U.S. and Canadian firms were conspicuously absent Friday from an international oil company coalition that endorsed an international agreement to keep global temperatures from rising by more than 2 degrees Celsius.
At a news conference in Paris Friday, chief executives from 10 firms pledged to work together on technologies needed to reduce emissions, including carbon capture and storage and elimination of flaring and reduction of methane emissions from natural gas production.
The group stopped short of endorsing carbon pricing, although participating European companies gave their backing four months ago.
Many of the companies – including Royal Dutch Shell PLC, BP PLC and Total SA – have major operations in Canada's oil and gas sector.
And many of them have made submissions to the Alberta government, which is promising to unveil a new climate strategy prior to the United Nations climate summit in Paris in December. But there are no American or Canadian companies included in the Oil and Gas Climate Initiative.
There is a clear rift between the European companies and American oil giants, notably Exxon Mobil Corp., whose chief executive officer, Rex Tillerson, has questioned climate science and denounced his rivals' call for carbon pricing as "fake" and gimmickry. Exxon's subsidiary in Canada, Imperial Oil Ltd., is one of the country's largest oil and producers and refiners.
Mr. Tillerson's stance reflects resistance among conservatives in the United States, where the Republican Party is skeptical of efforts to conclude an international agreement and staunchly opposes President Barack Obama's policies to reduce emissions. The European firms are more in line with widespread support for climate action in their home countries.
That same range of opinion is evident in Calgary. Suncor Energy Inc. and Cenovus Energy Inc. recommend in their submissions that the provincial government increase the stringency of Alberta's carbon pricing on oil sands emitters – albeit slowly and carefully to protect competitiveness – while broadening the burden to the entire economy. "A carbon price is the single most effective way to change the investment and operating decisions that drive real emission reductions," Suncor states in its submission. "The time is right for a higher level of ambition in carbon policy stringency."
Meanwhile, Canadian Natural Resources Ltd. warns that the industry is already suffering and higher costs would drive away investment. The Canadian Association of Petroleum Producers (CAPP) avoids commenting on carbon pricing, which has become a partisan issue in the current federal election.
Asked about the commitment by international oil companies in Paris on Friday, CAPP focused on the need to invest in technological solutions.
"Technology is critical to getting Canada's oil and natural gas out of the ground responsibly in a low carbon future," CAPP president Tim McMillan said in an e-mailed statement. "The industry will continue to explore more opportunities today to reduce greenhouse gas emissions that build upon and enhance what we have already done."
Environmentalists say there has been a noticeable shift among some oil companies in embracing carbon pricing while others have been laggards.
"Carbon pricing is an idea whose time has come – it works in other jurisdictions," said Simon Dyer of the Calgary-based Pembina Institute, a Calgary-based think tank that advocates for a sustainable energy policy. "It's not surprising that leading companies in Alberta are calling for progress on this."
The Paris group was also clearly unable to find consensus on carbon pricing. Since June, the European firms have been joined by state-owned Saudi Aramco, Petroleos Mexicanos (Pemex) and India's Reliance Industries Ltd., one of the world's largest refiners. The assembled CEOs did call for an effective agreement to be concluded in Paris, one that would keep the world on a path to limit global warming to no more than two degrees above pre-Industrial Age average temperatures.
Critics suggest the oil companies are still not embracing the level of ambition that would be required to meet the two-degree goal. The public should remain skeptical until companies voluntarily reduce their emissions at a rate consistent with the target, and endorse calls to remove subsidies and tax incentives from consumers and producers alike, said Alden Meyer, policy director with the U.S.-based Union of Concerned Scientists, a science-based environmental group.