Bloomberg Green reported that Saudi Aramco purposely under-reported its carbon emissions by as much as 50% to make itself look like a more attractive option to investors. Leading up to its much-anticipated IPO in 2019, the state-owned firm — also one of the world’s largest oil refiners — chose not to report figures from its refineries outside Saudi Arabia, such as in Malaysia, China, South Korea and Japan, under the argument that they were operated under joint ventures with local partners.
Instead, it repeatedly cited a study published in the journal Science, which ranks its oil operations as the second-cleanest in the world, behind only Denmark, even though reporting the true extent of its carbon footprint would have added around 55 million tonnes of CO2 to its tally and nearly doubled its emissions count. The firm is also planning to expand its refining capacity to about 10 million barrels a day by 2030, and Bloomberg said it would not have reported the emissions from the expansion under its previous reporting guidelines.
In response to the news, however, Saudi Aramco released a statement saying its “current disclosure reflects emissions from those assets where Aramco has the accountability and ability to manage and control emissions”, and that “it will begin disclosing direct emissions from its full global operations this year.”
Joe Biden cancels Keystone XL permit, shelves Alaskan drilling leases
New US President Joe Biden cancelled the cross-border permit needed for the controversial Keystone XL pipeline on his very first day in office, and the step could effectively kill the project that would have transported crude oil from Canada’s oil sands far up north to the Gulf Coast of the US. The $8 billion pipeline started construction in 2020 after being revived by the Trump Administration, but was vehemently opposed by environmentalists for the emissions intensity of the crude oil that it would transport.
In response to the cancellation, the Canadian province of Alberta — whose economy depends heavily on oil and gas jobs — said that it will pursue legal remedies and it may also sue the Biden administration for damages. Neighbouring province Saskatchewan even suggested sanctions against the US, while Prime Minister Justin Trudeau expressed his disappointment over the cancellation.
The Biden Administration also put a temporary moratorium on the sale of drilling leases in the Alaskan National Wildlife Refuge (ANWR), which the previous government had hastily pushed through in a last-ditch effort to open the pristine land to oil and gas drilling. Drilling in the ANWR was okayed despite persistent environmental opposition and lack of support from US banks.
Total exits American Petroleum Institute over differences in climate positions
French oil and gas giant Total quit the American Petroleum Institute (API), and, effectively, the US oil lobby, over its differences on the API’s positions on tackling climate change, carbon pricing, regulations on methane emissions and subsidies for electric vehicles. Its exit makes Total the first of the largest international oil drillers to opt out, and it may influence other drillers, such as BP, Royal Dutch Shell and Equinor to follow suit.
Yet, ExxonMobil and Chevron — two of the US’s largest drillers — are likely to continue their API membership. The API, while commenting on subsidies for electric vehicles, said it “does not support subsidies for energy”. However, the International Monetary Fund (IMF) had reported in 2017 that the US spent $5.2 trillion in subsidising fossil fuels — which was the equivalent of 6.5% of the global GDP that year.
Japanese bank uses green bonds to finance new coal plant in Vietnam
Japan-based JBIC (Japan Bank for International Cooperation) came under heavy criticism for financing the 1,200 MW Vung Ang 2 coal plant in Vietnam using money it raised through green bonds. The bank bizarrely classified it under its “development of quality infrastructure for environmental preservation and sustainable growth (QI-ESG)” fund and will invest $636 million in the project, even though the plant would emit several times more particulate matter, NOx and SO2 than is allowed under emission standards within Japan.
The fund, interestingly, has so far funded five natural gas power plants, compared to two wind power projects and one in solar panel manufacturing. Ulf Erlandsson, formerly with the Anthropocene Fixed Income Institute — that works as a climate watchdog for the international bond market — said the JBIC should be excluded from international bond portfolios for its misuse of Environmental, Social and Governance (ESG) principles, and that it was in the “frontrunner position for the most egregious greenwashing of the decade award.”
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