Planned UK oil field unaligned with Paris goals: Report

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These are projects that risk taking the world well beyond climate limits and becoming stranded assets, with little or no economic value…reports Asian Lite News.

Amidst climate justice groups installing oil barrels at COP26 to say “no fossil fuels — not here, not anywhere”, a new analysis by Carbon Tracker released on Wednesday found the proposed deepwater Cambo oil field off Scotland is uneconomic and its future exploitation is incompatible with the Paris goal of maintaining warming at or below 1.5 degrees Celsius.

Carbon Tracker founder and executive chairman Mark Campanale said: “Cambo is uneconomic and would not be financially competitive in a well-below 2 degrees C world. Moreover, COP26 is showing the world the urgency of the climate crisis and if we are to ‘keep 1.5 alive’, this means this project is clearly amongst the first to fall by the wayside.

“The world has a great many existing oil projects that are lower cost and lower risk than Cambo and that are ahead in the financial pecking order. The IEA has said that ‘no new oil, coal or gas is needed’ in a 1.5C scenario and Cambo is blatantly one of those projects.”

The thinktank utilises oil demand using different IEA scenarios — linked to specific temperature policy goals — to understand oil and gas supply. A cost-curve approach is used based on data from Rystad Energy, allowing those oil and gas projects which fall outside of a given temperature outcome to be identified.

These are projects that risk taking the world well beyond climate limits and becoming stranded assets, with little or no economic value.

Based on Carbon Tracker’s modelling, the multi-billion-dollar Cambo oil field off Shetland has a breakeven oil price significantly higher than the marginal oil price under the IEA’s Sustainable Development Scenario (SDS, 1.65C).

Put another way, the project is only financially viable if the world fails to limit global temperature rise to well below 2C.

Prime Minister Boris Johnson outside the front of No10 Downing Street with the National Grid COP26 installation ahead of the start of COP26 in Glasgow. Picture by Andrew Parsons No 10 Downing Street

On the margins of the UN Climate Change Conference COP26, climate justice groups and grassroots groups brought oil barrels to oppose fossil fuel extraction.

Speakers at the venue talked about the dirty energy struggles around the world — from the Cambo oil field and new coal mine in Cumbria in the UK, to the LNG export project in Mozambique, to oil export facilities in the US and more.

They said that wealthy countries need to get their act together and come up with credible plans for concrete action to cut emissions, end reliance on fantasy techno-fixes and support a just transition away from fossil fuels.

The Cambo oil field is located about 125km to the west of the Shetland Islands, and contains more than 800 million barrels of oil.

The companies involved in its development are Siccar Point and Royal Dutch Shell, which was recently forced by a court ruling in the Netherlands to slash oil production in line with its net zero goals.

If approved by the Oil and Gas Authority, drilling at Cambo could start as early as 2022. And the field is expected to produce oil and gas for approximately 25 years.

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