The climate crisis puts oil in the crosshairs. But, dependence continues

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.

Romain Ioualalen from the activist group Oil Change International stated, “In 2021 several developments showed clearly (the petroleum) industry doesn’t have a future.”

In May, the International Energy Agency stated that it was urgent to halt all investment in fossil fuel projects if the world wants to reach net zero carbon emissions by 2050. This is if we are to limit warming to 1.5C.

The agency was established in the wake of the 1970 oil shock. energy securitySeveral oil-consuming countries that are rich.

Another important moment in 2021 was COP 26’s climate summit in Glasgow, where a coalition of countries pledged to phaseout oil and other fossil fuels. gas productionAlthough no country is a major oil and gas producer, it was included in the group.

“It is not taboo anymore to talk about ending the extraction of hydrocarbons at international climate summits,” said Ioualalen, Oil Change International.

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, the oil giant, decided to end the Cambo oil field development off Scotland. Shell said that the investment case wasn’t strong enough.

‘Dependent’

“We’ve known for many years that crude oil is coming to an end,” said Moez Ajmi of EY, an energy specialist.

“But is the world ready for oil-free living? It is still dependent, in my opinion.”

The IEA also believes oil demand will continue rising. It anticipates that it will reach its pre-pandemic level, just under 100,000,000 barrels per day, next year.

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

Mohammed Barkindo, OPEC leader said recently that “any talk of oil and gas industries being consigned the past and halting any new investments in oil or gas is misguided.”

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 reducing oil consumption, it is better to focus on the consumption.

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

In the first half, Electric vehiclesBloombergNEF estimates that 7 percent of global auto sales were from China. It is still a small amount, but it is growing fast.

‘Transformational year’

Ioualalen of Oil Change International stated that arguments made in favor of oil companies and producing countries are cynical, and only consider the short-term.

He said, “They’re trying justify an unsustainable trajectory for any cost.”

“We are still far from a carbon-free economy, of course, but it will be the energy system investments made today that will get us there,” stated 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 has the potential for to be a truly transformative year,” stated Tom Ellacott (senior vice president for corporate analysis, Wood Mackenzie), an energy research and consultancy firm.

“It’s obvious that it’s not possible to sit on the sidelines of decarbonisation” due to the growing pressure on the 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.

© 2021 AFP