(Bloomberg) -- Major oil companies have pledged devotion to the goals of the Paris climate accord, but a report from Carbon Tracker analyzing their spending plans suggests their hearts still belong to hydrocarbons.

The $50 billion in spending on new oil and gas developments that companies have pledged isn’t compatible with a world that wants to limit global temperature rises to less than 2 degrees Celsius, according to the study. Some of the notable mismatches come from European giants Royal Dutch Shell Plc and Equinor ASA, whose executives regularly make strong statements about their own personal sense of responsibility to mitigate the dangers of climate change.

The report puts a fragile truce between Big Oil and its critics at risk. Some companies have said they’ll slowly cut their own emissions and offer products with less carbon, placing them in line with the tenants of the Paris climate agreement. By doing so, they hope to meet rising energy demand in the short-term and continue their large dividend payments, while limiting dangerous global warming later on. The Carbon Tracker analysis suggests that it doesn’t matter if that’s a good plan, because companies aren’t implementing it.

“To meet climate goals, it is an unavoidable consequence that fossil fuel use must drop dramatically,” the report’s authors Andrew Grant and Mike Coffin wrote. “The only way that fossil fuel companies can be ‘Paris-aligned’ is to commit to not sanctioning projects that fall outside this constraint, and shrink where necessary.”

Carbon Tracker has become an influential force among oil company investors since its founding in 2009. It counts former analysts of major banks and scientists among its staff. Coffin spent a decade as a geologist for BP Plc.

Coffin and Grant’s analysis showed some of the major projects recently approved, including Shell’s LNG Canada facility, are out of sync with its comments on climate change. The Anglo-Dutch oil major plans to spend about $13 billion to develop the massive LNG export project between 2019 and 2030, but it will only reach its hoped-for investor return if the world surpasses its warming targets, according to Carbon Tracker’s analysis.

Carbon Budgets

The report determines whether a project is out of sync with the Paris accord by calculating a “carbon budget” for the world’s temperature rise to remain within 2 degrees Celsius. The Shell-led LNG Canada made the list of at-risk projects because it needs natural gas prices to be above the level they are today to provide a high return, suggesting demand must rise.

A Shell spokeswoman said the company is confident that the project will be cost competitive because of its proximity to gas-hungry Asian markets.

“We agree that the world is not moving fast enough to tackle climate change. Shell is acting now and this is being recognized by investors,” the spokeswoman said. “As the energy system evolves, so is our business, to provide the mix of products that our customers need and ensure that Shell continues to be a world class investment case through the energy transition.”

Other expensive projects, including the Canadian oil sands, are at risk. Exxon Mobil Corp. is the only oil major to approve an oil sands development in the past five years, giving the green light to the $2.6 billion Aspen project last year, though development has since been slowed. It needs an oil price of about $80 a barrel to return 15% to investors, Carbon Tracker said. Brent futures, the international crude benchmark, is currently trading at about $62 a barrel.

All of the largest oil companies have some projects that Carbon Tracker says don’t align with the Paris accord. Some of the smaller energy companies, such as specialists in shale, don’t produce anything that is consistent with climate change targets, the analysis showed. Despite the fact that European oil majors talk more about their approach to the energy transition more than their U.S. peers, the companies with the most climate-friendly portfolios spanned the globe.

Out of the world’s five ultra-major oil companies, BP’s portfolio is most closely aligned with sustainability goals, with 83% of its capital expenditure budget allocated to projects that will likely be safe investments in a world that keeps warming well below 2 degrees. Exxon fared the worst, with only 63% of its spending over the same period aligned with a severely carbon-constrained world.

All companies have pushed back against the notion that any of their investments won’t be safe bets. While BP’s head of strategy, Dominic Emery, said in an interview that some of its resources will stay in the ground, he added that projects the company has already approved are good investments. Additionally, Patrick Pouyanne, the chief executive of France’s Total SA, told delegates at the SPE Offshore Europe Conference in Aberdeen, Scotland, this week there’s no risk the company has stranded assets, and that it’s targeting the cheapest oil possible.

Exxon supports the aims of the Paris Agreement but its CEO, Darren Woods, said this week the world’s rapidly growing demand for energy won’t be met by renewables alone. He cited International Energy Agency estimates that $21 trillion of new investment in energy production is needed by 2040, representing a “compelling investment case” for fossil fuels.

Exxon’s raft of megaprojects from offshore oil in Guyana, liquefied natural gas in Mozambique and petrochemicals in Texas are “robust” to short and long-term price fluctuations and public policy changes, Woods said.

An Exxon spokesman didn’t have any comment on the Carbon Tracker report beyond Woods’s remarks.

To contact the reporter on this story: Kelly Gilblom in London at kgilblom@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Helen Robertson, Rakteem Katakey

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