Report: Climate Rules Could Put $1.1T in Oil Investment at Risk
LONDON, May 8 (Reuters) - Investors could spend up to $1.1 trillion over the next decade on oil projects and assets that never reach production if governments enforce measures to curb climate change, a report by Carbon Tracker Initiative said.
The Carbon Tracker report, released on Thursday, could help funds and other investors avoid putting their money in oil assets that remain buried forever.
The $1.1 trillion, around 15 percent of the decade's total global oil and gas spending at current rates, is earmarked for projects to 2025 that require a market price of at least $95 a barrel to break even.
That investment is at risk if governments enforce plans to curb the global rise in temperatures to 2 degrees Celsius, which scientists say is the threshold for avoiding the worst effects of climate change.
Almost 200 nations have endorsed that goal and are due in 2015 to sign up to cut greenhouse gas emissions to help meet it.
Those measures will cut demand for fossil fuels including oil and lower prices and revenues, according to the report.
"Gambling on a $95/bbl oil price on behalf of shareholders is risky, given that oil prices have dropped to $40 per barrel twice in the last decade," James Leaton, Carbon Tracker's research director, said in a statement released on Thursday.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- IEA Welcomes Return of Oil Surplus (Nov 14)
- IEA Urges OPEC to Open Taps as Oil Markets Enter 'Red Zone' (Oct 09)
- IEA Warns of Higher Oil Prices as Iran and Venezuela Losses Deepen (Sep 13)