Oil producers face ‘moment of truth’ over green investment, IEA warns

afr.com:

London | Oil and gas producers should be spending about half of their annual investment on clean energy projects by 2030 to be aligned with global climate goals, the International Energy Agency has said.

The West’s energy watchdog also warned oil and gas companies investing in new carbon capture projects that the technology would be no substitute for cutting emissions and “cannot be used to maintain the status quo”.

Fatih Birol: “The oil and gas industry is facing a moment of truth at COP28 in Dubai.”  Bloomberg

Oil and gas producers account for just 1 per cent of global green energy investment and last year committed 2.5 per cent, or $US20 billion ($30.5 billion), of their capital to the sector, the IEA said, meaning they would need to execute a massive strategic shift by 2030.

“The oil and gas industry is facing a moment of truth at COP28 in Dubai,” said IEA executive director Fatih Birol, referring to the international climate conference starting on November 30.

“With the world suffering the impacts of a worsening climate crisis, continuing with business as usual is neither socially nor environmentally responsible.”

The latest intervention from the IEA is the agency’s starkest since it shocked the fossil fuel industry in 2021 by saying that there would be no room for new oil and gas exploration projects if climate targets were to be met.

The IEA was founded in the aftermath of the 1973 Arab oil embargo to advise on energy security, with members from OECD countries including the US, the UK and Japan.

Its latest report said oil and gas producers would need to devote half of their annual capital budget to clean energy projects by 2030 if they wanted to align with the 2019 Paris climate agreement, which aims to limit