Letter to Rex Tillerson 13-10-29 Tide is Turning

7/27/2019 Letter to Rex Tillerson 13-10-29 Tide is Turning

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October 29, 2013

Douglas A. GrandtPO Box 6603

Lincoln, NE 68506

Office of the ChairmanMr. Rex Tillerson & StaffExxonMobil Corporation

5959 Las Colinas Blvd.Irving, TX 75039Re: Autumn Arrived -- The Tide is Turning Toward Transition

Dear Mr. Tillerson & Staff of the Chairman,

Yesterday, I promised to send several documents. They areenclosed herewith, and demonstrate one more time, that the

tide of public and private sentiment is turning to thecessation of burning carbon-based fuels.

David Suzuki is putting his reputation on the line with

a trail of his Climate & Energy Manifesto -- the sameideas Ive been writing you since early Spring, 2012.

Climatologist James Hansen has written yet anotherpaper promoting a revenue neutral carbon fee.

States and provinces are continuing to move towardsynchronized programs that will eventually price oil,coal and gas into economic extinction.

Large institutional investors and superannuitants arebanding together to demand transparency from you.

All while individuals across the nation continue to

demonstrate widespread resistance to expansion ofthe infrastructure and processes that perpetrate thedeadly extraction and transport of fossil fuels.

I implore you to read and seriously weigh what theenclosures convey: You and your colleagues will begoing the way of the dinosaurs if you do not reinventyourselves as renewable energy companies.

Reinvent -- Replace Refineries with Renewable

Encl.: David Suzuki - Suzukis Manifesto

James Hansen - David vs Goliath

Pacific Coast Action Plan on Climate & Energy press release and Agreement

Ceres press release and promotional graphic with investor logo identification

Ceres letter to fossil fuel executives, addressee list & investor signatory list

Responsible-Investors - Is the Tide Turning on Big Carbon?

InsideClimate News - Wall Street Demands Answers from Fossil Fuel ...

Guardian - Fighting the Fuel Giants for a Fully Renewable Future

Fortune - Investors Sound the Alarm on Climate Change

CNBC - This Could be Exxon Mobils Biggest Threat

I will continue to remind you aboutyour speech at the Boy Scouts of

America Annual Meeting in May(video http://bit.ly/rex-main-thing ).Imagine yourself the captain of aship of state leading a change ofcourse toward a world of life-preserving carbon-free energy.
http://bit.ly/rex-main-thinghttp://bit.ly/rex-main-thing


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http://trialofsuzuki.ca

Im David Suzuki. I stand here today as an elder, beyond the temptations ofmoney, fame or power. I have no hidden agenda but to speak the truth.

Human beings and the natural world are often too beautiful for words. Ivespent much of my career filming the wonders of nature and our place in it many times words would fail me. As I near the end of my life, I am amazed at

how much power, technology, wealth and consumption humanity has acquired,and that has transformed our lives while at the same time undermining the verylife support systems on which our existence and well-being depend air, water,soil and food, photosynthetic activity and biodiversity.

Now, my grandchildren are the joy of my life, but I know how uncertain theirfuture is and all the baubles of our consumer society cannot compensate forthe rich wonders and generosity of nature. But you dont have to be moved bythe beauty of the world to understand that we depend on it utterly for our veryexistence. My postwar generation and the boomers who followed lived likekings and queens as we partied as if there was no tomorrow, never worryingabout the kind of world we were leaving for our children. Well, the partys over.

Human beings and the natural world are on a collision course If not checked,many of our current practices put at serious risk the future we wish for humansocietyNo more than one or a few decades remain before the chance to avertthe threats we now confront will be lost and the prospects for humanityimmeasurably diminished A great change in our stewardship of the earth andthe life on it is required if vast human misery is to be avoided and our globalhome on this planet is not to be irretrievably mutilated.

Those words are taken from the World Scientists Warning to Humanity, fromNovember 1992, over two decades ago. It was signed by over 1,700 senior

scientists from 71 countries and included more than half of all Nobelprizewinners.

Since the World Scientists Warning, scientific study after scientific study hasdocumented the perilous state of the atmosphere, oceans, forests, vanishingspecies, toxic pollution and the unanticipated consequences of powerful newtechnologies.

______________________________________________________________________The Trial of Suzuki! Suzukis Manifesto! Page 1 of 3
http://www.facebook.com/l.php?u=http%3A%2F%2Ftrialofsuzuki.ca%2F&h=TAQHrXIw4AQHARK9jGcOhN7f2DgxEWMTsQpA2Tt5Dsfn0xw&s=1http://www.facebook.com/l.php?u=http%3A%2F%2Ftrialofsuzuki.ca%2F&h=TAQHrXIw4AQHARK9jGcOhN7f2DgxEWMTsQpA2Tt5Dsfn0xw&s=1http://www.facebook.com/l.php?u=http%3A%2F%2Ftrialofsuzuki.ca%2F&h=TAQHrXIw4AQHARK9jGcOhN7f2DgxEWMTsQpA2Tt5Dsfn0xw&s=1


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Now we stand on the edge of a precipice that is of our own making. In less than100 years, we have managed to lose sight of our absolute dependence onnature, and our responsibility not to foul our own home. We congratulateourselves for growth, expansion, technological advances, and profits, and welive with the illusion that our inventiveness enables us to keep the economy

growing without limit.

Canada has been near the head of the line when it comes to growth and profitsin the world. And the tyranny of the belief that the economy is what mattersmost to the country has transformed us to a point where we can hardlyrecognize ourselves. George Monbiot writes Canada: a liberal, cultured,decent country has been transformed into a thuggish petro-state. I believethis is who we are. A country that in spite of everything science tells us, whatthe changing weather tells us, is determined to squeeze every bit of oil out ofthe ground to grab the last of the profits to feed an addiction that we know isdestroying a future from coming generations.

Governments and corporations are not just failing us, they are the drivingforces that are taking us to the brink, wilfully ignoring the consequences andthereby committing what can only be called an intergenerational crime. Theconsequences of their actions and inaction will reverberate forgenerations. Wilful blindness is an indictable ofence as is criminal negligence,but intergenerational crime is so recent a concept that we have yet to developthe legal mechanisms to act. Our so-called leaders must be held accountable.

This accountability must extend to every citizen of Canada. We have failed ourchildren and our planet because of our fear of change and our fear of thefuture.

I accuse corporations, including the automobile, energy, pharmaceutical,chemicals, and agricultural sectors; of putting profit and growth before all elseincluding the survival and health of society. That their corporate lobbying issetting our countrys agenda is shameful.

I accuse Canadian politicians of intergenerational crimes. Their actions willafect our grandchildren, and their grandchildren.

I accuse Canadian corporations and government of immoral activity withdevastating consequences for the poorest, most vulnerable nations on the

globe.

I accuse Canadas politicians and its citizens of wilful blindness, of failing to beinformed about critical issues that they have the power to influence and offailing to take action when they are aware of avoidable ecological crises.



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If my country refuses to exonerate me, then it stands guilty of failing to defendits vaunted claim of freedom of speech. If my words are judged treasonous,then so be it.

With my carbon manifesto, I aim to stop these crimes:

1. Fossil fuels as our primary energy source are over. Within a generation theymust stay in the ground. That means exploration and subsidies to the fossilfuel industry end now.

2. Save the earths largest carbon sinks: Canadas Boreal forest and our oceansmust be protected.

3. Seventy per cent of our energy must be renewable energy within onegeneration.

4. A carbon tax of $150 per tonne starts now.

5. Canadian climate scientists must be able to share their findings uncensoredand unimpeded by political and corporate interests.

I hereby ofer a manifesto pledge:

Human beings have become so powerful that we are altering the biological,chemical and physical properties of the planet on a geological scale. We mustlook to the future, and science rather than politics or economics must be ourguide.

I know our dependence on fossil fuels must end.

I know it will take massive change for us as a species to survive let alone thrivein the converging global crisis around climate, food, water, fuel and theeconomy.

I pledge to stop the epidemic of blame around the climate crisis and recognizemy own responsibility.

The way I live my life is part of the problem.

I believe we need a new vision for our future as Canadians and as humans.

I pledge that I am ready to implement change. I want to be part of the solutionnot part of the problem.

I stand with the Carbon Manifesto. This is our way forward.



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David vs Goliath

21 October 2013James Hansen

I could not help thinking of David vs Goliath yesterday as I was working on a letter to JoseManuel Barroso, President of the European Commission. The subject was that discussed in an

earlier note (Europe Standing Tall Against a Rogue State): will the tax that Europe applies tounconventional fossil fuels in its Fuel Quality Directive (FQD) be the proper tax to account for

all the emissions during the mining and processing of the fuel or will they pretend that it is thesame as conventional oil?

