Oil Majors Worth More Adopting 2° C Pathway

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Originally published on Lenz Blog.
By Karl-Friedrich Lenz

“Oil majors are worth more adopting a 2° C pathway”

That’s the title of a slide Carbon Tracker CEO Anthony Hadley used in a recent speech. Here is a picture of that slide. You can see it in this Youtube video, around 14 minutes in.

hadley

This is probably a reference to the May 2016 Carbon Tracker Sense and Sensitivity study, which makes the point that refraining from investing in high cost oil projects makes economic sense, as well as sense for the climate.

I can’t really say, since he doesn’t spend much time explaining this particular slide.

The headline “Oil majors are worth more adopting a 2° C pathway” is of course exactly in line with Phaseout Profit Theory. If true, fossil fuel companies should join forces with climate advocates. That would not be without influence on their lobbying efforts. The fossil fuel industry could stop trying to distort the facts.

However, I am not sure that Hadley also agrees with the angle presented here. The “Sense and Sensitivity” report looks at the cost of developing new projects. Phaseout Profit Theory looks at the impact on prices of reduced supply.

But clearly, both aspects are not contradicting each other, but rather reinforcing. If Exxon listens to Carbon Tracker and cancels all of their high cost investments, that will eventually lead to less supply. That in turn will, all other things equal, lead to higher prices.

Reprinted with permission.


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