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Why coal and gas producers have gone to war over climate change

A day before delegates arrived at the World Gas Conference in Paris on Tuesday the chief executive of French energy group Total, Patrick Pouyanne, summed up the event in just four words: "the enemy is coal".

Unlike many industry conferences comprising CEO-delivered Powerpoint presentations pitched at the investment community, the WGC prides itself as forum for the discussion of the broader issues facing the sector .

And this year it was abundantly clear that the dominant theme would be the promotion of gas as a cleaner alternative to coal in electricity generation.

Executives from Royal Dutch Shell, BP, Exxon and Perth-based Woodside Petroleum lined up to argue the production of gas would cut global carbon emissions and reduce air pollution in Chinese and Indian cities. The growing LNG supply from countries such as the US and Australia, they also argued, was a better match with renewable sources of power such as solar.

"Our industry has historically been too timid to address the shortcomings of coal, but now it's time for us to stand up and we need to stand united," Woodside chief Peter Coleman said.

The timing of the aggressive attacks on coal is no accident. In just over six months more than 200 nations will attend a United Nations climate change conference in Paris and attempt to hammer an agreement that results in a binding agreement to curb carbon emissions.

The big European producers underlined a more active role in the climate debate by also sending a joint letter to the UN last week supporting a global pricing system for carbon.

Such a system would just happen to push up the cost of burning coal, which remains the cheapest fuel for electricity generation.

source: http://www.afr.com