It matters -- a lot. If total emissions are counted, oil from tar sands or tar shale will be lesscompetitive in the market. If a rising fee on carbon is achieved, these dirtiest of fuels will be the

first to be eliminated and replaced by clean energy and energy efficiency. Tar sands production

today is moderate, but there are plans to quintuple the rate of extraction over the next decade.Tar sands operations today are ugly enough, but if that expansion happens and infrastructure is

put in place to carry the products away, there surely will be a monstrous rape of the land. And

from the climate standpoint, we cannot accept the massive carbon amounts in unconventionalfossil fuels without guaranteeing climate disasters. Conventional oil and gas should be thetransition fuel to a clean energy future, and they could be that, if we put a rising fee on carbon.

"David" in this case was the Friends of Earth Europe contingent, a small determined middle-agedlady supported by a few young people. Outcome of our European trip to five capitals seemed too

good to be true, and maybe it was. The European Commissioner for Climate Action, Connie

Hedegaard, indicated a determination to have honest accounting of emissions from all fuels. Theofficials of most key nations seemed to be very understanding and supportive -- so it seemed that

the vote should go the right way. But wait -- will there be a vote?

"Goliath", the fossil fuel industry, does not have much to fear in the well-oiled coal-fired U.S.Congress. Maybe it's not much different in Europe. Fig. 1 shows some of the big-boy lobbyists,

just those of a single U.S. law firm celebrating the first anniversary of its Brussels office.

Goliath, for all his size, likes to work behind the scenes - but you can see his work in the daytimetoo - just turn on your television to see all the messages about safe dependable tar sands and coal.

Perhaps the United States, as well as Canada, will side with unconventional fossil fuel interests.It would not be the first time that spoken concerns about climate change turned out to be

greenwash. But this need not prevent Europe from standing tall.

This is not meant to discourage you. "David" can win this eventually, but we need many Davids.

David's chief weapon needs to be exposing the truth. We must expose what is happening.Although the present Canadian administration seems to be a handmaiden of the fossil fuel

industry, it is not certain that the same is true for the Obama administration. The fossil fuelindustry will lobby the Obama administration to pressure Europe to accept dirty oil as clean, and

it will lobby Obama to approve the Keystone pipeline. The basis for optimism is the fact that the

matter has been exposed. There is reason to hope that John Kerry will advise Obama to notapprove the pipeline. Surely they understand their legacies, if the pipeline is approved.


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A Houston-based law firm celebrating the first anniversary of its Brussels office (NY Times, 19 Oct.).

However, we must recognize that all individual fossil fuel matters -- tar sands pipeline, coal

trains and port facilities for export, hydro-fracking, mountaintop removal, etc. -- all of these are

overwhelmed by the need for a simple, rising, across-the-board carbon fee collected at thedomestic mine or port-of-entry. Without a carbon fee, any success in stopping a fossil fuel

project will be short-lived. With a rising carbon fee, we will eventually win on all of these

fronts, with the highest carbon sources falling into disuse first.

For that reason, Citizens Climate Lobby deserves the highest priority -- and I am very distraught

that I forgot about my scheduled time to be on their monthly call last evening. I apologize to

anyone who was expecting to ask me questions, and I hope that we have another opportunity.

Everyone who wishes to preserve our planet and its life should consider joining and supportingCitizensClimateLobby.org. Their advocacy of a simple rising carbon fee, with 100% distribution

of funds to the public -- nothing to make the government bigger -- is just what is needed toincentivize a transition to clean energy. Their respectful but thoughtful demeanor is perfect.

I would like to write some more about why it is so essential to stick assiduously to the CitizensClimate Lobby approach, and also write something about other "Davids" (some good news about

Our Children's Trust), but I will save that for later. I just want to get this off this evening, to

apologize to Citizens Climate Lobby for the snafu last evening.

Jim

(attached is the letter drafted last evening, with the aim of soliciting scientists to co-sign -- it will

be sent to Jose Manuel Barroso, President, European Commission, B-1040 Brussels.

Opinions of European scientists would seem particularly relevant.)


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Scientist letter on the Fuel Quality Directive and tar sands

We are scientists involved in many different areas of climate science. We write to you to

recommend that EU policies recognize and account for higher emissions from production of

unconventional fossil fuels. Such policies will encourage investments in low-carbon fuels andtechnologies consistent with the worlds limited carbon budget and will encourage companies

and states to leave the most carbon-intensive fossil fuels in the ground.

We live in an era during which it has become clear that we cannot burn all of the fossil fuels

without causing dangerous climate change, as the latest Intergovernmental Panel on Climate

Change report has made clear. Instead, we must leave a substantial amount of the fossil fuels in

the ground and move to cleaner sources of energy. Policy-makers now have a paramountresponsibility to ensure that happens. Your decisions today will affect the kind of planet future

generations will inherit.

We understand the Commission is currently considering a new proposal on the implementation

of the 2009 EU Fuel Quality Directive (FQD). This law set an emissions reduction target and

gave the European Commission a legislative mandate to develop a methodology to account forgreenhouse gas (GHG) emissions from the production of fossil fuels.

The Commissions 2011 proposal to implement the requirements for fossil fuels used a

scientifically sound approach to label the significant variations in the GHG intensity of differentfossil fuel feedstocks, including higher values for fuels such as coal-to-liquid, tar sands, oil

shale and gas-to-liquid. Since the FQD requires companies to report on the GHG emissions ofthe fuels that they place on the European market using these different emission values, the FQD

will for the first time hold the oil industry accountable for the carbon emitted during production

of the fuels they sell on the European market. This accountability will send a much needed signalto oil suppliers to invest in cleaner fuels. We therefore urge you to continue with the

implementation based on this scientific approach.

We are at a time in history when it is still possible to minimize the effects of climate change by

making fossil fuels pay their full costs to society and thus accelerate a shift to cleaner energy.

The consequences of your decision on the FQD as one part of Europes climate actions willreach far beyond Europes borders. We urge you to uphold the scientifically sound proposal in

order to ensure Europes climate legislation is fully implemented and that Europe maintains its

leadership on climate action.

Yours sincerely,

Xxx


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For Immediate Release

October 28, 2013

Offices of the Governors of California, Oregon

and Washington

Office of the Premier of British Columbia

PACIFIC COAST ACTION PLAN ONCLIMATE AND ENERGY

BRITISH COLUMBIA, CALIFORNIA, OREGON & WASHINGTON

JOIN FORCES TO COMBAT CLIMATE CHANGEWest Coast Leaders Commit to Accounting for the Costs of Carbon, Clean Fuel

Standards, Other Clean Energy Priorities for Region of 53 Million People

SAN FRANCISCO The leaders of British Columbia, California, Oregon and Washington signedthe Pacific Coast Action Plan on Climate and Energytoday, committing their governments,and a region that represents the worldsfifth largest economy, to a comprehensive and far-reaching strategic alignment to combat climate change and promote clean energy.

California Governor Edmund G. Brown Jr., Oregon Governor John Kitzhaber, WashingtonGovernor Jay Inslee were joined at Cisco SF by British Columbias Premier Christy Clark,

who participated via TelePresence from Victoria. BC Environment Minister HonourableMary Polakattended in person.

Through the Action Plan, the leaders agreed that all four jurisdictions will account for thecosts of carbon pollution and that, where appropriate and feasible, link programs to createconsistency and predictability across the region of 53 million people. The leaders alsocommitted to adopting and maintaining low carbon fuel standards in each jurisdiction. In ajoint action plan, the leaders committed to meaningful coordination and linkage betweenstates and provinces across North America.

This Action Plan represents the best of what Pacific Coast governments are already doing,and calls on each of us to do moretogetherto create jobs by leading in the clean energy

economy, and to meet our moral obligation to future generations, saidGovernor Inslee.Each of the governments here is already taking bold steps on climate change; by joiningforces, we will accomplish even more," Inslee said.

Flanked by supportive business and labor leaders, the governors and Premier redoubledtheir commitment to growing the regions clean energy economy. The region covered by theAction Plan has a combined GDP of $2.8 trillioneffectively the worlds fifth largest economy.


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Oregon supports the Action Plan because we are already seeing how our commitment toclean energy is changing the face and fortune of our state, accounting for $5 billion ineconomic activity and 58,000 jobs, said Governor Kitzhaber. The debate is over. Thescientific community no longer disputes that climate change is happening and human-caused.But regardless of where you stand on this question, theres another good reason to act:transitioning to a clean economy creates jobs, Kitzhaber said.

