The Road to Cleaner Power

The Road to Cleaner Power

How Total, a leading oil and gas company, is making climate solutions a core business
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Senior Vice President, Sustainable Development & Environment Total

Some argue extractive companies are dinosaurs that will soon become extinct because climate change will force them out of business. This view clearly misses some important nuances.  Oil, gas, and coal are likely to remain critical energy sources for years to come. Plus, a growing number of extractive companies are radically transforming their businesses so that they can not only survive but thrive in the coming decades. Total is one such company.

Can an oil company have a credible voice in climate change debates?

Some say oil companies are the problem, but we know from our experience that we can be a central part of the solution—and our executive team is committed to this. Being a major means we have the global understanding and the technological expertise needed to develop solutions that not only mitigate climate change but that also make economic sense.

How important are Total’s investments into climate efficient sources of energy?

Supporting the direction of the energy transition is a clear focus . Natural gas—which emits half as much carbon as coal when used for power generation—now accounts for half our production, compared to a third a decade ago. So we are as much a gas company as an oil company. We are also making major solar investments, in countries from South Africa to Chile. In 2011, we became the majority shareholder of SunPower, a leading solar company based in the USA which develops technology, builds facilities, and operates high-tech solar projects. Beyond this significant solar positioning, a quarter of our $1 billion plus annual R&D budget is earmarked for clean tech, including carbon capture and storage.

What is Total doing to reduce its carbon footprint?

In 2008, we set a public objective to reduce greenhouse gas emissions by 15% by 2015. We are ahead of schedule, achieving a 20% reduction last year. Between 2005 and 2013, we cut routine gas flaring—a significant source of greenhouse gas emissions—by 40%, with a goal of eliminating it by 2030. At the same time, we are increasing energy efficiency in our facilities.

Do you consider the emissions generated outside your operations?

Absolutely. To put it into perspective, while we emit 50 million tons of carbon a year, emissions related to the use of our products amount to 500 million tons. So we have developed a special label to highlight products such as lubricants and fuels that are more efficient than the market average. We are also invested in consumer education, which is critical, so we’re running information campaigns in retail stations, helping consumers learn how driving practices can promote fuel efficiency. We partner with innovators such as car-sharing start-ups OuiCar and BlaBlaCar in France. We are also involved in the BioTfueL, an important R&D project, which is seeking to convert biomass, such as straw, forest waste, and dedicated energy crops, into biofuels.

Is the company collaborating with others in climate initiatives?

Recognizing that we cannot solve climate change alone, Total’s ambition is to promote change throughout the industry. We are part of three major global initiatives: we support the United Nations Global Compact’s call for companies to factor an internal carbon price into investment decisions; we were the first company to sign up to the World Bank’s planned Zero Routine Flaring by 2030 Initiative; and we are joining the Climate and Clean Air Coalition, which works to measure, manage, and mitigate methane emissions. We are also a founding member of the Oil & Gas Climate Initiative, working with Saudi Aramco, Pemex, ENI, BG Group, and Sinopec to share industry best practices, advance technological solutions and catalyze meaningful action and coordination on climate change.

This may sound counterintuitive, but would a carbon tax be good for your business?

Actually, given our strategy on climate change, it is not contradictory. Since 2008, we have factored a long-term carbon price of €25 per ton into all investment decisions. We have long supported a price for carbon, as long as whatever instrument is used—whether carbon trading or a tax—is global, progressive and non-distortive. We believe that for the industry to be an effective contributor to the climate change solution, global, simple, and stable regulatory clarity is essential.

Do you worry about the possibility of stranded assets?

We do not see a “carbon bubble”. The energy sector has to contribute to the fight against climate change, while meeting increased energy demand. The International Energy Agency expects fossil fuels to meet 75% of this demand in 20 years from now. Even in its 2°C scenario, oil consumption in 2035 will be close to today’s, with gas consumption around 20% higher while existing oil and gas production capacity will have dropped by about 50% due to the natural fields decline. So we need new oil and gas production capacity. Markets understand this and are rationally pricing future risks.

As an oil and gas company, what is unique about Total’s approach to climate change?

Firstly, CSR, and by extension climate change, is fully integrated into our business strategy.  When we develop our upstream projects we fully integrate this dimension, looking for shared value. We have developed one of the world’s largest access-to-energy programs, designed to deliver affordable, replicable energy solutions to 50 million people in the next decade. We also work more and more with global institutions and associations to optimize the benefits of our programs. This cooperation is necessary. The world is changing and we are changing with it.

Anita Marangoly George, Senior Director, Energy & Extractives Global Practice, World BankThe gas flared every year equates to more than Africa’s annual electricity consumption. The World Bank is working with governments, oil companies, and development partners to stop wasting this gas  and put it to productive use. Total has been an exemplary ally in this effort from the very start. Anita George Senior Director, Energy & Extractive Industries Global Practice, World Bank Group

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COMMENTS

  • Enobong Udom says:

    Total remains one of the best E&P companies in the world. Using best available techniques in meeting world energy needs.

    I commend their approach in making all their operations and facilities energy efficient; hence reducing carbon emissions across business functions.

    As an energy engineer, I love it when organisations approach global climate challenges from the energy efficiency stand point. Keep the flag high Total and I hope I get the chance to work in this great organisation someday.

  • Mfon Akpan (Nigeria) says:

    I must commend Total’s disposition and commitment towards delivering better and cleaner energy to the world, i believe development wouldnt be totally sustainable if the energy that drives it isnt clean. As a graduate of Environmental Technology, it is my hope that someday i would have the priviledge of contributing my quota towards this Global challenge…… Welldone TOTAL…..

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