Oil and gas producers face a defining moment as they navigate the challenges of a deepening climate crisis, according to a report by the International Energy Agency (IEA).
The report, released ahead of the COP28 climate summit in Dubai, underscores the industry’s role in either exacerbating the climate crisis or becoming part of the solution by embracing the transition to clean energy.
Analysts note that even with current policy settings, global demand for oil and gas is projected to peak by 2030 and stronger climate action could further decrease demand by 45% below today’s levels by 2050.
Despite this, the oil and gas sector, responsible for over half of the global energy supply and employing nearly 12 million workers globally, has been slow to transition to cleaner practices.
The report reveals that oil and gas companies contribute just 1% to global clean energy investment, with 60% coming from four major companies.
The IEA stresses that to align with a 1.5°C scenario, the industry must reduce its own emissions by 60% by 2030, addressing the nearly 15% of global energy-related greenhouse gas emissions attributed to the production, transport, and processing of oil and gas.
IEA Executive Director Fatih Birol said: “Oil and gas producers around the world need to make profound decisions about their future place in the global energy sector.
“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.”