Under the Action Plan, California and British Columbia will maintain their existing carbonpricing programs along with their respective clean fuel standards, while Oregon andWashington have committed to moving forward on a suite of similar policies. The leadersfurther agreed to harmonize their 2050 greenhouse gas emission targets and develop mid-term targets where needed to set a path toward long-term reductions.

California isn't waiting for the rest of the world before it takes action on climate change,

said Governor Brown. Today, California, Oregon, Washington and British Columbia are alljoining together to reduce greenhouse gases, Brown said.

The leaders pledged to cooperate with governments and sub-national governments around

the world to press for a global agreement on climate change in 2015.

Taking action to address climate change in our own capitals is an important first step, said

Premier Clark.By supplying cleaner energy and associated technologies to help othersreduce their emissions while growing the economy and creating jobs at home, our generationhas an opportunity to lead on the world stage. This agreement signals we are ready toinnovate and work together to achieve a healthy, strong, and secure future, Clark said.

Business leaders hailed the Action Plan as an important milestone and a boost to efforts fornational and international policy change.

Our company is seeing significant growth on the Pacific Coast, and it is encouraging that the

trend is concurrent with this landmark accord, said Steve Clem, Vice President of SkanskaUSA in Portland, Oregon, one of the ten largest construction companies in the U.S.

In this time of political grandstanding and gridlock, private enterprises like ours that aretrying to do the right thing are pleased by the recognition here that it really is possible togrow the economy, create jobs andstill do our part as a region to fight climate change, Clemsaid.

Blair Christie, Senior Vice President and Chief Marketing Officer at Cisco, hosted the signingceremony with the leaders. Dave Foster, Executive Director of the BlueGreen Alliance, andBill Dewey, President of Taylor Shellfish Farms in Shelton, Washington, also spoke at theevent.

The Pacific Coast Collaborative was established to address the unique and sharedcircumstances of the Pacific coastal areas and jurisdictions in North America by providing aframework for co-operative action, a forum for leadership and the sharing of information onbest practices, and a common voice on issues facing coastal and Pacific jurisdictions.

# # #


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Pacific Coast Action Plan on Climate And Energy:

http://www.pacificcoastcollaborative.org/media/Pages/MediaCentre.aspx

Contacts:

British Columbia: Dave Crebo, [email protected] or (250) 812-5747

California: Jim Evans, [email protected] or (916) 445-4571

Oregon: Tim Raphael, [email protected] or (503) 689-6117

Washington: David Postman,[email protected] or (360) 902-4136

Skanska USA Inc.: Jay Weisberger, [email protected] or 206 550 8883

Cisco: Kristin Carvell, [email protected] or (408) 209-3753

Resource Media: Eric Jaffe,[email protected] or (415) 235-7822


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Pursuantto theMemorandum to Establish the Pacic Coast Collaborativeof June2008, as provided for in Article6;

Armingour shared vision of Pacic North America as a model ofinnovation that sustains our communities and creates jobs and neweconomic opportunities for our combined population of 53 million;

Recognizingthat the Pacic Coast is a region bound together by acommon geography, shared infrastructure and a regional economy witha combined GDP of US $2.8 trillion, which makes it the worlds hlargest;

Acknowledgingthe clear and convincing scientic evidence ofclimate change, ocean acidication and other impacts from increasingconcentrations of carbon dioxide in the atmosphere, which threatenour people, our economy and our natural resources;

Emphasizingthat states and provinces around the world are battlingclimate change through technology innovation and actions thatlimit greenhouse gas emissions and other air pollution while creatingeconomic growth, consumer savings and new jobs;

Celebratingthat our own governments have reduced greenhouse g asemissions by adopting regulatory, policy and market-based measuresthat shi energy generation to clean and renewable sources, manageenergy use through greater eciency and conservation, and enable andpromote consumer choice for clean vehicles;

Recallingthe ndings of the 2012 West Coast Clean Economy reportwhich projected 1.03 million new jobs could be created in key sectors,such as energy eciency and advanced transportation, assuming theright policy environment;

Supportingpositive federal action to combat climate change, includingPresident Obamas climate action plan and proposed rules to limitgreenhouse gas emissions from power plants;

Joiningthe growing international convergence on the need to securean international agreement to reduce g lobal greenhouse gas emissions,including discussions at the coming Conference of Parties meetings inWarsaw (2013), Lima (2014) and Paris (2015); and

Agreeingthat meaningful coordination and linkage between states andprovinces across North America and the world on actions to reducegreenhouse gas emissions can improve the eectiveness of these actions,increase their overall positive impact and build momentum for broaderinternational coordination to combat climate change;

NOW THEREFORE HEREBY AGREE AS FOLLOWS:

I. Lead national and international policy on climate changewith actions to:

Direct our relevant agencies and ocials to work together to:

1) Account for the costs of carbon pollution in each jurisdiction.

Oregon will build on existing programs to set a price on carbonemissions. Washington will set binding limits on carbonemissions and deploy market mechanisms to meet thoselimits. BritishColumbia and California will maintain their

existing carbon-pricing programs. Where possible, California,BritishColumbia, Oregon and Washington will link programs forconsistency and predictability and to expand opportunities to growthe regions low-carbon economy.

2) Harmonize 2050 targets for greenhouse gas reductions anddevelop mid-term targets needed to support long-term reductiongoals.

Climate scientists have identied the scale of greenhouse gasreductions that must be achieved globally to stabilize the climate.Where they have not already done so, California, BritishColumbia,Oregon and Washington will establish long-term reductiontargets that reect these scientic ndings. To advance long-termreductions, Washington already has in place a mid-term 2035 target.California and Oregon will establish their own mid-term targets.British Columbia has already legislated 2020 and 2050 targetsand will explore whether setting a mid-term target will aid theirachievement.

3) Arm the need to inform policy with ndings from climatescience.

Leaders of California, British Columbia, Oregon and Washingtonarm the scientic consensus on the human causes of climatechange and its very real impacts, most recently documentedby scientists around the world in the Intergovernmental Panelon Climate ChangesFih Assessment Reportreleased inSeptember2013, as well as other reports such a s the Scientic

Consensus on Maintaining Humanitys life Support Systems in the21st Century. Governmental actions should be grounded in thisscientic understanding of climate change.

4) Cooperate with national and sub-national governments aroundthe world to press for an international agreement on climatechange in 2015.

e governments of California, British Columbia, Oregon andWashington will join with other governments to build a coalitionof support for national and international climate action, includingsecuring an international agreement at the Conference of Parties inParis in 2015. e governments of California, British Columbia,Oregon and Washington will coordinate the activities theyundertake with other sub-national governments and combine theseeorts where appropriate.

5) Enlist support for research on ocean acidication and take actionto combat it.

Ocean health underpins our coastal shellsh and sherieseconomies. e governments of California, British Columbia,

Oregon and Washington will urge the American and Canadianfederal governments to take action on ocean acidication, includingcrucial research, modeling and monitoring to understand its causesand impacts.

II. Transition the West Coast to clean modes of transportationand reduce the large share of greenhouse gas emissions fromthis sector with actions to:

1) Adopt and maintain low-carbon fuel standards in eachjurisdiction.

Oregon and Washington will a dopt low-carbon fuels standards,and California and British Columbia will maintain their


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J IGovernor of Washington

E G. B J.Governor of California

J A. KGovernor of Oregon

CCPremier of British Columbia

S S F , C, F AL F P C C, 28 O, 2013.

existing standards. Over time, the governments of California,BritishColumbia, Oregon and Washington will work together tobuild an integrated West Coast market for low-carbon fuels thatkeeps energy dollars in the reg ion, creates economic developmentopportunities for regional fuel production, and ensurespredictability and consistency in the market.

2) Take actions to expand the use of zero-emission vehicles, aimingfor 10 percent of new vehicle purchases by 2016.

e Pacic Coast already has the highest penetration ofelectric cars in North America.e governments of California,

BritishColumbia, Oregon and Washington will work togethertowards this ambitious new target by supporting public andprivateeet managers to shi their procurement investmentsto catalyze toward electric car purchases and by continuing toinvest in necessary infrastructure to enable low-carbon electrictransportation.

3) Continue deployment of high-speed rail across the region.

Providing high-speed passenger rail service is an important partof the solution to expand reg ional clean transportation, improvequality of life and advance e conomic growth. e governments ofCalifornia, British Columbia, Oreg on and Washington continue tosupport the Pacic Coast Collaboratives Vision for high speed railin the region, and will continue to seek opportunities to invest inrail infrastructure that moves people quickly, safely and eciently,and encourages innovation in rail technology manufactured in theregion.

