The IEA?’s World Energy Outlook (2012 edition) estimated that in order to have a 50% chance of limiting the rise in global temperatures to 2oC, only a third of current fossil fuel reserves can be burned before 2050. The balance could be regarded as ?‘unburnable?'. To assess the risk for the oil & gas sector, HSBC assumes in this report that the world is already low carbon and undertakes a ceiling test on the future projects of the larger European majors covered by HSBC to assess the potential value at risk. Using USD50/b for oil and USD9/mmBtu for gas for the ceiling test, oil and gas volumes at risk range from under 1% (BG Group) to 25% (BP). However, as a percentage, the value of reserves at risk is lower than this because they are largely undeveloped. The value impact ranges from under 1% (BG Group) to 17% (Statoil). The report concludes that because of its long-term nature, HSBC doubts that the market is pricing in the risk of a loss of value from this issue. They think investors should focus on low-cost companies like BG; a gas bias is preferred, which would favour Shell.