On Thursday local time, the International Energy Agency (IEA) released a report stating that oil and gas producers must face a historic decision: whether to continue accelerating the climate crisis or become part of the solution.
At present, clean energy investment in the oil and gas industry accounts for only about 1% of the global total investment, and continues to emit a large amount of gases that cause global warming, including methane, carbon dioxide, and so on. The IEA stated that if we want to control the increase in global average temperature below 1.5 degrees Celsius compared to before the industrial revolution, we need to take drastic action in both clean energy investment and emission reduction, and it must be done quickly.
This warning comes as the 28th United Nations Climate Change Conference (COP28) is about to open in Dubai, United Arab Emirates, and countries will assess their progress in the Paris Climate Agreement.
A recent analysis by the United Nations shows that by the end of this century, the Earth's temperature will rise by 3 degrees Celsius, mainly due to carbon emissions from human activities. According to scientists' predictions, if the world continues to develop at this speed, it may exceed several irreversible catastrophic critical points, from melting ice sheets to drought in the Amazon rainforest.
At the same time, according to experts from the Copernicus Climate Service of the European Union, the Earth has just reached a terrifying temperature milestone. Last week, they revealed that for the first time, the global average temperature was more than 2 degrees Celsius higher than before the Western Industrial Revolution.
IEA Director Birol said in a statement: "As Dubai is about to hold COP28, the oil and gas industry is facing a critical moment. As the world is affected by the worsening climate crisis, we continue to do business as usual, neither socially nor environmentally responsible
Two initiatives
Birol told the media that in order to limit global warming to the internationally agreed level of 1.5 degrees Celsius, the oil and gas industry must take two measures. The first is to reduce the various pollution caused by its own operations, such as extracting oil and natural gas from underground, processing fuel, and transporting it to consumers. These activities generate nearly 15% of global energy related greenhouse gas emissions.
He added that we know that these emissions, including methane emissions, can be easily and quickly resolved, and in many cases, they can also be resolved in an economically effective way.
The second measure is for oil and gas companies to significantly increase their investment in clean energy projects, which have now been a "marginal force" in the clean energy transformation.
The IEA found that the industry invested approximately $20 billion in clean energy projects last year, accounting for only about 2.5% of its total capital expenditure. By 2030, this proportion needs to soar to 50% to help achieve the global goal of controlling temperature rise.
This growth means a fundamental change in the way oil and gas companies spend. According to the IEA report, between 2018 and 2022, the industry generated approximately $17 trillion in revenue: 40% was used to develop and operate oil and gas assets, 10% was used to repay investors, and only a small portion was invested in clean energy.
Oil and gas companies have been investing in carbon capture technology to eliminate carbon pollution in the air and capture carbon generated by power plants and industrial facilities. The captured carbon can be stored or reused. But Birol told the media that carbon capture is not the answer, but these technologies can play an important role in the production of industries such as cement and steel.
Birol commented that in our view, if carbon capture and storage technology can continue the current trend of oil and gas production in the oil and gas industry while reducing emissions... this is pure delusion.
Kaisa Kosonen, Policy Coordinator of Greenpeace International, commented on the IEA report: "Industry self-regulation can lead to collective disasters, so the real key lies in COP28, where governments will have the opportunity to agree to make fossil fuels history in a fair and rapid manner