He said US$9.5 trillion had been invested in the “clean energy transition” since 2000, but even today wind and solar only accounted for 4 per cent of energy use and electric vehicles accounted for 3 per cent of vehicles on roads worldwide. With such strong and diverse future demand growth, he argued that demand for oil and gas would remain strong at current levels: “The Paris Agreement is not about reducing oil demand; it is about reducing emissions.”
ExxonMobil then chimed in with its Global Outlook to 2050. “Under any credible scenario,
oil and natural gas remain essential,” the report claims, predicting that demand will plateau above 100 million barrels per day from around 2030. The report insisted that strong ongoing investment was essential and that, without it, oil and gas supply would contract by around 15 per cent a year to less than 30 million barrels per day by 2030. Such a contraction would trigger a 400 per cent rise in oil prices.
With such a profound vested interest in the future of oil and gas, Opec and Exxon would say that, wouldn’t they? In contrast, BP’s 2024 Energy Outlook takes a much more circumspect view. Comparing a current trajectory towards 2050 with a net zero trajectory, BP’s analysis suggests the current trajectory falls far short of the emission cuts needed to get close to net zero targets. It echoes concerns that the remaining carbon budget needed to keep global warming the right side of 1.5 degrees will be exhausted in the 2040s if fossil fuel emissions are not cut sharply.
Putting on one side the obvious vested interest ExxonMobil and Opec members have in protecting future growth in the oil and gas sector, there seems to be one clear contrasting factor in their analysis. They believe the fossil fuel sector’s carbon emission problems can be solved by improved energy efficiency, and in particular with the development of
carbon capture and storage.
Whether they are right to put their faith in the future of carbon capture is irrelevant. Drawing on work from the Global CCS Institute, a Reuters report from last November revealed there were just 42 operational commercial projects involving carbon capture, utilisation or storage.
Thirty of these were developed
by oil companies to help them enhance extraction from ageing wells, leaving just 12 leading to permanent storage.
Together, these projects have a capacity to capture 49 million tonnes of carbon, equal to about 0.13 per cent of the world’s 37 billion tonnes of industry-related emissions. As Reuters concluded, “the oil and gas industry is relying excessively on carbon capture” and the current approach is “an illusion”.
Echoing a Bloomberg report from last September that argued the
carbon capture industry was running out of time to prove itself, the IEA calculates we will need to be extracting 1 billion tonnes of carbon per year by 2030. It said capacity already in operation or with committed investment accounted for just 20 per cent of the capture target and 15 per cent of the storage target. It concludes that “greater ambition is needed”.
Progress has been embarrassingly slow.
Reports in May indicated that two major
projects in Canada had been abandoned, most prominently a C$2.4 billion (US$1.8 billion) carbon capture and storage project in Alberta intended to capture 3 million tonnes of carbon from a gas-fired power plant. Officials with Capital Power announced that, “we have confirmed that [carbon capture] is a technically viable technology and potential pathway to decarbonisation” but “at this time, the project is not economically feasible”.
With such wide differences of opinion on the future role of oil and gas and the obvious lobbying clout of Opec and oil firms, the upcoming UN climate conference looks set to be a contentious one.
Source: scmp.com