4) Support emerging markets and innovation for alternative fuels in

commercial trucks, buses, rail, ports and marine transportation.e Pacic Coast of North America is emerging as a center ofprivate sector innovation and investment in cleaner fuels and enginetechnologies for heavy-duty trucks and buses, rail, ports and marinetransportation.e governments of California, British Columbia,Oregon and Washington will develop targets and action plans toaccelerate public and private investment in low-carbon commercialeets and support the market transition to biofuels, electricity,natural gas and other low-carbon fuels in local and export markets.

III. Invest in clean energy and climate-resilient infrastructurewith actions to:

1) Transform the market for energy eciency and lead the way tonet-zero buildings.

Energy eciency is the lowest cost way to reduce g reenhouse gasemissions while creating good local jobs. e governments ofCalifornia, British Columbia, Oregon and Washington will work

to harmonize appliance standards, increase access to aordablenancing products, and support policy that ensures that energyeciency is valued when buildings are bought and sold. Oureorts intend to build a vibrant, growing regional market for energyeciency products and services.

2) Support strong federal policy on greenhouse gas emissions frompower plants.

e governments of California, British Columbia, Oregon andWashington will support the U.S. Environmental ProtectionAgencys initiative to regulate greenhouse ga s emissions from powerplants and emphasize the importance of allowing state exibilityto design ambitious reduction programs within this regulation.Ourjurisdictions will also coordinate and provide joint testimony infederal proceedings on g reenhouse gas emissions when appropriate.

3) Make infrastructure climate-smart and investment-ready.

e West Coast Infrastructure Exchange (WCX) is demonstratinghow to attract private capital for infrastructure projects whileincreasing climate resilience through best practices and certicationstandards. To scale up these eorts, the governments of California,Oregon and Washington will sponsor pilot projects with localgovernments, state agencies and the WCX. WCX also worksclosely with Partnerships BC, a center of infrastructurenancingexpertise established by the g overnment of British Columbia thathas helped to secure nancing for over 40 projects worth more thanC$17 billion.

4) Streamline permitting of renewable energy infrastructure.

Meeting ambitious carbon-reduction goals will require scaling upwind, solar and other forms of renewable energy and eectivelybringing clean power to customers in California, Oregon andWashington. Drawing on emerging models in California and thePacic Northwest, the governments of California, Oregon andWashington will work with permitting agencies to streamlineapproval of renewables projects to increase predictability, encourage

investment and drive innovation.5) Support integration of the regions electricity grids.

Connecting the markets for buying and selling wholesale electricityin our region can increase local utilitiesexibility and reliabilityand provide consumer savings by enabling use of a wide variety ofenergy sources across the region. Integrating our regions electricitymarkets also expands energy users access to renewable energysources, such as solar and wind power.

IV. Interpretation

is Action Plan is intended to spur nding new, smart ways for ourgovernments, agencies and stato work together, and with othergovernments and non-government partners, as appropriate, to add value,eciency and eectiveness to existing and f uture initiatives, and toreduce overlap and duplication of eort, with the objective of reducing,not increasing, resource demands to achieve objectives that are shared.

V. Limitations

is Action Plan shall have no legal eect; impose no legally bindingobligation enforceable in any court of law or other tribunal of anysort, nor create any funding expectation; nor shall our jurisdictions beresponsible for the actions of third parties or associates.

Original signed by

J A. KGovernor of Oregon

Original signed by

CCPremier of British Columbia

Original signed by

E G. B J.Governor of California

Original signed by

J IGovernor of Washington


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53 million people living in whatwould be the worlds fifth-largest economy will now beparticipating in a far-reachingstrategic alignment to combatclimate change and promoteclean energy.

On Monday afternoon in SanFrancisco, the leaders ofCalifornia, Oregon, Washington,and British Columbia signaledthey would not wait for the United States Congress or the Canadian Parliament to act toseriously address climate change. California Governor Jerry Brown, Oregon Governor JohnKitzhaber, Washington Governor Jay Inslee, and (via teleconference) British Columbias PremierChristy Clark signed the Pacific Coast Action Plan on Climate and Energy.

The agreement is not legally binding and appropriates no money. The plan says it is intended tospur finding new, smart ways for our governments, agencies and staff to work together, by

doing things like adding value and efficiency to climate initiatives through collaboration, whilereducing overlap and duplication of effort. So what does it do?

The Action Plan that California, Oregon, Washington, and British Columbias leaders all signedagreed to:

1. Account for the cost of carbon, by linking existing carbon pricing programs and working todevelop them in Oregon and Washington. Oregon agreed to build on existing programs to set aprice on carbon emissions, while Washington would set binding limits on carbon emissions anddeploy market mechanisms to meet those limits. That sounds like a carbon price and a cap-and-trade system, respectively. California has a cap-and-trade system which has sold out of all itsallowances in each of the four auctions its held. British Columbia has had a carbon tax for five

years, currently at $30/ton (Canadian). If Oregon and Washingtons plans pass and the programssuccessfully link, a larger market for the regions carbon allowances would be a boon forbusiness and economic efficiency. All four leaders said they would try to harmonize theirgreenhouse gas emissions targets for 2050 by developing mid-term targets. Washington alreadyhas a 2035 target, and the rest of the states will examine if this works for them. All states willestablish the more long-term 2050 targets.

2. Implement low-carbon fuel standards in each jurisdiction, meaning again that California andBritish Columbia will maintain their standard and Washington and Oregon will move to

Think Progress! Pacific Coast Action Plan on Climate and Energy! Page 1 of 2

http://thinkprogress.org/climate/2013/10/28/2850021/california-oregon-washington-british-columbia-agreement/
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implement them. Each jurisdiction hopes to merge the standards into an integrated West Coastmarket that keeps energy dollars in the region, creates economic development opportunitiesfor regional fuel production, and ensures predictability and consistency in the market. TheAction Plan agrees to work toward having 10 percent of all new vehicle purchases in public andprivate fleets be zero-emissions models by 2016. It also signaled support for high-speed railinfrastructure and innovation, as well as accelerating investment in other alternative fuelsacross the transportation section.

3. Embrace clean energy in a number of different ways. The four jurisdictions said they wouldpromote ease of access to energy-efficient buildings, ensure climate-smart infrastructureinvestment, streamline approval for renewable energy projects, and work to expand the regionalelectric grids. Each state will also support EPA regulation of greenhouse gases from power plants,emphasizing the value of allowing state flexibility.

If they can do this, it will be an important part of getting the U.S., Canada, and the globe theright policy environment to create jobs and cut carbon pollution.

The three states and British Columbia make up a combined GDP of $2.8 trillion, which wouldmake it the worlds 5th-largest economy. The scientific community no longer disputes that

climate change is happening and human-caused, said Oregon Governor Kitzhaber. Butregardless of where you stand on this question, theres another good reason to act: transitioningto a clean economy creates jobs.

At the event, leaders from businesses like construction company Skanska USA, Cisco Systems,and Taylor Shellfish Farms spoke about how business was doing well as their state governmentsmoved to tackle climate change.

The signatories agreed to where appropriate and feasible, link programs to create consistencyand predictability to account for and reduce carbon pollution across the four jurisdictions. Withan eye toward a global agreement in 2015, these heads of state saw commitments to reducetheir own carbon emissions as a signal to national and sub-national governments that such an

agreement was essential.

The Pacific Coast Collaborative was established in 2008 among the four signatory governmentsplus Alaska (which did not sign the Action Plan) to help them collaborate on challenges facingthe North American West Coast among them, emergency management, clean energy, andeconomic growth.

Ocean acidification, for example, affects everyone. But it particularly threatens the economiesof coastal states. The Action Plan calls for the American and Canadian governments to work toresearch and monitor ocean acidification to understand its causes and impacts.

The Western Climate Initiative was a regional cap-and-trade agreement in 2007 between

between California, Arizona, New Mexico, Utah, Montana, Oregon, Washington, and fourCanadian provinces. It had been scheduled to go into effect in 2012, but with the midtermelections in the few years preceding the deadline that resulted in the losses of climate hawks,Californias AB 32 and British Columbias carbon tax were essentially the only two programs leftstanding when the dust cleared.

This new agreement could mean that efforts like this to lower carbon emissions are alive andwell, depending on how each government implements the plan.

