The Financial Times

The Paris Agreement: Have Oil Companies Got The Memo?

By David Powell, associate director, environment, at the New Economics Foundation (NEF). This article has been cross-posted from NEF.

If you’re the boss of BP, Chevron or Shell, how worried are you right now? 

171 governments put pen to paper last week, formally signing the Paris Agreement on Climate Change. The New York event was an encouraging, albeit largely symbolic, confirmation of December’s commitment to limit temperature rises to two degrees or lower.

The world has spoken; the science is clear; the likes of Mark Carney continue to warn about the economic risk of drilling like there’s no tomorrow. Paris provokes a very simple acid test: most of the world’s known reserves of oil, coal and gas will have to be kept in the ground – and you can forget prospecting for more.

There’s only one problem: oil companies don’t seem to have noticed.

Fracking Making Its Way Toward the UK

To date, opposition to hydraulic fracturing (“fracking”) for unconventional oil and gas in the United Kingdom (UK) has been fierce. The opposition, though, seems to be meeting deaf ears in England, according to recent news reports. 

Bloomberg reported on Dec. 4 that England's Energy Secretary, Ed Davey, wants to lift the country's currently exisiting moratorium on fracking. The halt was put in place after drilling sites owned by Cuadrilla Resources caused two minor earthquakes in northwestern England in November 2011.

England's Chancellor of the Exchequer (a position equivalent to the Secretary of the Treasury in the United States), George Osborne, is set to release Britain's new energy plan on Dec. 5 and told Bloomberg he wants to ensure “Britain is not left behind” in the unconventional oil and gas boom.  

“Cuadrilla estimates that the area it is exploring in Lancashire, in northwestern England, could contain 200 trillion cubic feet of gas—more gas than all of Iraq,” explained Bloomberg. John Browne, the scandal-ridden former CEO of BP, sits as the Chairman of the Board of Directors of Cuadrilla. 

Osborne, The Independent recently reported, will also offer tax breaks to oil and gas corporations hungry to profit from England's shale gas prize. 

“Mr. Osborne hopes that tax breaks for shale gas extraction will encourage investors and help economic growth,” The Indepedent wrote. “Oil and gas are currently taxed at between 62 per cent and 81 per cent. Shale gas would be taxed at lower rates.”

An astounding 64-percent of the English countryside could soon be subject to fracking, which is over 34,000 square miles, according to The Independent

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