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Climate crisis puts oil in the crosshairs, but dependence persists| Climate crisis puts oil in the crosshairs, but dependence persists

Climate crisis puts oil in the crosshairs, but dependence persists| Climate crisis puts oil in the crosshairs, but dependence persists

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The climate crisis has made it clear that oil must be eliminated. But, given the world’s deep dependence upon petroleum, this is a daunting task.

“In 2021, many developments showed clearly that [the petroleum]”Industry doesn’t even have a future,” Romain Ioualalen from the activist group Oil Change International said.

The International Energy Agency (IEA) warned in May that new fossil project investment must be halted immediately if the world wants to reach net zero carbon emissions by 2050. This will allow us to limit warming to 1.5C.

This was a revolutionary call for an agency that was established in the wake the 1970 oil shock. It was created to ensure energy security in oil-consuming countries.

Another important moment in 2021 was also the emergence at the COP 26 summit in Glasgow, of a coalition consisting of nations that have pledged to eliminate oil and gas production. However no major oil and gaz producing nation joined this group. 

“It’s not taboo to discuss the end of hydrocarbon extraction during international climate summits,” stated Oil Change International’s Ioualalen.

And fossil fuels – which still represent 80 percent of energy consumed – were explicitly blamed for driving climate change, which was not the case when the Paris climate pact was reached in 2015.

Shell, an oil giant, has decided to abandon the controversial Cambo oilfield off Scotland. Shell said the investment case wasn’t strong enough.

 

‘Dependent’

“We’ve known for many years that crude oil is coming to an end,” Moez Ajmi (an energy specialist at EY), said. “But is the world ready for oil-free living? It is still dependent, in my opinion.”

The IEA believes that oil demand will continue to rise. It expects it will rise to just under 100 million barrels per hour next year, as it did in the pre-pandemic period.

Oil producers are making steady cash and can afford to invest in new projects, as crude oil prices have risen in recent months.

Mohammed Barkindo, OPEC leader, said that any talk of the oil-and-gas industries being consigned back to the past and halting new investment in oil and natural gas is wrong.

Patrick Pouyanne (head of TotalEnergies French oil company) said that he believes the transition will happen because there is real awareness, but it will be slow.

He believes that the issue is being viewed from the wrong angle. Instead of focusing on oil reduction, the focus should shift to consumption.

Pouyanne said that demand for fossil fuels will decline as consumers have access “to new products like electric cars,”

BloombergNEF reported that electric vehicles accounted to seven percent of global auto sales in the first half of this year. Although this is a small percentage, it’s growing quickly. 

 

‘Transformational year’

Ioualalen, Oil Change International’s director, stated that arguments made by oil companies and producers nations are cynical because they focus on the short-term.

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He stated, “They’re trying justification for an unsustainable trajectory at all costs.”

“We’re still far away from a decarbonised economic, of course,” said Ioualalen.

Industry players are still not sure what the future holds for petroleum, but they are still making preparations as the pressure mounts.

ExxonMobil and Chevron, two US oil giants, were long resisters, but they finally announced this year their investments in the energy transition.

“2022 is a potentially transformative year,” said Tom Ellacott from Wood Mackenzie, senior vice-president of corporate analysis at the energy research and consulting firm Wood Mackenzie. 

“It is clear that decarbonisation is not an option,” given the increasing pressure on oil industry.

Experts predict that 2022 will see a greater investment in solar and wind power, as well technology to capture carbon emissions from factories and power plants using fossil fuels.

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Julien Mivielle (AFP)



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