The International Energy Agency (IEA) has released a report stating that the current annual investment of $800 billion in the global oil and gas sector needs to be slashed by half by 2030 to achieve the goal of limiting global warming to 1.5 degrees Celsius.
The report emphasizes that no new long-lead-time oil and gas projects would be necessary, and some existing projects might need to be halted.
The highest emitters in the oil and gas industry have “vast potential for improvements,” the IEA reported.
In order to align with climate goals and limit warming to the 1.5°C target set in the Paris Agreement; the industry must reduce emissions by 60% by 2030.
The IEA highlights that the industry accounts for only 1% of global clean energy investment, with a small fraction coming from a few major companies.
Temperatures this year are set to be the world’s warmest in 125,000 years, and there are concerns that the 1.5C threshold could be breached as early as this decade, which would lead to more and deadlier climate disasters.
“With the world suffering the impacts of a worsening climate crisis, continuing with business as usual is neither socially nor environmentally responsible,” IEA executive director Fatih Birol said.
While the report anticipates a decline in demand for oil and gas, the IEA recognizes the industry’s role in ensuring energy supply security and providing fuel for sectors with challenging emissions reduction prospects.
Furthermore, the sector’s skills and resources are well-suited to support the scaling up of clean energy technologies, such as hydrogen, carbon capture, offshore wind, and liquid biofuels, which can contribute to 30% of energy consumption by 2050.