Exxon Mobil’s $41bn deal to acquire XTO Energy, the US natural gas producer, is the biggest energy deal of the year. It provides a decisive answer the question of whether Exxon needed a big strategic move to sustain its growth.
For Exxon, long the most sceptical of all big oil companies about climate change, the deal marks something of a U-turn. For just as last week’s round of bidding for Iraqi oilfields showed companies betting against a decisive outcome in the climate talks at Copenhagen, Exxon’s move for XTO is in part a play on the likelihood that that the US will make further moves to curb greenhouse gases.
On Tuesday the politicians take over at Copenhagen, which helped account for the febrile atmosphere on Monday. On Wednesday the most gruelling part of the whole fortnight begins, with heads of government and other senior politicians booked in for more than 36 hours of speeches, from Wednesday lunchtime to past midnight on Thursday. Felipe Calderon, the president of Mexico, and Kevin Rudd, the prime minister of Australia, get star billing on Thursday morning. Luiz Lula da Silva, president of Brazil, must be feeling at little apprehensive as he has to follow Mahmoud Ahmadi-Nejad of Iran, who has a tendency to cause uproar.
FT Energy Source is posting a daily question for our panel of expert commentators. Below are responses from panel members Vivienne Cox of Climate Change Capital, Lord Browne of the Royal Academy of Engineering, Jeremy Leggett of Solarcentury, Julian Morris of The International Policy Network and Kyoto carbon markets architect Graciela Chichilnisky.
There was progress last week on technical matters such as forestry credits, technology transfer and, importantly, the EU’s fast-start financing commitment – but now that the ministers have arrived, Copenhagen talks are getting down to the central issues of binding emissions agreements and long-term financing. Was last week largely a waste of time?
Vivienne Cox: Of course it has not been a waste of time. What has been done so far is extremely important – and so is the gathering of interests that turn up to these processes where networks are established and reinvigorated. The first week has also flushed out people’s positions and now there is a better idea about what it possible.
On FT Energy Source:
- China no longer wants money for climate change
- The REAL draft text
- Copenhagen catch-up
- Bad behaviour, not bad science
- Iraq, Nigeria and LNG in Spot news
- Copenhagen diary December 13: Got a badge?
- Copenhagen: The story so far
- Are financial instruments the right tool for developing countries?
- The EU’s fast-start financing offer
- Valero’s jatropha adventure
- Getting power from coal without digging it up
- The new Wall Street-bashing climate change bill
- George Monbiot finds a sceptic conspiracy
- Geothermal projects close in Switzerland and California
Oil-stealing drug cartels in Mexico
- Shale gas and water explained
AP’s Seth Borenstein and several of his colleagues have read all the stolen emails from the University of East Anglia’s Climate Research Unit and concluded that, while they don’t show the scientists concerned in a particularly flattering light, the emails don’t actually show evidence that data was manipulated:
Some e-mails expressed doubts about the quality of individual temperature records or why models and data didn’t quite match. Part of this is the normal give-and-take of research, but skeptics challenged how reliable certain data was.
One of the most disturbing elements suggests an effort to avoid sharing scientific data with critics skeptical of global warming. It is not clear if any data was destroyed; two U.S. researchers denied it.
They note that some emails show “a stunning disdain” for climate change sceptics, including an ill-judged attempt at wry humour over the death of one prominent sceptic.
He Yafei, China’s vice foreign minister and most senior climate negotiator, told the FT on Sunday that his country would not be demanding funding from the developed world to help it combat climate change. This is just as well, as US climate change envoy Todd Stern has emphatically ruled out any US aid for China, saying China was wealthy enough to fund its own efforts.
However in the same interview, Mr He voiced concerns that rich countries were preparing to blame Beijing if the Copenhagen talks failed.
China has long feared being blamed for the failure of climate talks – far more so than, say, many US Congress members.
Having left the first week to their envoys, ministers from many countries arrived at Copenhagen over the weekend to begin getting down to the nitty gritty of an agreement. Reuters reports that the ministers made little progress on Sunday. Heads of state arrive later in the week, but the arrival of the ministers alone mean some of last week’s attendees will be excluded from the Bella Center this week.
How the commitments so far stack up: Not good
And just how far do commitments so far get us towards limiting climate change to 2 degrees (let alone the 1.5 degrees sought by small island nations)? Not far, according to the Climate Interactive project, which said that comments from Japan on Friday that its previously-stated emissions targets were based on ‘ambitious goals being agreed by all major emitters’ actually shifted its forecast climate change outcome higher – from 3.8 degrees to 3.9 degrees. While the meeting is far from over, The Times reports grimly that if world leaders fail to agree the 25 – 40 per cent emissions cuts (from 1990 levels) recommended by the IPCC, the commitments may not be reviewed until 2015 or 2016.
While delegates in Copenhagen are trying to hash out an deal to reduce carbon, oil companies in Baghdad over the past two days have swiftly agreed to several huge contracts that will extend the hydrocarbon age for decades to come.
The fierce competitiveness with which the world’s biggest oil companies elbowed each other aside for the chance to develop some of Iraq’s biggest oil fields could not have sent a clearer message: Oil is here to stay, with or without an agreement forged at Copenhagen.