Paris Agreement Creates More Issues For Oil Industry
This opinion piece presents the opinions of the author.
It does not necessarily reflect the views of Rigzone.
A few weeks ago some 190 countries met in Paris to discuss ideas they believe will prevent global temperature from increasing no more than 2 degrees Celsius, or 3.6 degrees Fahrenheit. It is reminiscint of the age old story of man trying to manipulate weather.
At the conference, the countries agreed to prepare and maintain plans they supposedly will implement to reduce greenhouse gas emissions. Each country’s plan, called the Nationally Determined Contributions (NDCs), will be reviewed every five years starting in 2023.
The plans are not legally enforceable, and the report casts serious doubt that this plan is sufficient to prevent temperatures from rising more than 2 degrees C. Richer countries must provide at least $100 billion annually after 2020 to help developing countries reduce emissions.
Even though President Obama supports the agreement, the U.S. Senate must ratify and that probably is not going to happen for a variety of reasons. One such reason is the lack of binding commitments from countries like China and India previously in the Kyoto Protocol. The Senate overwhelmingly defeated ratification of Kyoto some 20 years ago.
The president cannot unilaterally commit the U.S. to binding emission-reducing targets. Any emission targets and timetables must be ratified by the Senate.
Obviously, this agreement is aimed at restricting the use of fossil fuels in the future. The plan suggests that oil and gas consumption should be limited. The International Energy Agency (IEA) projects worldwide oil demand will grow from 90.6 million barrels per day in 2014 to 95.9 million barrels per day in 2020 and then start to decline to 74.1 million barrels per day in 2040.
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