Oil Industry’s “Moment Of Truth”: Exacerbate The Climate Catastrophe Or Contribute To Its Resolution

The International Energy Agency stated in a report released on Thursday that producers of oil and gas face a “pivotal” decision: either they contribute to the solution or they will have to accelerate the climate crisis.

Methane, which is about 80 times more potent than CO2 in the near term, is one of the planet-heating gases that the industry continues to pump out in excess of 1% of all clean energy investments made worldwide. According to the IEA, swift and drastic action is required on both fronts. If the world is to have any chance of keeping the rise in global temperatures to 1.5 degrees Celsius over pre-industrial levels.

The planet is expected to warm by almost 3 degrees Celsius by the end of this century, according to a recent UN analysis, and the warning comes ahead of COP28, a United Nations climate summit that begins next week. That kind of warming, according to scientists, could cause the world to surpass a number of catastrophic and possibly irreversible tipping points, like the melting of the polar ice sheets.

Statement from IEA Executive Director Fatih Birol

“At COP28 in Dubai, the oil and gas sector is facing a moment of truth,” according to a statement from IEA Executive Director Fatih Birol. “It is neither socially nor environmentally responsible to continue with business as usual when the world is dealing with the effects of an intensifying climate crisis.”

Birol told reporters on Thursday that the oil and gas sector needs to take two steps to help keep global warming below the 1.5-degree mark, as agreed upon by an international agreement. The report is titled “The Oil and Gas Industry in Net Zero Transitions.”

The first is cutting back on pollution that warms the planet from its own activities, like digging up oil and gas, processing it, and distributing it to customers. Almost 15% of greenhouse gas emissions related to energy are produced globally by these three activities.

Birol stated, “We know that these emissions, including methane emissions, can be fixed fairly easily, quickly, and in many cases in a cost-effective manner.”

According to the IEA report, pollution must be reduced by more than 60% from its current level by 2030.

Pristine financial investments

The second action the agency suggests is a sharp increase in the amount of money that oil and gas companies invest in renewable energy. According to the report, these companies have been “a marginal force” in the shift to clean energy.

The IEA discovered that the industry only allocated about 2.5 percent of its total capital spending, or $20 billion, to clean energy projects last year. In order to contribute to limiting global warming to the less dangerous 1.5 degrees, that share would need to skyrocket to 50% by 2030.

The way that oil and gas companies spend their money would drastically alter as a result of this increase. The industry brought in about $17 trillion in revenue between 2018 and 2022: According to the IEA report, 40% of the money was used to develop and run oil and gas assets, 10% went to investors, and very little was invested in clean energy.

To remove carbon pollution from the air and to capture the carbon produced by power plants and industrial facilities, oil and gas companies have been investing in carbon capture technologies. After that, the carbon can be stored or utilized again. Birol informed reporters that carbon capture is “not the answer,” though.

According to him, the methods can be crucial in the manufacturing of steel, iron, and cement, among other things.