NEW YORK – The top 20 public tar sands companies ranked by the carbon emissions embedded in their tar sands reserves have increased their potential climate-changing carbon dioxide emissions by more than five times within a decade, according to Fossil Free Indexes (FFI), a New York-based research company focusing on environmentally sustainable index and investment solutions. This finding is derived from FFI’s Carbon Underground Tar Sands 20, a new ranking of the twenty public fossil fuel companies with the highest potential carbon dioxide emissions from tar sands reserves. The list is created using the same methodology as FFI’s flagship Carbon Underground 200, which ranks the top 200 public coal, oil and gas companies by their potential carbon emissions calculated from reported reserves.
The growth rate of potential carbon emissions from tar sands has far outstripped the growth rate of potential oil and gas emissions, according to FFI’s research. Tar sands deposits are currently exploited in Venezuela, Russia and other locations, but Canadian deposits are unique due to the extraction processes employed. The Carbon Underground Tar Sands 20 includes Canadian and international companies holding Canadian tar sands reserves. The five companies with the highest embedded carbon emissions based on their tar sands reserves are ExxonMobil, Suncor Energy, Imperial, Canadian Natural, and Shell Oil.
FFI’s Director of Oil and Gas Research, Tom Francis, said: “Tar sands projects are particularly vulnerable to being abandoned due to the costly energy intensity of the extraction and refining processes. The overall emissions burden of gasoline refined from tar sands is more than 17% greater than that of gasoline refined from conventional crude oil, making it among the dirtiest feedstocks.”
Company founder and CEO, Stuart Braman, emphasized the significance of The Carbon Underground Tar Sands 20 research for both investors and environmentalists: “Our clients have long been concerned about the environmental impact and the financial uncertainties associated with tar sands. Given the exceptional costs and risks associated with tar sands extraction, the substantial growth in tar sands reserves is striking.”
Investors can already use The Carbon Underground 200 as part of a strategy that screens out the top carbon reserves owning companies in the world. With the new Carbon Underground Tar Sands 20 list, those wishing to focus on carbon risk embedded in proven unconventional oil reserves now have a unique tool that targets or excludes those companies specifically.
For more information about The Carbon Underground Tar Sands 20, click here.
Fossil Free Indexes provides benchmarks, tools and research that support carbon-responsible investing. The company’s focus is on climate risk and the development of broad market indexes ex-fossil fuels, defined in line with the divestment movement.
In June of 2014, FFI released Fossil Free Indexes US (FFIUS). Based on the S&P 500 and screened to exclude the largest oil, gas, and coal companies as identified by The Carbon Underground 200 list, the FFIUS is the first index to leverage the long-term growth of US large cap indices while protecting investors from the risk of a carbon bubble. In its historical testing of the index, FFI found that over the ten years ending 5/30/14, the returns of the FFIUS and those of the S&P 500 are virtually identical, suggesting that index investors need not sacrifice returns when choosing not to invest in the largest fossil fuel companies.
FFI indexes are used as benchmarks and licensed for funds, ETFs, and separate accounts, as the basis for investable products and strategies.