for our companies, and the agreement reached in Paris has
strengthened our commitment to integrating this factor into our strategies. I
am fully convinced that we energy producers and suppliers have a meaningful
role to play, as well as tangible solutions – some of them already on the market
– in responding to this global challenge of the 21st century.
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