The oil and gas industry faces a “moment of truth” at the upcoming UN climate conference, also known as COP28, according to the head of the International Energy Agency (IEA). Dr Fatih Birol, the IEA’s executive director, said that the sector must choose between contributing to the climate crisis or “becoming part of the solution”, and that it must invest more in renewable energy.
The IEA, a global energy watchdog, issued a new report on the future of fossil fuels, which warns against the expansion of oil fields and calls for a much lower demand for oil and gas. The report also criticises the reliance on carbon capture and storage, a technology that prevents CO2 emissions from fossil fuels from reaching the atmosphere, as an unrealistic and costly solution.
The report estimates that based on current oil and gas consumption, the world would have to capture or remove some 32 billion tonnes of carbon to limit global warming to 1.5C, a key threshold to avoid the worst impacts of climate change. The report highlights that the amount of electricity needed to power carbon capture and storage technologies would be greater than the entire world’s electricity demand today, and that currently only 45 million tonnes of carbon is captured worldwide each year.
The report also points out that carbon capture and storage could have negative impacts on the marine environment, such as affecting marine mammals, birds, and bats, and interfering with fishing and navigation. The report says that the oil and gas industry needs to let go of the illusion that implausibly large amounts of carbon capture are the solution, and that it must invest more in renewable energy.
The report notes that the oil and gas industry was responsible for only 1% of global investment in renewable energy last year, and that it must increase its share to at least 4% by 2030 to align with the net-zero emissions pathway. The report says that the sector must also reduce its methane emissions, which are a potent greenhouse gas, and phase out the routine flaring of gas.
The report adds that the sector must also engage with its stakeholders, such as governments, investors, consumers, and civil society, to build trust and transparency, and to demonstrate its commitment to the energy transition. The report says that the sector must also support the development of clean energy technologies, such as hydrogen, biofuels, and synthetic fuels, which could provide low-carbon alternatives to fossil fuels.
The report says that COP28, which will take place in the United Arab Emirates, a major oil producer, is a unique opportunity to demonstrate a real commitment to cutting emissions. The report says that the UAE has shown some leadership in diversifying its energy mix and investing in renewable energy, but that it must also reduce its dependence on fossil fuels.
The report cites the man who will chair the climate talks, Sultan Al Jaber of the UAE, who has been criticised for prioritising carbon capture and storage over reducing fossil fuel consumption. The report says that Al Jaber must ensure that the COP28 delivers a strong and ambitious outcome, and that he must also address the concerns of the oil and gas producing countries, which face economic and social challenges from the energy transition.
Dr Birol said that the oil and gas sector must become part of the solution, and that it must act now to avoid being left behind by the energy transition. He said that the sector has the resources, the skills, and the innovation to play a positive role in the fight against climate change, and that it must seize the opportunity to do so.
The IEA, which was founded in 1974 as a response to the oil crisis, now advises its 30 member countries and eight association countries on energy policy and security. The IEA’s main role is to provide data and analysis on the global energy system, and to promote clean energy transitions and sustainable development.
The IEA has been increasingly vocal on the need to phase out fossil fuels and accelerate the shift to renewable energy, and that it has published several reports and roadmaps on how to achieve net-zero emissions by 2050. The IEA’s latest report on the future of fossil fuels is based on its Net Zero Emissions by 2050 scenario, which outlines a pathway to limit global warming to 1.5C.