Think Progress! Pacific Coast Action Plan on Climate and Energy! Page 2 of 2
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FOR IMMEDIATE RELEASE

Investors ask fossil fuel companies to assess howbusiness plans fare in low-carbon future

Coalition of 70 investors worth $3 trillion call on worlds largest oil & gas,

coal and electric power companies to assess risks under climate action and

business as usual scenarios

For more information, contactAaron Pickering Ceres | [email protected] | phone: 617-247-0700 ext. 148

James Leaton Carbon Tracker |[email protected] | phone: +44-7841-570-657

BOSTON, MA Oct 24, 2013A group of70 global investors managing more than $3 trillion of collective assets todaylaunched the first-ever coordinated effort to spur45 of the worlds top oil and gas, coal andelectric power companies to assess the financial risks that climate change poses to their

business plans.

Recent studies by the Intergovernmental Panel on Climate Change and the InternationalEnergy Agency have suggested that, in order to achieve the international goal of limitingglobal warming to 2C, the world will need to live within a set carbon budget, and asignificant portion of proven global fossil fuel reserves will need to be left in the ground.

The world is currently, however, on a path toward global warming of 4C or more, which theWorld Bank warned must be avoided in order to prevent catastrophic climate changeimpacts.

The investors, most of them based in the United States and Europe, sent letters to the fossilfuel companies last month, requesting detailed responses before their annual shareholder

meetings in early 2014. Investors signing the letters include Californias two largest publicpension funds, the New York State and New York City Comptrollers, F&C AssetManagement and the Scottish Widows Investment Partnership.

The investor effort, called the Carbon Asset Risk (CAR) initiative, is being coordinated byCeres and the Carbon Tracker initiative, with support from the Global Investor Coalition onClimate Change.

We would like to understand [the companys] reserve exposure to the risks associated withcurrent and probable future policies for reducing greenhouse gas emissions by 80 percentby 2050, the investors wrote in their letterto oil and gas companies. We would also like tounderstand what options there are for [the company] to manage these risks by, for example,reducing the carbon intensity of its assets, divesting its most carbon intensive assets,diversifying its business by investing in lower carbon energy sources or returning capital toshareholders.

According to the Unburnable Carbon report, in 2012 alone, the 200 largest publicly tradedfossil fuel companies collectively spent an estimated $674 billion on finding and developingnew reserves some of which may never be utilized. This initiative highlights theopportunity to redirect this capital, rather than it being wasted on high carbon assets thatcould become stranded.

Ceres Press Release! Page 1 of 4
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The world is taking climate change seriously and global pressures to reduce fossil fuel usewill only grow stronger, said Jack Ehnes, CEO of the California State Teachers Retirement

System (CalSTRS), the nations second largest public pension fund with $172 billion undermanagement. As long-term investors, we see the world moving toward a low-carbon futurein which fossil fuel reserves that companies continue to develop may actually become aliability, which could take a toll on shareholder value.

Demand for coal has been falling in key markets. Climate policy and economic changesin Asia mean this trend could soon become permanent. Analysts tell us that demand for oilcould weaken too before long, said Craig Mackenzie, Head of Sustainability at ScottishWidows Investment Partnership, one of Europes largest asset management companies.Companies must plan properly for the risk of falling demand by stress-testing newinvestments to minimize the risk our clients capital is wasted on non-performing projects.

We have a fiduciary duty to ensure that companies we invest in are fully addressing the

risks that climate change poses, said Anne Stausboll, CEO of the California PublicEmployees Retirement System (CalPERS) and co-chair of the Ceres board of directors.We need robust long-term strategies that reflect the reality we face. This is using scienceand evidence to underpin the economics. We cannot invest in a climate catastrophe.

Fossil fuel companies are the biggest sources of carbon pollution by far, which means theyare also uniquely positioned to lead the world in responding to global climate risks, addedCeres president Mindy Lubber, speaking during a call with reporters today.

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As of October 23, investors had received preliminary responses from 30 companies.Detailed answers to the investors questions will come in follow-up responses. Participatinginvestors are asking their peers to support this effort.

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"Many of the responses investors have received from the companies thus far acknowledgethat there is a legitimate risk issue around carbon reserves, and companies are open tocontinued engagement from the investor community to determine the scope, said MarkFulton, a member of the Carbon Trackers Advisory Board and a Ceres adviser. Fossil fuelcompanies will prove to be more responsible stewards of capital in the future if they takeaction now to manage the risks posed by climate change.

Theres a real appetite among our clients to invest in companies that are innovating toaddress climate change, said Dr. Julie Gorte, Senior Vice President for Sustainable

Investing at Pax World Management Corp., a sustainable and responsible assetmanagement firm. Tackling climate change is both a business risk and opportunity, so it isin the interest of energy companies and utilities to assess, disclose and develop strategiesto mitigate carbon asset risk.

"Institutional investors must think over the long-term, which means that we must takeenvironmental risks into consideration when we make investments," said New York StateComptroller Thomas P. DiNapoli, trustee of the $160.7 billion New York State CommonRetirement Fund.

Assets are already being written down due to increasing competition between energysources, air quality standards being introduced to reduce health impacts, and measures toreduce carbon pollution combining to change the energy landscape, said James Leaton,

Research Director at Carbon Tracker. Avoiding high cost, high carbon projects which arefailing to deliver a return on capital will improve shareholderreturns.

For more information on carbon asset risk, visit www.carbontracker.org.

About Ceres

Ceres is a nonprofit organization mobilizing business and investor leadership on climatechange, water scarcity and other sustainability challenges. Ceres directs the InvestorNetwork on Climate Risk (INCR), a network of over 100 institutional investors with collectiveassets totaling more than $12 trillion. Ceres also directs Business for Innovative Climate &Energy Policy (BICEP), an advocacy coalition of nearly 30 businesses committed to workingwith policy makers to pass meaningful energy and climate legislation. For more information,visit http://www.ceres.org or follow on Twitter@CeresNews.

About Carbon Tracker initiative

The Carbon Tracker initiative is a non-profit company established by its directors to align thecapital markets with efforts to tackle climate change. Carbon Tracker has demonstrated theincompatibility of current capital expenditure plans in the energy sector with deliveringemissions reductions to improve air quality and prevent climate change. This was capturedin its 2013 report: Unburnable Carbon: Wasted Capital and Stranded Assets Learn more athttp://www.carbontracker.org or follow on Twitter@CarbonBubble.

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!

!

September!9,!2013!

!

Attention:!

Bob!Dudley,!Group!Chief!Executive!

Brian!Gilvary,!Chief!Financial!Officer!

CarlTHenric!Svanberg,!Chairman!!

BP!

1!St.!James's!Square!

London,!SW1Y!4PD!

United!Kingdon!

!

Re:!Assessment!of!Carbon!Asset!Risk!by!BP!

!

Dear!Mr.!Dudley,!Dr.!Gilvary!and!Mr.!Svanberg:!

!

A!number!of!publications!over!the!last!year!have!discussed!the!climate!changeTrelated!risks!facing!

fossil!fuel!companies!!both!from!current!and!future!policies!to!reduce!greenhouse!gas!(GHG)!

emissions!as!well!as!from!the!physical!impacts!of!climate!change.!In!addition,!investment!analysts!have!expressed!concerns!about!the!viability!of!the!current!capital!expenditure!plans!of!many!oil!and!

gas!companies.!We!are!an!international!group!of!institutional!investors,!collectively!representing!

nearly!USD!3!trillion!in!assets,!writing!to!inquire!about!BP's!exposure!to!these!risks!and!plans!for!

managing!them.!!

!

In!2010,!international!governments!formally!set!a!longTterm!goal!to!limit!global!warming!to!below!

2C,1!requiring!a!stabilization!of!the!atmospheric!concentration!of!GHGs!below!450!parts!per!

million!(ppm)!carbon!dioxide!equivalent!(CO 2e).!Because!the!combustion!of!fossil!fuels!is!the!largest!

contributor!of!GHG!emissions,!it!is!widely!recognized!that!strong!policy!action!will!be!necessary!

globally!to!transform!how!we!produce!and!use!energy!to!achieve!this!2 C!goal.!We!support!such!action!because!we!think!the!longTterm!health!of!the!economy!depends!on!effectively!managing!the!

financial!risks!posed!by!climate!change.!!

According!to!the!International!Energy!Agency!(IEA),!the!world!is!currently!on!a!path!to!raise!the!

atmospheric!concentration!of!GHGs!to!at!least!660!ppm!CO2e,!corresponding!to!a!warming!of!3.6 C!

or!more.2!he!World!Bank!recently!warned!that!there!could!be!no!certainty!that!adaptation!to!this!

level!of!climate!change!is!possible,!and!that,!a!4C!warmer!world!can,!and!must!be,!avoided!!we!need!to!hold!warming!below!2C. 3!!

!

