The International Energy Agency (IEA) has stated that achieving the goal of limiting global warming to 1.5 degrees Celsius by 2030 could lead to a significant reduction in the annual investment in the global oil and gas sector. The current annual investment of $800 billion in this sector might be halved to meet climate targets.
The report suggests that reaching this goal would eliminate the need for new long-lead-time oil and gas projects, and some existing projects may need to be discontinued. The IEA emphasized that the highest emitters in the oil and gas industry have substantial potential for improvement, facing crucial decisions in the face of a climate crisis largely driven by their products. To align with the climate goals set in the Paris Agreement, the industry would need to reduce emissions by 60% by 2030.
The report noted that temperatures are on track to be the warmest in 1,25,000 years, and there are concerns that the 1.5-degree Celsius threshold could be exceeded in the coming decade, leading to more severe climate disasters.
Despite the urgency for change, the IEA does not anticipate the complete disappearance of the oil and gas industry in the transition to net zero emissions. Some investments will still be necessary to ensure energy supply security and provide fuel for sectors where emissions are challenging to reduce.
Additionally, the skills and resources of the oil and gas sector can play a vital role in scaling up clean energy technologies, such as hydrogen, carbon capture, offshore wind, and liquid biofuels, which could contribute to 30% of energy consumption by 2050.
As reported by ThePrint, the report also highlights that global demand for oil and gas is expected to peak by 2030, with a projected 45% decrease in demand by 2050 if governments fulfill their national energy and climate commitments. However, the IEA underscores that the industry’s contribution to global clean energy investment is currently minimal, making it a marginal force in the transition to a clean energy system.
