In a world that has never produced so much oil and gas, the United Nations is seeking to persuade producers they need to leave three-quarters of their reserves in the ground and explore cleaner energy to combat climate change.
“The fossil fuels we do use must be utilized sparingly and responsibly,” Christiana Figueres, UN climate chief, said in the copy of a prepared speech to the industry. “Three-quarters of the fossil fuel reserves need to stay in the ground.”
The UN is seeking to enlist industry support to cut carbon emissions as 194 countries stewarded by Figueres work to devise a new treaty to fight climate change by the end of next year. UN scientists said in September that the world since the industrial revolution has already emitted more than half the carbon that’s compatible with keeping temperature gains within a safe range.
“We have to stay within a finite, cumulative amount of greenhouse gas emissions in the atmosphere,” Figueres will say in the speech today to a London meeting of the IPIECA, the oil and gas industry association for environmental and social issues. “We have already used more than half of that budget.”
High-cost, high carbon projects are already hurting profits of fossil fuel companies, she said in the e-mailed speech.
Oil and gas companies risk holding “stranded assets” as rules to curb greenhouse gases make their investments obsolete, according to Figueres, executive secretary of the UN Framework Convention on Climate Change. The comments come three days after Exxon Mobil Corp. said its oil and gas reserves won’t lose their value as a result of carbon limits to curb global warming.
Treaty negotiators have set themselves a target of containing the temperature rise to 2 degrees Celsius (3.6 degrees Fahrenheit). The global average temperature has already warmed by 0.8 degrees since the 1800s.
Figueres’s remarks echo a speech to the coal industry in November in Poland. “If we continue to meet energy needs as we have in the past, we will overshoot the internationally agreed goal to limit warming,” she told coal companies on Nov. 18.
Today she will tell oil and gas producers they should promote a price on carbon making fossil fuel users pay for emissions, and diversify into cleaner energy production.
“The time for experimentation, for marginal changes and for conditional response is now over,” Figueres will say. “It is time for the oil and gas industry to truly lead with a principled response that ensures its appropriate and profitable participation in the energy mix of the future.”
Figueres said gas could be used as a bridging fuel between high-carbon coal and emissions-free renewables. It may also be used to help integrate renewable energy into the power grid.
The UN’s Intergovernmental Panel on Climate Change said in September that humans already emitted 1,890 gigatons of carbon dioxide between the late 19th century and 2011. To stand a 50 percent chance of keeping a 2-degree ceiling on the temperature rise, total cumulative emissions need to be capped at 3,010 gigatons, it said.
With annual CO2 emissions currently at about 35 tons, the remaining budget would be used up in 32 years, according to Bloomberg calculations. Global oil production in 2012 rose to more than 86 million barrels a day, an all-time high, according to the most recent data from BP Plc. Gas production also rose to a record that year.