As!investors!with!diversified!portfolios,!we!recognize!the!critical!importance!of!having!affordable!

energy!to!support!economic!growth.!We!also!recognize!that!more!than!80%!of!the!worlds!growing!

energy!demand!is!currently!met!by!fossil!fuels,!but!that!to!achieve!the!2C!goal,!fossil!fuelTrelated!

GHG!emissions!will!have!to!be!reduced!by!about!80%!by!2050.!It!is!therefore!important!to!

understand!how!current!and!probable!future!policies!to!make!these!emissions!reductions!will!impact!capital!expenditures!and!current!assets!in!the!oil!and!gas!sector!and!how!the!physical!

impacts!of!unmitigated!climate!change!will!impact!the!sectors!operations.!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

"The Cancun Agreements," (2010).2

International Energy Agency, "World Energy Outlook 2012," (2012).3

The World Bank, "Turn Down the Heat: Why a 4C Warmer World Must Be Avoided," (2012).!


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!

!

!In!its!World&Energy&Outlook&2012,!the!IEA!concluded,!No!more!than!oneTthird!of!proven!reserves!of!fossil!fuel!can!be!consumed!prior!to!2050!if!the!world!is!to!achieve!the!2C!goal,!unless!carbon!capture!and!storage!(CCS)!is!widely!deployed.4!Under!a!carbonTconstrained!scenario,!investment!bank!HSBC!assessed!how!a!number!of!oil!and!gas!companies!would!be!affected!and!estimated!that!40!to!60%!of!their!market!value!could!be!lost!because!a!portion!of!their!proven!reserves!would!become!stranded!assets!and!reduced!demand!for!oil!would!drive!down!the!prices!for!petroleum!products,!significantly!reducing!the!value!of!their!remaining!proven!reserves.5!According!to!Standard!&!Poors,!such!a!price!decline!could!pressure!the!creditworthiness!of!oil!and!gas!companies,!particularly!those!that!have!large!exposure!to!high!cost!unconventional!oil!and!gas!production!such!as!oil!sands.6!Despite!the!risk!that!a!portion!of!current!proven!reserves!of!fossil!fuels!cannot!be!consumed!if!governments!act!on!the!2C!goal,!recent!analysis!by!the!Carbon!racker!Initiative!and!the!Grantham!Research!Institute!found!that!the!worlds!200!largest!fossil!fuel!companies!collectively!still!spent!$674!billion!in!2012!on!finding!and!developing!new!reserves.7!his!raises!concern!about!the!possibility!that!returns!on!this!capital!may!never!be!realized.!!!he!costs!of!inaction!could!be!considerable!if!the!world!continues!on!a!path!to!a!3.6 C!warming!or!greater.!he!Federal&Advisory&Committee&Draft&Climate&Assessment&Report!recently!concluded,!

here!is!mounting!evidence!that!the!costs!to!the![U.S.]!are!already!high!and!will!increase!very!substantially!in!the!future,!unless!global!emissions!of!heatTtrapping!gases!are!strongly!reduced.8!In!2011!alone,!the!costs!of!extreme!weather!events,!which!are!expected!to!increase!with!climate!change,9!totaled!about!$170!billion!globally. 10!he!oil!and!gas!industry!is!also!vulnerable!to!extreme!weather!due!to!the!exposure!of!infrastructure!such!as!refineries,!ports,!and!offshore!drilling!rigs!to!hurricanes,!flooding,!and!sea!level!rise.11!Hurricanes!Katrina!and!Rita,!for!example,!caused!extensive!damage!to!the!industrys!assets!along!the!Gulf!Coast,!taking!more!than!a!million!barrels!per!day!of!refining!capacity!offline!for!months.12!Extreme!weather!may!also!cause!severe!disruptions!to!other!sectors,!especially!those!such!as!agriculture!that!are!particularly!vulnerable!to!changes!in!weather!patterns,!as!well!as!to!communities!and!commerce!generally,!resulting!in!reduced!overall!economic!growth!and!changes!in!energy!demand.!!

As!investors!with!longTterm!investment!strategies,!we!would!like!to!understand!BP's!reserve!exposure!to!the!risks!associated!with!current!and!probable!future!policies!for!reducing!GHG!emissions!by!80%!by!2050!to!achieve!the!2C!goal!(including!carbon!pricing,!pollution!and!efficiency!standards,!removal!of!subsidies,!and/or!reduced!demand),!and!the!risks!to!its!operations!as!well!as!the!economy!as!a!whole!of!increasing!extreme!weather!associated!with!the!worlds!current!path!to!a!warming!of!3.6C!or!more.!We!would!also!like!to!understand!what!options!there!are!for!BP!to!manage!these!risks!by,!for!example,!reducing!the!carbon!intensity!of!its!assets,!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!4 International Energy Agency, "World Energy Outlook 2012."5 Paul Spedding, Kirtan Mehta, and Nick Robins, "Oil & Carbon Revisited: Value at Risk from 'Unburnable' Reserves," (HSBC Global Research,2013).6

Simon Redmond and Michael Wilkins, "What a Carbon-Constrained Future Could Mean for Oil Companies' Creditworthiness," (Standard &

Poors, 2013).7

Carbon Tracker and The Grantham Research Institute, "Unburnable Carbon 2013: Wasted Capital and Stranded Assets," (2013).8 National Climate Assessment and Development Advisory Committee, "Draft Climate Assessment Report," (United States Global Change

Research Program, 2013).9 C.B. Field et al., "Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation," (IPCC, 2012).10 Cynthia McHale and Sharlene Leurig, "Stormy Future for U.S. Property/Casualty Insurers: The Growing Costs and Risks of Extreme Weather

Events," (Ceres, 2012).11

International Energy Agency, "Redrawing the Energy-Climate Map," (2013).U.S. Department of Energy, "U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather," (2013).12

Lawrence Kumins and Robert Bamberger, Congressional Research Service, Oil and Gas Disruption From Hurricanes Katrina and Rita,Updated Apr. 6, 2006, http://www.au.af.mil/au/awc/awcgate/crs/rl33124.pdf.!


22/44

!

!

divesting!its!most!carbonTintensive!assets,!diversifying!its!business!by!investing!in!lowerTcarbon!

energy!sources,!or!returning!capital!to!shareholders.13!!

!

hese!longTterm,!climate!changeTrelated!risks!raise!additional!concerns!for!discussions!already!

underway!between!the!investment!community!and!oil!and!gas!companies!about!the!viability!of!

their!capital!expenditure!plans.14!here!is!now!a!widespread!view!that!it!is!not!in!the!best!interest!of!investors!for!companies!to!expend!further!capital!on!lowTreturn!projects.15!Government!policies!

to!reduce!GHG!emissions!would!be!likely!to!further!reduce!the!returns!of!these!projects.!

!

herefore,!we!ask!that!BP!review!both!its!exposure!to!these!risks!and!its!plans!for!managing!them.!

o!inform!this!review,!in!line!with!IEAs!recent!report,! Redrawing&the&EnergyAClimate&Map,!we!

request!that!BP!conduct!a!risk!assessment!under!at!least!two!main!scenarios:!(1)!a!businessTasT

usual!scenario!such!as!that!used!in!BP's!current!reporting!and!(2)!a!lowTcarbon!scenario!consistent!

with!reducing!GHG!emissions!by!80%!by!2050!to!achieve!the!2C!goal.!We!recommend!that!this!

assessment!evaluate:!

Capital!expenditure!plans!for!finding!and!developing!new!reserves,!including!consideration!of!rates!of!return!and!payback!periods!and!alternative!uses!of!capital;!

he!potential!GHG!emissions!associated!with!the!production!of!all!unproduced!reserves!categorized!by!resource!type,!e.g.,!onshore!conventional,!tight!oil,!shale!gas,!oil!sands,!offshore,!etc.;16!

he!risks!to!unproduced!reserves,!due!to!factors!such!as!carbon!pricing,!pollution!and!efficiency!standards,!removal!of!subsidies!and/or!reduced!demand;!!

he!risks!to!assets,!particularly!oil!and!gas!infrastructure,!posed!by!the!physical!impacts!of!climate!change,!including!extreme!weather,!water!stress,!and!sea!level!rise;!and!

he!impacts!of!the!aboveTreferenced!risks!associated!with!climate!policies!and!the!physical!impacts!of!climate!change!on!the!Companys!current!and!projected!workforce.!

!While!we!recognize!that!detailed!disclosure!of!the!results!of!such!an!assessment!could!be!

commercially!sensitive,!we!ask!for!disclosure!that!demonstrates!BP's!commitment!to!managing!the!

risks!outlined!in!this!letter.!Finally,!given!the!strategic!nature!of!these!issues,!we!would!like!to!

understand!what!role!the!Board!has!in!overseeing!this!assessment.!!!

