Opec hits back at IEA for ‘vilifying’ oil industry

Opec has hit back at the latest research on transition in the oil and gas sector released by the International Energy Agency (IEA), claiming the report aims to “vilify” the industry while ignoring the quest to secure energy supplies for global economies. The group of oil-producing nations issued its response to the IEA’s call for the sector to up its game on energy transition ahead of the Opec+ meeting this Thursday, which was delayed after pushback from member countries at Saudi Arabia’s drive for further cuts to global oil output. “[The IEA report] presents an extremely narrow framing of the challenges before us, and perhaps expediently plays down such issues as energy security, energy access and energy affordability,” Opec said in a statement on Monday. The report on oil and gas and the transition to net zero, which the IEA released last week, showed that only 1% of total clean energy spending currently comes from oil producers, and 60% of that originates from four companies alone.

The report stated the sector remains “a marginal force” in the energy transition push. The IEA specifically singled out national oil companies for their lack of action on transitioning their business models away from hydrocarbons and for their new plans of investment to expand output, and called out the industry for “excessively” relying on carbon capture and storage to continue producing fossil fuels. The report also included a framework that the agency stated would show the way on how oil companies could align with net zero by 2050 targets. Opec replied this was a “tool intended to curtail the sovereign action of oil and gas producing developing countries”. The producers’ group and the IEA have been increasingly at odds as the discussion has intensified over how to shift global economies away from fossil fuels, and the role the industry should play in the transition.

The IEA has been pressing oil and gas producers to lead the way in transitioning to cleaner energy sources, while the industry has defended its efforts to ensure security of energy supply. In June, the IEA forecast that oil demand would peak by 2030 and decline in the following years. Shortly after, Opec came back with its own forecast, suggesting that oil demand would instead increase at least until 2045. “At Opec, we repeat that we believe the world has to concentrate on the task of reducing emissions, not choosing energy sources,” Opec secretary general Haitham Al Ghais said.

The comments echo the stance of current COP28 president and head of oil and gas producer Adnoc, Sultan Ahmed al-Jaber, who often stresses a distinction between fossil fuels and emissions. In the past months, al-Jaber has repeatedly emphasised that COP28 should focus its efforts on the removal and reduction of carbon emissions from fossil fuels, rather than a commitment to phase out fossil fuels entirely. Al Ghais added that “the energy challenges before us are enormous and com­plex and cannot be limited to one binary question”, refuting the IEA’s claim that oil producers will have to choose between continuing to fuel climate change or actively shift their business models to clean energy.

Source: upstreamonline.com