IEA: Stop drilling, now!
Stop drilling, now!
The International Energy Agency, which was founded by rich industrial nations after oil shocks in the 1970s to promote secure and affordable energy supplies, says the world needs to stop drilling for oil and gas right now to prevent a climate catastrophe.
In order to reach net zero carbon emissions by 2050, the influential group said in a report Tuesday that investment in new fossil fuel supply projects must stop immediately, and no new coal-fired plants should be approved.
The dramatic recommendations are part of a detailed strategy that the IEA says would result in the world achieving the Paris climate agreement goal of limiting global warming to 1.5 degrees Celsius above preindustrial levels.
Why 1.5 degrees? Experts have repeatedly warned that exceeding the threshold will contribute to more extreme weather, greater sea level rise, wildfires, floods and food shortages for millions of people.
To prevent that, the IEA says these milestones must be hit:
- Immediate stop to new gas and oil projects.
- No new sales of fossil fuel boilers starting in 2025.
- Electric vehicles make up more than 60% of car sales by 2030.
- No sales of new internal combustion engine passenger cars by 2035.
- The global electricity sector reaches net-zero emissions by 2040.
- 70% of electricity generation from solar and wind by 2050.
There are major economic benefits to be had, according to the IEA. If the world follows the group's roadmap, annual energy investment would surge to $5 trillion by 2030 from $2.3 trillion in recent years, adding 0.4 percentage points to global GDP growth.
The IEA is best known for authoritative reports on energy supplies and its advice to many of the world's most powerful economies. That makes it harder for skeptics to dismiss its findings.
Dave Jones, global program lead at climate group Ember, said it marks a "major shift" for the IEA to "fully embrace the challenge of 1.5 degrees."
"They have made this change because it's demanded by politicians — politicians across the world are serious about 1.5 degrees, and they need the support of the IEA to deliver on it," said Jones.
President Joe Biden has committed the United States to reducing its greenhouse gas emissions by 50%-52% below its 2005 emissions levels by 2030, for example. Britain, Japan and Canada have also unveiled new goals.
Some energy companies are preparing for a future in which oil and gas are a much smaller part of their business. European giants Royal Dutch Shell and BP are moving in this direction, for example, and are ahead of the US rivals.
BP has even said that demand for oil may have peaked in 2019.
Exxon Mobil is among the laggards. Late last year, it said that it would spend up to $25 billion a year through 2025 on capital investments and oil and gas exploration even after the pandemic sharply reduced demand for its products.
Jones said the IEA report signals "the start of the end" for the oil and gas industry. "It shows that any new fossil investment is made knowing it is inconsistent with a 1.5 degree world," he added.
Investors are already taking action against Exxon. The company is facing a proxy fight by an activist group called Engine No. 1, which has nominated four candidates to its board and argues it needs to move faster on climate.
On Monday, the advisory firm Glass Lewis recommended that shareholders elect two of the four nominees put forward by Engine No. 1.
"Electing even a portion of Engine 1's slate would send a clear message of shareholder dissatisfaction with Exxon's recent direction and strategy," Glass Lewis said, according to Reuters. It also said that Exxon's energy transition plan was "generally insufficient and lacking in key areas."
Mark your calendar: Exxon's annual shareholder meeting is May 26.
Views: 752
Replies to This Discussion
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Permalink Reply by OLDDOG2020 on -
Im sure the CCP controlled Biden administration will force American companies to follow through with the IEA recommendations while allowing Russia to follow through with the Nord Stream 2 pipeline into Germany. John "Lurch" Kerry will be the lead cheerleader for destroying the American economy and will fly from country to country on his private jet to promote our decline. Meanwhile Commie Kamala will be on The View cackling with the rest of the loud mouths. In the background Joe's handlers will call a lid by 11:30 am so he can get a good dose of dementia medicine and Mayor Pete will be riding his bicycle through DC promoting Americas new preferred mode of transportation.
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Permalink Reply by Skip Peel - Mineral Consultant on
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A scenario right out of One America News Network.
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Permalink Reply by Steve P on
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The IEA is an international body, but has no authority at all.
I'm confused by the recommendations in the report. Perhaps there needs to be more definition by "no new projects" in the fossil fuel industry. Maybe the article posted above left out a few key points.
Obviously, if we stopped drilling world wide right now, the world economy would collapse since there would be neither oil nor natural gas to fuel utility generating plants or all our internal combustion engine autos and trucks. And no feedstock for petro-chem plants.
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Permalink Reply by Skip Peel - Mineral Consultant on
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The second paragraph of the article contains a live link to the IEA report for those that wish to have greater detail. Steve, you are correct that the IEA does not have any regulatory authority however it is the global energy data clearinghouse that is respected by many governments and whose data is used by governments and businesses in their decision making processes. Do I expect any of those countries or energy businesses to put the brakes on drilling forthwith? No. The significance of the IEA report is that it bolsters so many other sources of climate change projections/risks and raises the stakes for governments to become more aggressive in seeking reduction of GHS emissions. If we want O&G drilling to continue into the distant future, we need to be encouraging them through our votes to get busy reducing methane emissions, investing in Carbon Capture & Sequestration (CCS) and giving up on anti-science propaganda/climate change denial. The longer the delay, the more we pass the points when the easier, less disruptive actions were an option. The May 26 XOM stockholder meeting may be an interesting barometer of where the US super major is headed. The company is basically the last global super major to commit to evolve their business model.
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Permalink Reply by full name on
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Suggest you read this also - it is also by the IEA -
https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-...
It says that the world does not have the capacity to meet the key mineral demand (lithium, graphite, nickel and rare-earth minerals and there are no plans to fund and build the necessary mines and refineries. The IEA also notes that it takes an average of 16 years to move mining projects from discovery to first production. (a bit of a problem for Biden's 100% carbon-free electricity by 2035).