We!would!appreciate!receiving!notification!of!BP's!intent!regarding!this!request!by!October!4,!2013!

or!immediately!following!the!next!Board!meeting!and!your!full!response!in!advance!of!BP's!2014!

Annual!Stockholders!Meeting!or!AGM.!We!realize!that!these!are!complex!issues!and!welcome!the!

opportunity!to!meet!with!you!to!discuss!our!requests!in!more!detail.!Please!direct!your!response!to!

Ryan!Salmon,!Manager,!Oil!and!Gas!Program!at!Ceres!([email protected],!617T247T0700!x122),!

who!is!coordinating!this!engagement!on!behalf!of!the!participating!investors,!and!will!communicate!

your!response!to!the!undersigned.!

!

Sincerely,!

!

!

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!13 International Energy Agency, "Redrawing the Energy-Climate Map."14 Andrew Peaple, "Europe's Oil Majors Should Focus on Shareholders," Wall Street Journal2013 and della Vigna, M et al. No Light at the End

of the Tunnel (Goldman Sachs Equity Research, 2013)15

Rats, M et al Why Big Oil has Underperformed so Much (Morgan Stanley Research Europe), Syme, A et al. Investing for Commodity

Uncertainty.(Citi Research, 2013); della Vigna, M et al Death and Rebirth of an Industry (Goldman Sachs Equity Research, 2012)16

A similar question appears in: Carbon Disclosure Project, "Investor Cdp 2013 Information Request," (2013).!


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Companies*that#Received#the#Investor#

Carbon'Asset'Risk'Letter

Coal%Alpha&Natural&Resources&

Anglo&American&plc&

Arch&Coal&

BHP&Billiton&China&Shenhua&Energy&Company&Limited&

CONSOL&Energy&

Exxaro&

Glencore&Xstrata&

Mitsubishi&Corporation&

Peabody&Energy&

Rio&Tinto&Severstal&

Shanxi&Coking&Co.,&Ltd.&

Vale&

Utility%

AES&Corporation&

American&Electric&Power&

China&Power&International&Development&Limited&

Duke&Energy&

FirstEnergy&NTPC&

Southern&Company&

Oil%&%Gas%Anadarko&Petroleum&Corporation&

Apache&Corporation&

BG&Group&

BP&Canadian&Natural&Resources&

Chesapeake&Energy&

Chevron&

CNOOC&Limited&

ConocoPhillips&

Devon&Energy&Corporation&

Eni&S.p.A.&EOG&Resources,&Inc.&

ExxonMobil&

Gazprom&

Hess&Corporation&Lukoil&

Occidental&Petroleum&Oil&and&Natural&Gas&Corporation&Ltd.&

PetroChina&

Royal&Dutch&Shell&Sinopec&Corp.&

Statoil&

Suncor&

Total&


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Carbon Asset Risk Initiative Investor Signatories as of October 2013!

Stephen!Abrecht!!

Co.Chair,!Board!of!Trustees!

SEIU!Master!Trust!

!

Geeta!Aiyer!

President!

Boston!Common!Asset!Management,!LLC! !!!

Cambria!Allen!

Corporate!Governance!Director!

UAW!Retiree!Medical!Benefits!Trust!

!

Shelley!Alpern!

Director!of!Social!Research!and!Advocate!

Clean!Yield!Asset!Management!

!

Sasja!Beslik!

Head!of!Responsible!Investment!

Nordea!Asset!Management!!

David!Blood!

Senior!Partner!

Generation!Investment!Management!!

!

Henry!Boucher!

Partner,!Deputy!Chief!Investment!Officer!

Sarasin!&!Partners!LLP!

!

Tim!Brennan!

Treasurer!and!Chief!Financial!Officer!

Unitarian!Universalist!Association!of!Congregations!!

!

Paul!Bugala!!

Senior!Sustainability!Analyst!

Extractive!Industries!

Calvert!Asset!Management!Company,!Inc!!!John!Chiang!

Controller!

California!State!Controller's!Office!

!

Kathleen!Coll!Administrator!for!Shareholder!Advocacy!

Catholic!Health!East!

!

Frank!Curtiss!

Head!of!Corporate!Governance!

Railpen!Investments!

!

Sister!Patricia!A!Daly,!OP!

Corporate!Responsibility!Representative!

Sisters!of!St!Dominic!of!Caldwell,!NJ!!!!!!

!

Sister!Patricia!A!Daly,!OP!

Executive!Director!

Tri.State!Coalition!for!Responsible!

Investment!!!!!!!!!!!!!!!!!!!!!!

!

William!Dempsey!

Senior!Vice!President!of!Finance!

The!Nathan!Cummings!Foundation!

!

Thomas!DiNapoli!

New!York!State!Comptroller!

New!York!State!Common!Retirement!Fund!!!Jack!Ehnes!

CEO!California!State!Teachers'!Retirement!System!

!

Richard!Fahey!

Chief!Operating!Officer!and!Treasurer!

Skoll!Foundation!

!

Steven!A!Falci!

Head!of!Strategy!Development!

Sustainable!Investment!

Kleinwort!Benson!Investors!

!

Anders!Ferguson!Partner!

Veris!Wealth!Partners!

!

Robert!Fernandez!

Vice!President,!Credit!Research!

Breckinridge!Capital!Advisors!

!

Elizabeth!Fernando!

Head!of!Equities!

USS!Investment!Management!

!

Bennett!Freeman!Senior!Vice!President!

Sustainability!Research!&!Policy!

Calvert!Investments!!

!

Danielle!Fugere!

President!

As!You!Sow!


25/44


!

David!Gautsche!

President!

Praxis!Mutual!Funds!

!

Julie!Gorte!

Senior!Vice!President!for!Sustainable!Investing!

Pax!World!Management!Corp.!

!

Alisa!Gravitz!

CEO,!President!

Green!America!

!

FarhaJoyce!Haboucha!

Managing!Director!

Rockefeller!&!Co.!

!

Donald!G.!Hart!

President!United!Church!Funds!

!

Wendy!S.!Holding!

Trustee!

The!Sustainability!Group!at!Loring,!!

Wolcott!and!Coolidge!Trust,!Inc.!

!

Leon!Kamhi!

Head!of!Engagement!

Hermes!Equity!Ownership!Services,!Ltd!

!

Nancy!Kopp!Treasurer!

Maryland!Treasurer's!Office!

!

Sonia!Kowal!

Director!of!Socially!Responsible!Investing!

Zevin!Asset!Management,!LLC!

!

!

Lisa!Laird!

VP!Investments!and!Cash!Management!

St.!Joseph!Health!System!

!Natasha!Lamb!

Director!of!Equity!Research!&!Shareholder!

Engagement!

Arjuna!Capital!

!

!

!

!

Peter!Lambert!

CEO!

Local!Government!Super!

!

Terra!LawsonRemer!

Chair!

Advisory!Committee!on!Investor!Responsibility!

The!New!School!

!

John!Liu!

New!York!City!Comptroller!

New!York!City!Pension!Funds!!!Bill!Lockyer!

Treasurer!

California!State!Treasurer's!Office!

!

Craig!Mackenzie!Head!of!Sustainability!

Scottish!Widows!Investment!Partnership!!Peter!Murphy!

CEO!

Christian!Super!

!

Denise!Nappier!

Treasurer!

Connecticut!Office!of!the!State!Treasurer!

!

Nora!Nash!Director,!Corporate!Social!Responsibility!

Sisters!of!St.!Francis!of!Philadelphia!!

!

Daniel!Nielsen!

Director!of!SRI!

Christian!Brothers!Investment!Services,!Inc.!

!

William!Orum!

Partner!

Capricorn!Investment!Group,!LLC!

!

Matthew!Patsky!CEO!

Trillium!Asset!Management!!

!

Elizabeth!Pearce!

Treasurer!

Vermont!Office!of!the!State!Treasurer!

!


26/44


Vermont!Pension!Investment!Committee!

!

Jeff!Perkins!

Executive!Director!

Friends!Fiduciary!Corporation!

!

Michael!Quicke!

CEO!

CCLA!Investment!Management!

!

Counsellor!Kieran!Quinn!

Chair!

Local!Authority!Pension!Fund!Forum!

!

Gina!Raimondo!

Treasurer!

Rhode!Island!Office!of!the!General!Treasurer!

!

Mark!Regier!Director!of!Stewardship!Investing!

Everence!!

!

Cathy!Rowan!

Corporate!Responsibility!Coordinator!

Maryknoll!Sisters!

!

