Total is slashing expensive oil ventures in line with international efforts to hold global warming below 2C. This the company is doing by reducing its exposure to tar sands and avoiding the Arctic ice pack.
In a strategy paper published to coincide with Tuesday’s AGM, the company cited the 2C goals in the clearest industry acknowledgment to date, of the risks of unfettered exploration:
“The 2C scenario highlights that a part of the world’s fossil fuel resources cannot be developed. Total’s growth strategy takes this into account.”
When deciding where to drill, it assumes a carbon price of US$30-40 a tonne, raising the bar for industry action on climate change.
In a foreword, chief executive Patrick Pouyanne emphasised the significance of the Paris Agreement in shaping the company’s business plans.
The firm is basing its investment decisions around the International Energy Agency’s 2C scenario. That still sees oil and gas making up nearly half the energy mix in 2035.
Pouyanne also aims to ramp up renewables, notably solar and biofuels, to form 20% of the company’s portfolio in 20 years’ time.
Total’s intervention follows rival Shell’s unveiling of its first ever 2C-compatible energy outlook while Exxon and Chevron are next in line.
Scientists estimate a third of proven oil reserves and half of natural gas are unburnable, to stand half a chance of holding global temperature rise below 2C.