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The Top 5: 8 of the World’s Largest Oil Companies Responsible for 20% of GHGs

03.09.17 | Blog | By:

Happy Thursday friends!  Here’s my weekly take on the five most interesting developments in future fuels and vehicles trends over the last week:

  1. Eight of the World’s Largest Oil Companies Responsible for 20% of all GHGs: A report from the NGO CDP notes that these companies were responsible for a third of emissions from oil and gas. From the transport perspective, what does that mean? For the U.S., not much for the next four years, especially since EPA Administrator Pruitt does not believe CO2 contributes to climate change and climate-change related regulations are being rolled back or relaxed. To the rest of the world that are currently beginning to plan and execute the implementation of strategies under the Paris Agreement, maybe a lot.
  2. Asian Air Pollution Wafting to the West (and Even East) Coast: If you thought Asian air pollution is an Asian problem, you’re wrong. A new study published this week showed that air pollution from India, China and other Asian countries such as Japan and South Korea, has been wafting across the Pacific Ocean over the last 25 years. This has contributed to increased ozone levels on the West Coast. Maybe the fuels and vehicles industries, especially those highly impacted by stringent regulations in California and elsewhere on the West Coast, ought to strongly advocate for air pollution mitigation strategies and stronger regulations in these countries as a way to reduce compliance costs and the regulatory burden at home.
  3. White House Slashing EERE Budget: Apparently the White House is seeking to cut hundreds of millions of dollars from the Department of Energy Office of Energy Efficiency and Renewable Energy (EERE), currently funded at US$2.1 billion a year. My friends at EERE aren’t taking it well.
  4. Diesel Car Bans Continue: The European-based NGO T&E noted this week that Barcelona will ban all cars older than 20 years old from 2019, while a court has ordered Munich to develop plans by the end of this year for banning diesel-fuelled cars. The beat goes on.
  5. Everything You Wanted to Know about Autonomous Vehicles: Summed up in an infographic from Visual Capitalist.

1. Bloomberg: Eight Fossil Fuel Majors Seen Polluting as Much as the U.S.

Eight of the world’s largest oil companies are responsible for as much of the climate-damaging pollution spewed into the atmosphere as the entire U.S. according to a report released this week by CDP and reported in Bloomberg. Saudi Aramco, Exxon Mobil Corp., OAO Gazprom, the National Iranian Oil Co., BP Plc and Royal Dutch Shell Plc were among the eight companies whose fuel was responsible for a third of emissions from oil and gas. The companies released a fifth of all GHGs outside of farming and forestry since 1988, the year most governments acknowledged man-made climate change as a risk, according to CDP. The chart below compares the eight companies against other companies and the rest of the industry.

CDP analyzed 50 oil and gas companies, gauging their direct emissions and pollution from the use of their products dating back to 1854. The whole oil and gas industry combined produced about 40% of the world’s 832 gigatons of CO2-equivalent released in the past three decades. The chart below, pulled from the CDP report, shows the top 25 companies analyzed.

What caught my eye in the Bloomberg report was the following statement, “The findings suggest policymakers may be better off focusing on the practices of companies instead of national environmental policies.” From the transport perspective, what does that mean? For the U.S., not much for the next four years, especially since EPA Administrator Pruitt does not believe CO2 contributes to climate change and climate-change related regulations are being rolled back or relaxed. To the rest of the world that are currently beginning to plan and execute the implementation of strategies under the Paris Agreement, maybe a lot. One statement from the CDP report provides a clue that is relevant: “As we move towards 2050, oil and gas companies will need to demonstrate diversification into other sources of primary energy, such as renewables.”

2. USA Today: Air Pollution in Asia is Wafting into the USA, Increasing Smog in West

If you thought Asian air pollution is an Asian problem, you’re wrong. A new study published this week in journal Atmospheric Chemistry and Physics and featured in USA Today showed that air pollution from India, China and other Asian countries such as Japan and South Korea, has been wafting across the Pacific Ocean over the last 25 years. Read more about it here.

3. Bloomberg: White House Pushes for Deep Cuts to Clean Energy Office

Apparently the White House is seeking to cut hundreds of millions of dollars from the Department of Energy Office of Energy Efficiency and Renewable Energy, currently funded at US$2.1 billion a year. The White House is looking to slash its budget by a third, or $700 million.  Another source told Bloomberg the cuts could even be more severe at $1.4 billion. Gutting the program would likely face opposition in Congress, as the agency contributes funding to Energy Department labs that are considered job creators in Republican and Democratic districts alike.

I happened to talk to a friend in EERE right as news of this was made public and the mood was glum. “They just don’t realize what a budget cut like that really looks like. Thousands of jobs are supported by this work, and now, many will lose their jobs [which is rippling through the industry]. I thought Trump was supposed to be the jobs President?” My friend went on to note that even if the Trump Administration didn’t support climate change initiatives such as the Paris Agreement, for the sake of competitiveness, the U.S. should continue funding R&D. “If R&D is gutted like this, who else is going to have the ability to de-risk investments in [bioenergy and other technologies]?” We’re all about to find out.

4. Transport & Environment (T&E): Two More Cities Target Diesels

The European-based NGO T&E noted this week that Barcelona will ban all cars older than 20 years old from 2019, while a court has ordered Munich to develop plans by the end of this year for banning diesel-fuelled cars. Both cities struggle with air quality: Barcelona breaches WHO limits and Munich breaches EU limits. The decision to ban older cars in Barcelona is not specifically aimed at diesels, T&E says, but will clearly affect diesels.

The joint initiative between the city, municipalities on the edge of Barcelona, and the state of Catalunya will make it illegal on working days to drive cars bought before January 1997 and vans bought before October 1994. Although the ban on older cars does not come into effect until January 2019, if there are periods of high air pollution in 2018, the older cars can be temporarily banned. The city says around 7% of cars and 16% of vans in Catalunya will be affected.

The order in Munich came following an action brought by T&E’s German member DUH, which complained that the state of Bavaria had breached EU limits in two places. Bavaria’s highest administrative court ruled March 1 that the state and the city of Munich have until the end of the year to draw up clean air plans that include bans on diesel cars when necessary. At the same time, there is a national lawsuit undergoing consideration that will determine whether banning a category of cars is consistent with German road traffic rules.

I continue to think car bans will be a major air pollution and climate change mitigation strategy and has the potential to impact both fuel and vehicle demand. The mayors of Paris, Madrid, Athens and Mexico City announced plans in December 2016 to take diesel cars and vans off their roads by 2025. Other cities such as Stuttgart, New Delhi, Bangalore, Curitiba and Oslo are also implementing similar strategies. In other words, these actions should not be viewed as isolated events occurring in a handful of cities. Cities are increasingly going to view bans as a way to mitigate congestion. See this interesting article from the New York Times on congestion mitigation pricing and self-driving cars that discusses another way to manage traffic — though those kinds of strategies haven’t always been popular in the West.

5. Visual Capitalist: Everything You Wanted to Know about Autonomous Vehicles

Autonomous vehicles were first contemplated in the 1920s as a new infographic from Visual Capitalist shows. Read more about it and view the infographic here.

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