Oil Companies Pledge $1B to Fight Climate Change
The new fund would aim to reduce greenhouse gasses, but critics say the expenditure isn't enough.
A coalition of 10 major oil companies announced the creation of a new fund that will invest $1 billion over the next decade in technologies aimed at reducing greenhouse gas emissions that are driving rapid climate change.
The Oil and Gas Climate Initiative, which includes companies such as BP, Shell and Saudi Aramco, said that its new OGCI Climate Investments fund would focus in part on reducing the industry's own methane emissions from natural gas and oil production.
The fund also would support efforts at carbon-capture technology, which might prevent emissions from being released by power plants, and work to improve industrial energy efficiency. The fund also aims to help development of more energy-efficient engines for the transportation sector.
"We are on the look-out for potentially game-changing technologies that could have a long-term impact on greenhouse gas reduction," OGCI said in a press release.
The fund's initiatives mostly seem aimed at reducing emissions from continued use of fossil fuels, rather than development of renewable energy sources such as solar and wind, though some of the individual companies are making investments in those areas as well.
In May, for example, Shell - Europe's largest energy company - announced the creation of its New Energies division, which will put $200 million annually in wind power, biofuels and other new sources in addition to $1.7 billion that Shell has already invested, according to the Guardian. Total, another of OGCI's backers, owns a controlling stake in solar energy company SunPower, and has invested as well in companies specializing in energy storage and battery development. Those technologies would bolster the use of renewables such a solar and wind, which generate energy intermittently.
The announcement comes the same week the Indian government proposed a $2 billion equity fund for clean energy, Reuters reported this week. The country has a goal of increasing its renewable energy output fivefold by 2022.
Shell Chief Financial Officer Simon Henry recently predicted that oil demand will peak in the next five to 15 years, which could put oil companies under pressure to diversify and find new sources of revenue. Other industry projections, however, see oil and gas demand continuing to rise for decades to come.
The oil companies' effort already has critics, who say it's insufficient. Jeremy Leggett, chairman of the Carbon Tracker Initiative, founder of Solar Century Holdings, told Bloomberg that the world needs to spend trillions of dollars each year in order to meet the goal of limiting global warming to 2 degrees Celsius.
The Energy & Climate Intelligence Unit noted that the OGCI investment is only half of what Microsoft co-founder and philanthropist Bill Gates personally has pledged for clean energy investment.
Seeker contacted an OGCI spokesperson in London via Skype, who said the organization was unable to respond immediately to the criticisms because the launch event was still underway.
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