This does not account for the large volumes of water needed, considering that half to the copper and lithium production takes place in areas of high water stress. and that expanded mining will occur mainly in countries with "low governance scores" where "corruption and bribery pose major liability risks".
The IEA data show that, depending on the location and nature of future mines, the CO2 emissions from obtaining the minerals could wipe out most of the emissions saved by driving electric cars.
The IEA also notes that the increased demand will raise commodity prices and could "eat up" the anticipated reductions in manufacturing costs expected from the "learning effects" of increased production.
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Permalink Reply by Skip Peel - Mineral Consultant on
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IEA crunches a lot of data on a myriad of energy sectors. As I stated above it does not have regulatory authority, it merely publishes the data and its analysis of the data. From years of reading IEA data based articles and searching the website, my opinion is that the agency is science based and non-partisan. It does not advocate specific actions regarding their analysis. It's data to be used or not by government and business.
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Permalink Reply by GoRicky on
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YEAH - the sun is especially bright compared to the past - the magnetic shield/field is currently weak - .now -
My WALL SREET will embrace ruining source countries / enslaving people / trading "carbon credits" / so they can make a buck. -
IT'S THE SAME SINCE
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Permalink Reply by Spring Branch,mineral owner on
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That’s hilarious, Old Dog!
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Permalink Reply by Skip Peel - Mineral Consultant on
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Those who whistle past the grave yard invite some risk. If it involves only them, that's fine. If it involves the assets of others, it may be a mistake. The IEA report is another flashing red light. It is a choice to ignore it or claim it is insignificant but it is a marker that has relevance for much of the world and for governments who are already taking actions to reduce GHS emissions. Those actions have ramifications for US production.
Natural Gas in Question as Bridging Fuel for Energy Transition
The EU sees the tightening requirements for gas investments, along with the cancellation of planned gas projects, as being in favor of renewables.
May 14, 2021 By Blake Wright Journal of Petroleum Technology
Natural gas may fall from favor in the energy transition as the push for zero-emissions strengthens.
Natural gas may be facing an uphill battle in proving itself as a suitable bridging fuel between conventional hydrocarbons and renewable energy sources, especially in Europe where urgency over climate change has ramped up and the call for a quicker path to decarbonization grows louder. As a result, natural gas plant projects across the region are having a harder time finding financing as lenders are pressured to ratchet up the emissions criteria required for funding.
Utility providers across Europe have already predicted the potential of supply issues as they work to phase out aging infrastructure, including coal-powered and nuclear plants. Producers have felt for years that gas would be the natural feed stock for new power generation as scientists played catch up in the world of green energy.
However, with the cost of renewable energy falling and the promise of new breakthroughs in hydrogen technologies coupled with the drive for a zero-emission future, the natural gas “bridge” may be bypassed altogether.
Developer Drax revealed in February it had shelved plans for a new 3.6-GW natural gas power plant in the UK and took a £13-million ($181-million) impairment associated with it. According to GreenTechMedia, a Drax spokesperson said the decision aligns with a strategic shift to renewables, a shift that has also seen the firm acquire a portfolio of hydro and pumped-hydro plants in 2019.
The European Commission’s Executive Vice President Frans Timmermans told an industry event in March that there will only be a “marginal role for fossil gas” on the path to net-zero emissions by 2050.
According to Reuters, a report by US-based think tank Global Energy Monitor in April said that building all the gas infrastructure planned or under way in the European Union would create €87 billion ($105 billion) of stranded asset risk. Gas projects worth around €30 billion were cancelled, delayed, or indefinitely postponed last year as they struggled to find funding.
That proposition does not appear to get any better soon. European Investment Bank, Europe's largest public lender, has revamped its lending policy to largely exclude new natural gas infrastructure from the end of 2021.
While natural gas may be losing its footing as the fuel of choice going into the energy transition in some parts of the world, it remains in favor in other parts, specifically China.
The Oxford Institute for Energy Studies said in February that China could add 40–50 GW of new gas-fired power capacity by 2025 to 140–150 GW, up 50% from current levels, as the government tries to limit coal consumption.
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The world cannot function without oil and gas for a very long time; even transportation. The world runs on fossil fuels. If exploration ends, it seems that it would be bullish for existing fields, such as the Haynesville.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Any reduction in domestic exploration will take years to impact production volumes. Exploration is focused on future recoverable reserves that may or may not have a market. Stranded reserves are a real concern for investors. Each incremental reduction in production going forward will serve to support commodity prices and benefit Haynesville mineral lessors. The lowest cost basins should be profitable for many years to come but will represent an ever increasing percentage of total domestic production as demand slows and higher cost basins are abandoned. That prediction is dependent on Haynesville operating companies making fugitive emissions reductions a top priority and getting assistance from the state in the way of policies that support natural gas and the end users: LNG exporters and the chemical industry. Those business segments will also have to become focused on reducing emissions.
Every day that those companies delay will shorten the time line for the economic livelihood of those companies. It is worth keeping in mind that for Louisiana Haynesville mineral owners, natural gas has a potential future and state oil does not. The oil that is "state oil" excludes the federal deep water Gulf of Mexico production over which the state has no control and from which it does not derive direct revenues. State oil will reach theoretical zero in ~10 years. The Haynesville Shale, under the better case scenarios, could have another 25 to 30 years of economic life. This reality has either not been recognized by Louisiana elected officials or is being ignored as addressing that decline would be tough politically. Unfortunately the longer Louisiana puts off embracing the economic opportunities of a greening economy, the further behind our state will fall in the energy transition.
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