Gas and Oil, Possible Decrease of 45% by 2050: IEA Data

Image source: IEA

A recent report by the International Energy Agency (IEA) sheds light on how the oil and gas industry must face crucial choices to contribute to the fight against climate change.

According to the document, published ahead of the COP28 climate summit in Dubai, the sector must align with the Paris Agreement goals by adopting more sustainable practices.

Gas and Oil: Demand to Peak in 2030

The report emphasizes that, despite the importance of oil and gas in the global energy supply, the sector has been marginal in investing in clean energy, with only 1% of global investments.

Fatih Birol, IEA's Executive Director, highlights the urgency of change in the industry to address the effects of the climate crisis.

IEA projections indicate that oil and gas demand will peak by 2030, with a possible 45% decrease by 2050 if governments honor their commitments. To limit global warming to 1.5°C, the sector's emissions must be reduced by 60% by 2030.

This requires a transition strategy that includes:

Emission reduction; Investments in clean technologies. The report also notes that while a reduction in oil and gas production is expected, these will continue to be necessary, especially for sectors with emissions difficult to eliminate. Therefore, it is crucial for oil and gas companies to actively engage in a fair transition to a low-carbon economy.

Gas and Oil: Current Investments Amount to 800 Billion Dollars

Currently, annual investments in the oil and gas sector amount to 800 billion dollars, a figure more than double what is necessary to limit global warming to 1.5°C by 2030. In this context, declining demand eliminates the need for new long-term projects in the sector, even suggesting the closure of some existing productions.

With the transition to net zero, oil and gas are heading towards reduced profitability and increased risk. The report forecasts a possible decrease in the value of private oil and gas companies by up to 25% from their current 6 trillion dollars, if national energy and climate goals are met, and up to 60% in a scenario of limiting global warming to 1.5°C.

Despite these challenges, significant opportunities are emerging. The sector is strategically positioned to develop key technologies in energy transitions, such as hydrogen, carbon capture, offshore wind energy, and liquid biofuels. These technologies are estimated to represent about 30% of energy consumption by 2050 in a decarbonization context.