Energy
Friday, November 24th, 2023 3:11 pm EDT
Key Points
- IEA Urges Oil and Gas Industry to Prioritize Clean Energy: The International Energy Agency (IEA) calls for the oil and gas industry to shift its focus from carbon capture technology to investing more substantially in clean energy. Executive Director Fatih Birol emphasizes the need to abandon the “illusion” that extensive carbon capture is the sole solution to climate change and underscores the industry’s responsibility to contribute significantly to clean energy initiatives.
- Limited Investment in Clean Energy by Oil and Gas Companies: According to the IEA, only 1% of the global investment in clean energy has originated from oil and gas companies. Birol stresses the “uncomfortable truth” that a successful transition to clean energy requires a reduction in oil and gas operations rather than expansion. The report suggests that the industry needs to invest 50% of its capital expenditures in clean energy projects by 2030 to achieve the goal of limiting climate change to 1.5 degrees Celsius, but only 2.5% of capital spending went toward clean energy in 2022.
- Concerns About Excessive Reliance on Carbon Capture: The IEA report identifies excessive reliance on carbon capture as a major pitfall in the energy transition. While acknowledging the importance of carbon capture in certain sectors for achieving net-zero emissions, the IEA warns against using it as a strategy to maintain the status quo. The report outlines the impractical scale of carbon capture required—32 billion tons by 2050—to limit climate change to 1.5 degrees Celsius based on current oil and gas consumption projections. This would necessitate 26,000 terawatt hours of electricity, exceeding global demand in 2022, and would require $3.5 trillion in annual investment through mid-century, equivalent to the entire annual revenue of the oil and gas industry in recent years.
IEA Executive Director Fatih Birol has urged the oil and gas industry to move beyond the “illusion” that carbon capture technology is the panacea for climate change and redirect its focus towards clean energy. Birol emphasized that just 1% of global clean energy investment has come from oil and gas companies, highlighting the need for a significant shift in priorities. The IEA report calls for the industry to invest 50% of capital expenditures in clean energy projects by 2030 to achieve the target of limiting climate change to 1.5 degrees Celsius. Currently, only 2.5% of the industry’s capital spending is directed toward clean energy.
Birol underscored that carbon capture, while essential in certain sectors, should not be used as a mechanism to maintain the status quo. The report revealed that an “inconceivable” 32 billion tons of carbon would need to be captured for utilization or storage by 2050 to meet climate change goals, demanding an enormous 26,000 terawatt hours of electricity, surpassing the global demand in 2022. The financial commitment required, estimated at $3.5 trillion in annual investment through mid-century, equals the entire annual revenue of the oil and gas industry in recent years.
The IEA chief argued that oil and gas companies must face the “uncomfortable truth” that a successful transition to clean energy necessitates a reduction in oil and gas operations rather than their expansion. The industry is urged to commit to actions that align with global energy needs and climate goals. Major players like Exxon Mobil and Chevron have invested billions in carbon capture and hydrogen, while European counterparts Shell and BP have prioritized renewables such as solar and wind. Despite these efforts, concerns persist, with U.S. companies like Exxon and Chevron pursuing substantial deals in fossil fuels, indicating a potential conflict between climate goals and industry actions.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/23/oil-and-gas-industry-needs-to-let-go-of-carbon-capture-as-solution-to-climate-change-iea-says.html
