Last December, at the Paris climate conference, virtually all the countries in the world agreed to concentrate efforts to fend off a rise of over 2 degrees Celsius above pre-industrial levels in average global temperatures. Industry thought leaders posit that in order to reach this goal, over 66% of global coal, oil and natural gas reserves may remain untouched, unless there are new technological innovations in eliminating or lessening the harmful effects of carbon emissions. They suggest that it is imperative for energy companies to consider climate change policies when developing business strategies.

The International Energy Agency forecast that global oil demand could decrease more than 20% to 74 million barrels per day by 2040 if the global warming levels are kept at the agreed upon figure at the Paris conference, while oil companies project that global oil demand will keep growing. In order to reach the Paris global warming levels, governments will need to enable major shifts in technology and policy, such as developing advanced biofuels to produce renewable fuels without affecting food supplies; creating improved and more cost-effective batteries for electric cars and establishing recharging stations more extensively; and raising prices for carbon-based fuels in countries like the US to decrease demand, and promote carbon capture and sequestration. All of these shifts require changes in the political and technological landscapes. Oil companies are changing strategies for these shifts as well, such as financing research into carbon capture and sequestration, investing in biofuels and solar power, and working to reduce methane emissions.

Source: The New York Times