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Financial Times: Oil groups urge clarity on tackling emissions

By Ed Crooks in London and Sheila McNulty in Houston
Published: February 15 2008 02:00 | Last updated: February 15 2008 02:00

Three of the world’s biggest oil companies have called for governments to take a clearer lead on policies for curbing carbon dioxide emissions, warning that uncertainty will damage investment and destabilise energy markets.

However, there are still differences of opinion within the industry over how far policy should go.

Royal Dutch Shell, western Europe’s biggest oil company, yesterday spoke out on the need for agreement on fighting climate change following a similar call from Jim Mulva, chairman and chief executive of Conoco-Phillips, on Tuesday.

The companies have expressed their opinions on environmental policy in the past but are stepping up the pressure on US and European governments to act.

Shell set out its preferred scenario for energy over the next four decades, including measures such as an international price mechanism for greenhouse gas emissions, long-term support for renewable energy and regulations to increase energy efficiency.

Jeremy Bentham, who compiles Shell’s energy scenarios, said a world shaped by those policies would be “an improvement from an environmental and humanitarian point of view but also from our reputational point of view”. It would also be better for Shell, he said, because by providing greater stability in energy prices it would create the conditions for long-term investment.

Shell had publicised its scenarios “to have conversations with governments about how to bring about better choices”, he said.

That echoed Mr Mulva’s argument, made in a speech at the CERA Week conference in Houston, that oil companies “should take a seat at the table. Ideally we could then help shape the policies that are being developed even as we speak.”

Christophe de Margerie, chief executive of Total, also yesterday called for greater certainty on the future framework for CO 2

emissions.

“How can we invest for the long term, when we don’t know the rules?” he said. “What do we do if we don’t know what is going to happen in 2013? 2013 is tomorrow for us.”

All three companies want government support for investment to cut emissions, including costly new technologies such as “second generation” biofuels and power stations that can -capture and store their CO 2 emissions.

However, the oil companies are also critical of some policies aimed at curbing emissions. Shell attacked government support for first generation biofuels such as corn or wheat-based ethanol.

Mr de Margerie warned that curbing emissions needed to go alongside securing energy supplies.

Copyright The Financial Times Limited 2008

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