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UPDATE 3-Oil bosses fight 'bad guy' image ahead of climate talks

Fri, 16th Oct 2015 13:47

* Oil firm CEOs call for effective deal at climate talks

* Fail to agree on carbon pricing system

* Promise to limit gas flaring, stop short of setting goals (Recasts, updates throughout)

By Ron Bousso and Bate Felix

PARIS, Oct 16 (Reuters) - Oil and gas industry bossespledged on Friday to curb gas flaring as they sought to boosttheir image in the climate change debate ahead of a UnitedNations summit later this year, but disagreed on putting a priceon carbon emissions.

The leaders of 10 companies that produce 20 percent of theworld's oil and gas recognised that current greenhouse gaslevels were inconsistent with a goal of limiting global warmingto 2 degrees Celsius over pre-industrial times, but stoppedshort of outlining goals to cut their own emissions.

The executives of eight companies held an unprecedentedjoint press conference in Paris, calling for an "effective"agreement at the U.N. summit in December, where negotiators fromalmost 200 nations will meet to try to forge a global climatechange agreement.

While promising to collaborate on limiting gas flaring atrefineries, they failed to find common ground on a mechanism forcarbon pricing, which leaders of seven European companiesadhered to earlier this year, saying it will encourage theprivate sector to use cleaner sources of energy and to developnew technologies such as carbon capture and storage (CCS).

"We have international oil companies and national oilcompanies and some of the nations have a different view oncarbon pricing as a group," BP chief executive officerBob Dudley said.

"We actually think this is the route that will allow us toallocate our capital and make our investments. It isn't writtenin the report because we wanted to bring a group togethercommitted to many of the other broader goals out there."

Officials who attended the leaders' discussions ahead of thepress conference said the heads of the national oil companies ofSaudi Aramco and Mexico as well of India's Reliance Industriespreferred not to include a reference to carbon pricing.

The rift will amplify an already deep divide betweenEurope's Total, BP, BG Group, Eni, Statoil and Repsol and their U.S.peers including Exxon Mobil and Chevron whostayed away from the initiative.

BAD GUYS

For many of the companies, this is a fight for the future ofthe oil and gas sector in the public debate as a rising numberof organisations and politicians call for minimising the use offossil fuels in favour of renewable energy such as wind andsolar power.

"Sometimes in all these discussions you have the impressionthat all fossil fuels are the bad guys. But the bad guys arepart of the solution," Pouyanne told a gas and electricitysummit in Paris on Thursday.

"Whatever people think, we still need fossil fuels. We needto make advocacy for gas. We need to explain to our policymakers that gas has to be encouraged," Pouyanne said.

"Policy makers are not convinced in many countries that gasis part of the solution for climate change, we in the industryneed to speak up."

The executives again urged governments to ditch coal infavour of less polluting natural gas, which emits around half ofthe CO2 coal does, in power plants and heavy industry.

Total chief executive Patrick Pouyanne said that a majorChinese oil and gas company he would not name will join thegroup by the end of the year.

BG Group's chief executive Helge Lund said that he hopedfurther companies would join to form a "critical mass to have amore visible position for solving the climate issue."

Diplomats gather in Bonn from Monday for the last formalsession ahead of the Paris climate talks in December.

The International Energy Agency forecasts oil will remainthe largest energy source by 2040, although its share willdecline while renewable sources of energy will grow.

All major emitting countries have now submitted plans to theUnited Nations detailing how much they plan to curb theiremissions.

For oil executives, pledges by key oil consuming countriesincluding China and India to cut fossil fuel consumption havecrystallised their need to act.

The World Bank estimates around 300 million tonnes of carbondioxide (CO2) is emitted from gas flaring each year, equivalentto around 77 million cars.

Critics say however that without clear goals to cut theiremissions, oil companies' efforts would have little impact.

Charlie Kronick of environmental campaign group Greenpeacesaid: "Their latest intervention contains nothing meaningfulthat will significantly aid the decarbonisation of the globaleconomy." (Additional reporting by Susanna Twidale in London, AnaMartinez in Mexico; Editing by Janet Lawrence and David Evans)

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