Business Maverick: Oil industry in Davos: torn between Greta and Trump

Business Maverick: Oil industry in Davos: torn between Greta and Trump By Reuters

2020-01-25 11:30:00 PM

Business Maverick: Oil industry in Davos: torn between Greta and Trump By Reuters

Oil majors are at the sharp end of the climate debate and face a bewildering balancing act to secure their futures.

It’s a Catch-22 situation: to meet ambitious emissions targets by investing in low-carbon technologies, they will have to rely on revenue from expanding their businesses in oil and gas, for which there is still growing global demand.On one hand, they must satisfy the big investors who are rewarding companies with progressive climate policies and dumping heavy polluters; yet on the other, they can’t risk cutting the generous dividends that keep shareholders sweet.

SA lockdown: Western Cape ready for Level 3 - Winde Union to take govt to court over schools reopening LIVESTREAM: Ramaphosa leads call for National Day of Prayer

How energy companies navigate this maze could determine the winners and losers in a lower-carbon future, and help govern whether the world can rein in warming. So no pressure, then.The confusion has been thrown into stark relief this week at the World Economic Forum in the Swiss ski resort of

Davos, where oil majors, state oil giants and ministers have been debating behind closed doors in their biggest gathering of the year.While climate activists, notably Greta Thunberg, have called for all fossil fuel production to be halted to avert catastrophe, U.S President Donald Trump has decried “prophets of doom” and hailed the economic importance of oil and gas.

“It feels like we are at the epicentre of this debate. We sit right there between energy needs and climate change,” said Al Cook, executive vice-president of Norway’s energy giant Equinor.“If you listen toDavosspeeches, you’ve got some people who say only economic growth and energy matter. Others ask to stop oil and gas immediately. We need to find a way to balance this but the challenge is that you cannot always be popular with either side,” Cook told Reuters.

CLEAN ENERGY: FRACTION OF CAPEXRepsol is at the vanguard of an industry climate drive, announcing this year that it plans to become carbon neutral by 2050. As a result, Norway’s wealth fund has doubled its stake in the Spanish energy firm.Equinor has meanwhile launched a target to reduce emissions to near zero in Norwegian offshore production by 2050, and is co-investing in a $10 billion wind farm in Britain, the world’s largest.

French oil major Total this year announced investments into one of the world’s largest solar power plants, in Qatar. It also plans to open 20,000 power charging points in the Netherlands and invest in planting millions of trees in Peru.Europe’s top oil firms have all set carbon reduction goals of various breadth. Shell has set out an “ambition” to halve “Scope 3” emissions by 2050 from fuels and products sold to customers rather than from its own operations.

Reuters reported this week that BP is also looking to significantly broaden its targets.Companies might tout green credentials to satisfy sustainable investors and activists, but how can they pay the bill?Fatih Birol the head of the International Energy Agency, the energy watchdog for industrialised nations, said the reality was that industry investments in clean energy represented a small fraction of their spending.

Dlamini-Zuma: Provision of water to schools to be prioritised IN PICTURES: First winter snow of 2020 hits Western Cape Call to allow taverns to sell alcohol for home consumption

“Last year only 1% of total capex went into clean technologies. But those investments will grow as companies have to balance their short-term profit goals with long-term social licence,” he said.“Some companies won’t need to borrow more, some companies may need to borrow more, but no company will stay unaffected by the energy transition.”

He said the industry would focus in coming years on reducing methane emissions from their own operations, which constitute 15% of all global greenhouse emissions.“This part can be done relatively inexpensively,” he added. “The more expensive part will include carbon capture and storage, offshore wind and increased use of hydrogen.”

THE TRUMP EFFECTAnother major challenge to climate action is a lack of a global consensus.In the United States, where Trump is encouraging oil and gas production and has exited the Paris climate deal, oil majors lag their European rivals on emissions goals. Chevron has set limited reduction targets while ExxonMobil has no targets.

A U.S. energy boom has helped make the country one of the world’s biggest gas flarers.“No-one has been able to fill the previous political leadership role on climate change that was played by the U.S. in the past,” said Majid Jafar, chief executive of UAE-based Crescent Petroleum.

Jafar argues that if the world replaced all coal with gas, it would achieve the Paris climate target of by keeping global warming to well below 2 degrees Celsius. The problem is that the biggest coal consumers, China and India, would need incentives to switch from cheaper coal, he said.

Birol also said coal-fired plants were the main global source of emissions. “The problem is how to address this coal issue without hurting those developing countries.”“The efforts of the West will be futile without bringing on board Asia and Africa, which are driving the growth in energy demand and emissions,” Jafar added.

Tobacco ban under court scrutiny this week Covid-19: Africa has come together to face its challenges – Ramaphosa Criminals target personal protective equipment at schools

Richard Herrington, head of earth sciences at London’s National History Museum also said a speedy energy transition may simply be impossible.“If the UK were to turn tomorrow all of its cars into electric ones, we would need twice the world annual cobalt and half of annual copper production,” he said. “You can imagine what happens if you scale it up to the whole world.”

(Reporting by Dmitry Zhdannikov; Editing by Pravin Char) Read more: Daily Maverick »

BUSINESS MAVERICK: WEF: Corruption is a state of mind, and of the stateTransparency International has confirmed something we all know: globally, corruption is not improving. But for the first time, it has also examined the correlation between political funding and the index outcome. No surprises here either: the correlation is high. As for SA? Same old, same old. Tell that to this corrupt thieving ANC government! From a school in Namibia on the walls of Namibia’s Home Affairs.

MAVERICK LIFE: Last week in pictures – 25 January 2020MAVERICK LIFE: Last week in pictures – 25 January 2020 By Maverick Life Editors

Motsepe's comments to Trump cause outrage on social mediaIn a clip shared on social media, Motsepe praises Trump during a meeting at the World Economic Forum in Davos. Oh please as if Daddy D Trump really gives two stuffs about this Shaithole country. noone loves bullies like trump mr sundowns I’m not outraged. I respect Trump as a business and president. He might be lil bit rough on the edges, but he is not racist

Trump, back from Davos, denounces Senate impeachment trialUS President Donald Trump fulminated against his impeachment trial on Thursday as Democrats prepared to resume making their case to the Senate on why he should be removed from office.

Prince Charles sings Greta Thunberg’s praisesPrince Charles has made climate change his mission – much like Greta Thunberg.

WATCH: Eskom tops list of SA investor concerns at WEFFinance Minister Tito Mboweni has responded to concerns about a smaller government delegation in Davos. its such a relief not have that taxi driver Jabu Mabuza who wears a spotty to board room meetings and parliament sitting their and making all South Africans look like monkeys PresidencyZA PresidencyZA KhuselaS Julius_S_Malema AldrinSampear FloydShivambu I am shocked!