The oil and gas industry has a “huge opportunity” in the next 10 years to drive the low-carbon energy transition and earn a social licence to operate – provided it explores all clean technology options with full commitment and “sincerity”.
That is according to International Energy Agency (IEA) executive director Dr Fatih Birol, who warned industry delegates at London’s IP Week conference today (25 February) that the coming decade will be “critical” to reducing carbon emissions and ensuring “a door to a better future is not closed forever”.
He said the oil and gas industry is well-positioned to advance these decarbonisation efforts given its engineering prowess, deep pockets, wealth of skills and know-how – and should concentrate on exploring all means of developing clean energy technology, particularly carbon capture and storage (CCS) and hydrogen.
Dr Birol added: “It is impossible to reach the desired levels of emissions reduction with only one single solution.
“If we take it seriously, we need all clean energy technologies to be implemented. It’s simple arithmetic.
“The issue is not to boost our own egos but to lower emissions.”
Carbon capture technology will be instrumental to low-carbon energy transition
The IEA boss stressed that by integrating CCS technology into their portfolios, oil and gas companies have a “huge opportunity” to develop a social licence to operate in a world increasingly committed to decarbonisation.
In doing so, the industry would follow past transitional trends, from coal in the last century, to oil and then gas, followed by the growth of nuclear and then renewables.
Energy companies account for a significant portion of global carbon emissions, and while recent figures have shown that levels flat-lined in 2019, Dr Birol urged the industry to make sure that future trends follow a path of decline.
He said the 2019 figures were the result of a combination of more renewables, the switch from coal to gas and a record-high level of nuclear power generation – evidence of the need to deploy a range of strategies in a push to address climate change.
“It is good that emissions didn’t increase, but now it’s the job of the IEA to lead the global clean energy transition and see a big decline in emissions over the next 10 years,” added Dr Birol.
The world will need oil and gas for years to come
Despite the focus on transitioning away from fossil fuels and their carbon impact, the IEA director dismissed calls from environmentalists to ban all new oil and gas projects.
He said: “It’s wrong to say ‘no’ to new oil and gas production. The world will need oil and gas for several years to come.
“But if the industry sincerely wants to be a solution to the problem, it should focus on lowering emissions like methane from its production.
“Cutting methane emissions is a very easy win – a big chunk of them can be removed at very little cost.
“Around 15% of all energy-related emissions come from oil and gas production operations. We need companies not to be greedy here.”
He cautioned, however, that while the world will need oil and gas products for several years to come, “there will not be any company not affected by the clean energy transition”.
