For the 12th year, Petróleos Mexicanos presents its Social Responsibility Report with which it shows the company’s commitment with the general public, transparency and accountability to all Mexicans.
I would like to use this space to mention some recent subjects that will be decisive in the future of energy markets and which will set the agenda for social responsibility at oil companies. The first is the international community’s growing interest in the subject of climate change and secondly, the expected evolution of the world’s energy supply.
As regards the first point, the re-launching of international negotiations during the Cancún Conference of Parts (COP16) gave a new impetus to the multilateral process and evidenced the new corporate leadership in the field, which will fuel the definition of integral national policies with a specific impact on energy consumption.
During the forums and talks in Cancún, it was possible to identify four core aspects for the oil industry: a) consolidate corporate leadership in the field; b) incorporate carbon capture and sequestering into the financing scheme of the clean development mechanism and as part of the corporate mitigation strategies; c) include reforestation and avoided deforestation as critical mitigation instruments and d) explicitly recognize conservation of biodiversity and environmental services as the central point of adaptation efforts.
Although these aspects will make it possible to establish clear measures to deal with the problem posed by climate change, they will undoubtedly be insufficient, which leads me to the second point that I would like to address: the evolution of the world energy supply.
According to the International Energy Agency, global energy consumption will increase by 36% over the period 2008-2035 and fossil fuels will still play a major role; it is estimated that they will account for 53% of such increase. Furthermore, by 2035, fossil fuels are expected to represent around 80% of the world’s energy supply and in particular, oil and natural gas will account for more than 50%.
Renewable energies will still play a minor role and their growth will depend heavily on technological breakthroughs that could turn them into real substitutes for fossil fuels. Renewable energies have joined the energy supply, particularly in electric power generation, but their share has been marginal.
Nuclear energy has for several years been one of the clearest possibilities to substitute fossil fuels to generate electric power. Nevertheless, the recent natural phenomena off the coast of Japan have led authorities to rethink the role played and the safety measures required for the participation of this energy source in the future global supply.
On the other hand there has been a major transformation in natural gas supply. Technological innovation has driven exploration for shale gas and this has enabled North American production to increase more than 14 times in ten years, and to double reserves between 2008 and 2009 alone. This situation has transformed gas availability and price expectations and has created a future scenario with an abundant supply of this fuel at relatively low and stable prices.
From this viewpoint, and in the context of an economy that is less intensive in fossil fuels, at Petróleos Mexicanos we believe that this transition must consist of various elements that make it feasible, without traumatic economic disruptions that compromise the wellbeing of future generations. Among them, I stress the incorporation of external socio-environmental factors generated by oil exploitation in the assessment of investment projects; the adoption of policies for zero growth in the sector’s ecological footprint; major boost towards carbon capture and sequestration technology; and development of huge safe, reliable and timely gas resources to make gas the low-carbon content fuel for transition.
These elements should redefine the oil companies’ social responsibility agenda in the immediate future, and in this regard, Petróleos Mexicanos has taken the first steps in making more emphasis in: 1) rigorous and systematic measurement of its performance in social responsibility through the incorporation of the Sustainable Asset Management (SAM) methodology; 2) the execution of our Climate Action Plan presented at the COP16 in Cancún to mitigate emissions in the value chain and to adapt operations, communities and ecosystems to the effects of climate change; 3) systematized management of significant environmental aspects; 4) design of tools to assess external socio-environmental factors in investment projects; and 5) the expansion of our environmental services portfolio through conservation projects that currently cover 680,000 ha, which is equal to 27% of the protected natural areas in the country’s most important oil zones.
Finally, the most important subjects of the social responsibility agenda are given in this report. As happens every year, the figures presented have been verified by a third party and brought under the standards of the Global Reporting Initiative, obtaining the highest rating given by the institution for the fourth consecutive year, which makes this report, Pemex’ presentation letter in sustainable development.
Juan José Suárez Coppel
Director General of Petróleos Mexicanos