Daily Management Review

IEA Says Oil And Gas Sector Must Abandon Carbon Capture As A Means Of Combating Climate Change


IEA Says Oil And Gas Sector Must Abandon Carbon Capture As A Means Of Combating Climate Change
The president of the International Energy Agency stated that the oil and gas sector needs to invest more in clean energy and get over the "illusion" that carbon capture technology can combat climate change.
“The industry needs to commit to genuinely helping the world meet its energy needs and climate goals – which means letting go of the illusion that implausibly large amounts of carbon capture are the solution,” IEA Executive Director Fatih Birol said in a statement ahead of the United Nations Climate Change Conference in Dubai next week.
With the use of technology, carbon dioxide from industrial processes is captured and stored underground before emissions reach the atmosphere.
In an IEA research examining the oil and gas industry's involvement in the shift to an economy with net zero carbon emissions by 2050, Birol stated that enterprises in this sector confront a moment of truth over their role in the clean energy transition.
Only 1% of the world's clean energy investment has come from the oil and gas industry, claims Birol. The head of the IEA said that the sector must accept the "uncomfortable truth" that reducing, not increasing, oil and gas operations will be necessary for a successful renewable energy transition.
“So while all oil and gas producers needs to reduce emissions from their own operations, including methane leaks and flaring, our call to action is much wider,” Birol wrote.
In order to fulfil the target of keeping climate change to 1.5 degrees Celsius, the industry would need to allocate 50% of capital expenditures to clean energy projects by 2030, according to the IEA analysis. In 2022, the industry allocated roughly 2.5 percent of its capital expenditures on renewable energy.
The research states that an over-reliance on carbon capture is one of the main energy transition's hazards. According to the IEA, carbon capture is necessary to achieve net zero emissions in some sectors but should not be utilised as a means of maintaining the status quo.
According to the IEA, current predictions for oil and gas use would need the collection, utilisation, or storage of a "inconceivable" 32 billion tonnes of carbon by 2050 in order to keep climate change to 1.5 degrees Celsius.
According to the IEA, in order for the required technology to function in 2050, 26,000 terawatt hours of power would be needed, which is more than the whole world demand in 2022.
According to the analysis, it would also require an annual investment of $3.5 trillion from now to the middle of the century, which is equal to the whole annual earnings of the oil and gas business in recent years.
American oil giants Exxon Mobil and Chevron are spending billions on hydrogen and carbon capture technology, while European oil giants Shell and BP are concentrating more on alternative energy sources like solar and wind.
With large acquisitions, Exxon and Chevron are likewise increasing their reliance on fossil fuels. Pioneer Resources is being acquired by Exxon for approximately $60 billion, and Hess is being acquired by Chevron for $53 billion.