The global push for action on climate change has put the long-term predictions of major energy companies in an oddly contingent light. Investors want to know about their long-term assumptions, but it is difficult for anyone to forecast how the wrangling over international climate policy will pan out; not to mention complex debates over peak oil, future price levels, and their interaction with the wider economy.
Not everyone is happy with how the oil majors are making their forecasts. FairPensions, a UK campaign currently urging investors in BP and Shell to seek clarification on oil sands investments, argues that the companies are not adequately considering the effects of environmental policies, high oil prices, and changes in demand, as their briefing for investors shows. The economic argument has focused on the assumptions that the companies use for their long-term outlook on oil prices, demand, and the likely effect of climate legislation.
A look at a few of the oil majors’ recent remarks does suggest they very much favour a business-as-usual scenario in their own long-term outlooks, rather than one that foresees either a sharp change in oil pricing or strong action on climate change.
