To combat climate change without curbing economic and social development, the carbon intensity of the fossil fuel mix must be reduced. At Total, this is one of the three key focuses of our climate strategy. As an energy source that produces less carbon emissions than other fossil fuels, natural gas is one of the keys to the energy transition.
Why it matters
To limit the scale of global warming, temperatures must be prevented from rising by more than 2°C above pre-industrial levels by 2100. The principal cause of climate change is the release of greenhouse gases, coming partly from the burning of fossil fuels (coal, oil and gas).
Under the 2°C scenario set out by the International Energy Agency (IEA), oil and gas will continue to cover about half of energy needs worldwide by 2035. In order to meet the demand for energy while combating climate change, the share of coal in the fossil fuel mix1 must be reduced.
As the world’s fourth largest oil and gas company, we have a responsibility to be part of the effort to take on this dual challenge. That is why we have set ourselves the goal of becoming the leader of responsible oil and gas by reducing the carbon intensity of our own fossil fuel mix to a minimum. Steps to promote natural gas and increase its share in our output will spearhead this strategy.
1 The term energy mix refers to how final energy consumption breaks down by primary energy source.
Developing an assertive strategy in gas
Not only is natural gas an easily accessible and abundant energy source offering a perfect fit with renewables, but it is also far and away the least polluting fossil fuel. When used to generate power, it releases almost half as much CO2 as coal. It is for this reason that we ceased all coal production in August 2015.
We are the global benchmark in natural gas, operating along the entire natural gas chain on five continents. Over the past ten years, we have doubled our production of natural gas and continue to invest heavily in this area. Today, we are also among the world leader in liquefied natural gas (LNG) and aim to double our production capacity by 2017.
To maintain the advantage that gas offers over coal, however, methane emissions must be limited, as methane’s global warming potential is much higher than that of CO2. We are continuing our efforts to reduce our methane emissions from the production and transportation of gas, which represent today less than 0.5% of our marketed operated production. We are also firmly committed to our partnership with the Climate and Clean Air Coalition, an association supported by the United Nations that aims to improve methane emission measurement and reduction methods across the industry.
Speeding up development of carbon capture and storage technologies
Another way to limit CO2 emissions in the atmosphere involves capturing the CO2 at the source and storing it underground or valorizing it. This technology is called carbon capture, utilization and storage (CCUS).
We are involved in a collective effort to evaluate the real potential of this technology in the fight against climate change and make it effective, safe and feasible on a large scale. A pioneer in this area, we invested heavily in the Lacq Pilot Project and contribute to other initiatives elsewhere in the world, in particular in Norway.
Encouraging global initiatives
A collective response is needed to meet the challenges of the 2°C scenario. Implementing carbon pricing, eliminating routine flaring and managing methane emissions will require public and private sector participation. To speed up progress, Total is actively involved in these areas, through international organizations and initiatives.
Since November 2014, we have supported the U.N. Global Compact’s Business Leadership Criteria of Carbon Pricing initiative, which aims to encourage industry to incorporate carbon pricing into its investment decisions and promote this practice. Since 2008, we have applied a carbon price per metric ton of CO2 released. As a result, we factor in a carbon price of USD 30 to USD 40 per metric ton of CO2 released to all our new investment projects today.
Alongside six other companies, we played a key role in June 2015 in the launch of Paying for Carbon, a call to governments to introduce a carbon pricing mechanism to discourage high carbon operations.
Since March 2016, Total has been an active member of the CPLC, whose objective is to encourage governments, civil society and industry to share experience and work toward the implementation of carbon pricing.
In November 2014, we were the first oil and gas company to join the World Bank’s Zero Routine Flaring by 2030 initiative, which aims to eliminate flaring of associated gas at oil production sites. In an effort to meet this challenge, we have set ourselves a target of reducing routine flaring by 80% over the 2010-2020 period.
In November 2014, we were the first energy company to join the Climate and Clean Air Coalition, a partnership between governments and industry to improve the methods for measuring and controlling methane emissions from natural gas production.
Advocating for carbon pricing
Clear economic signals over the medium to long term are vital to reduce greenhouse gas emissions. Since 2008, we have encouraged the development of carbon pricing mechanisms in the major economic regions.
A price of between USD 30 and USD 40 per metric ton of CO2 would be enough to:
- Promote the switch from coal to gas.
- Steer investment toward the technologies required to reduce emissions, such as carbon capture, utilization and storage.