The International Energy Agency is calling on the oil and gas industry to prioritize clean energy investments over carbon capture technology in the fight against climate change. Ahead of the United Nations Climate Change Conference in Dubai, IEA Executive Director Fatih Birol stated that the industry needs to let go of the “illusion” that carbon capture is the solution and focus on scaling back oil and gas operations while increasing investment in clean energy.
According to Birol, just 1% of global investment in clean energy has come from oil and gas companies, highlighting the need for a significant shift in investment priorities. The IEA report also emphasizes that a successful clean energy transition will require the industry to invest 50% of capital expenditures in clean energy projects by 2030 to limit climate change to 1.5 degrees Celsius, a goal that currently seems far from reach as only 2.5% of the industry’s capital spending went toward clean energy in 2022.
The report also warns against excessive reliance on carbon capture, stating that an “inconceivable” 32 billion tons of carbon would need to be captured by 2050 to limit climate change to 1.5 degrees Celsius under current projections for oil and gas consumption. Not only would this require a vast amount of electricity to operate but also a staggering $3.5 trillion in annual investment from today through mid-century.
In light of this, the IEA’s call to action presents a stark contrast to recent moves made by oil majors such as Exxon Mobil and Chevron, who have invested billions in carbon capture technology and hydrogen. Additionally, these companies have also made significant investments in fossil fuels through mega deals, such as Exxon’s acquisition of Pioneer Resources for nearly $60 billion and Chevron’s purchase of Hess for $53 billion.
As the world grapples with the urgent need to address climate change, the call for the oil and gas industry to shift its focus towards clean energy investments has never been more pressing. The choices made by industry leaders in the coming years will play a critical role in determining the success of the global clean energy transition.