Steve!Schueth!

President!

First!Affirmative!Financial!Network,!LLC!

!

Tim!Smith!Senior!Vice!President!

Director!of!ESG!Shareowner!Engagement!

Walden!Asset!Management!

!

Susan!Smith!Makos!

SRI!Advisor!

Catholic!Health!Partners!

!

Susan!Smith!Makos!

Vice!President!of!Social!Responsibility!

Mercy!Investment!Services,!Inc.!

!Rev.!Bill!SomplatskyJarman!

Mission!Responsibility!Through!Investment!

Presbyterian!Church!(USA)!

!

!

!

!

Anne!Stausboll!

CEO!

California!Public!Employees'!Retirement!System!

!

Luan!Steinhilber!

Director!of!Operations!and!Shareholder!Advocacy!

Miller/Howard!Investments,!Inc.!

!

Greg!Sword!

Chief!Executive!Officer!

LUCRF!Super!

!

Phil!Vernon!

Managing!Director!

Australian!Ethical!Investment!Ltd.!

!

Susan!Vickers!

VP!Community!Health!!

Dignity!Health!!

Stephen!Viederman!Chair,!Finance!Committee!

The!Christopher!Reynolds!Foundation!

!

Dieter!Waizenegger!

Executive!Director!

CtW!Investment!Group!!

!

Peter!Wallach!

Head!

Merseyside!Pension!Fund!!

Richard!Walters!

Director!of!Corporate!Social!Responsibility!

United!Church!of!Christ!!Pension!Boards!

!

Steve!Waygood!

Chief!Responsible!Investment!Officer!

Aviva!Investors!

!

Ted!Wheeler!

Treasurer!

Oregon!Office!of!the!State!Treasurer!!

Ross!Youngman!

CEO!

Five!Oceans!Asset!Management!

!

!

!


27/44


David!Zellner!

Chief!Investment!Officer!

Wespath!Investment!Management!

!

Vicki!Bakhshi,!Director!

Matthias!Beer,!Associate!Director!

Juan!Salazar,!Associate!Director!

Governance!&!Sustainable!Investment!!

F&C!Asset!Management!plc!

!

!

!

!

!


28/44

Is the tide turning on big carbon? The surprising stepchange in the stranded assets debate.

Free-to-air dont miss article! Stranded assets? Sustainable investors must

understand oil, gas, coal sector cost curves

byCraig Mackenzie | August 30th, 2013

For the last few years NGOs have been warning of the investment risks of climatepolicy for fossil fuel producers. The warnings have largely fallen on deaf ears amongstmainstream investment managers. As one oil analyst put it: Aggressive carbonregulation may well cause stranded assets, but you dont seriously think thats likely tohappen any time soon. Investor ears should be deaf no more. Coal mining shareprices have fallen by two thirds in two years. Several oil majors are seeing their lowestrating against the market for a decade. A wave of new broker research from Bernstein,Citi, Deutsche Bank, Goldman Sachs, HSBC and Morgan Stanley (listed at the foot ofthe article), takes a markedly bearish view of the prospects for these sectors, pointingto serious difficulties with their economics, and even, in some cases, suggesting theycould be about to go into terminal decline. An Economist front cover (Aug 3rd)

summed it up, showing a dinosaur at a gasoline pump headlined Yesterdays fuel.This bearish turn in investor sentiment dramatically changes the debate about strandedassets, and could offer the most important ESG integration and engagementopportunity for a long time.

Unburnable carbon

Carbon Tracker, an NGO, has been extraordinarily successful in winning presscoverage for its unburnable carbon thesis. Its argument rests on a simple equation:the amount of carbon embedded in the reserves of the listed oil and coal miningcompanies is bigger than the amount we can safely emit to avoid dangerous climate

change (a 2C rise in temperatures). So, if governments were to regulate carbonemissions to put us on track for 2C some reserves will become unburnable, creatingthe risk of stranded assets and wasted capital expenditure (cap ex). Carbon Trackerclaims that these companies share prices may therefore be overvalued, creating acarbon bubble whose bursting would hurt investors exposed to oil, gas and miningcompanies. The Carbon Tracker work has also been used in the US by Bill McKibbenand the Fossil Free campaign to justify divestment from these companies.

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The struggle for share price relevance

While I struggle to find industry analysts who buy Carbon Trackers more sensationalclaims (e.g. a carbon bubble may create systemic risks for the UK economy), there iswidespread agreement about the basic stranded assets logic. Carbon regulation is a

big risk for fossil fuel companies. But, as Ive discussed on RI previously [refer to URLhttp://www.responsible-investor.com/home/article/craig_mac_externalities/] in practiceit is hard to persuade oil analysts to factor these risks into their company valuationsand investment decisions. The first problem is that the unburnable carbon argument ishypothetical. Only if carbon emissions regulation looks likely to move to a 2C path willstranded assets become a material risk. Given the ongoing failure of governments tomake substantial progress towards a global deal (and the climate scepticism of theentrenched Republican majority in the US House of Representatives), the probability ofa 2C path seems depressingly low and stranded assets remain a hypothetical issue.The second problem is timing.

Using standard discount rates, impacts that are 10 or 20 years ahead shrink dramaticallyin analyst forecasts. If we dont look likely to switch to a 2C path till 2025 or 2030,then even a big subsequent impact on earnings is largely discounted away. It shrinksfurther still if you adjust for its low perceived probability. As a result, the financial risk ofunburnable carbon has failed to make it into the premier league of share-price relevantissues.

Yesterdays fuel, todays investment risk.

The new investment bank research changes this picture dramatically. Recent reportsfrom Bernstein and Citi, suggest that demand for coal and oil may soon go into decline

globally as a result of new trends, without any need for a global climate deal and a stepchange in climate policies. Citi argues that existing fuel efficiency standards andgrowing oil-to-gas switching will mean global oil demand could peak by 2020.Bernstein argues that coal demand is falling nearly everywhere except China, but that itwill fall there too by 2017. If these bearish views turn out to be right, this marks adramatic upgrade in the perceived probability of stranded asset risk, and brings itstiming into the current decade. (As well as raising the welcome possibility that globalcarbon emissions might peak much sooner than previously feared). And it is not only amatter of possible falling demand. Analysts at Goldman Sachs and Morgan Stanley arealso raising the alarm about rising costs and declining return on equity among the oilmajors, and questioning the sustainability of their cap ex programmes. While equities in

general have been enjoying a bull run, share prices for most of the majors have beenflat for several years, and this despite sustained $100/barrel oil prices. Morgan Stanleyargues that this results from escalating costs and unsustainably high levels of cap ex.Goldman suggests some oil majors would see higher share prices if they delayed orcancelled new projects and returned the money to shareholders instead. The miningsector is already well beyond this point. The share prices of pure play coal companieshave already fallen by two thirds or more since. Disappointing demand plus the hugeinvestment in new mining capacity in the last decade means that the market is

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chronically oversupplied. Thermal coal prices have fallen by a third in two years as aresult. Companies have cancelled expansion plans and are selling assets. Onesignificant US coal miner has filed for bankruptcy. The prospects for future growth lookuncertain at best, and if Bernstein is right, grim indeed. While the gloomiest investmentbank predictions may turn out to be overdone, their existence underlines profound new

uncertainty about future demand. This uncertainty makes stranded assets a risk thattodays investors would be unwise to ignore in their company valuations andinvestment decisions. Crucially, this uncertainty is not contingent on some desirablebut depressingly out of reach global climate deal (though a deal would only makematters even worse for producers).

The cost-curve decides unburnability

As well as increased investment-relevance, the new analysis gives sharper focus to themechanism that will, sooner or later, strand assets. Counter-intuitively, perhaps, riskexposure is not a function of the amount of carbon embedded in company reserves.

Risk arises instead from the position of the company on the industry cost curve. This isbasic economics. When demand falls, the marginal producers at the expensive end ofthe cost curve become unprofitable and mothball or close capacity, while theproducers at the cheap end remain profitable. The PDF link in the downloads section see left hand column is an oil industry project cost curve sourced from CitiResearch. It shows that marginal oil projects require US$90/bbl to make a return(Breakevens reflect NPV zero using a 10% discount rate). The cost curve is what, inpractice, will drive the unburnability of carbon and potential asset stranding. Asdemand falls, expensive carbon will become unburnable first, cheap carbon later. Up toa point, an oil company can have as much carbon in its reserves as it likes, as long asit is cheap to extract. Carbon Trackers point is not that no mor

Letter to Rex Tillerson 13-10-29 Tide is Turning

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Transcript of Letter to Rex Tillerson 13-10-29 Tide is Turning