Fossils Devote 0.8% of Investment to Climate Solutions, New IEA Figures Show
The oil and gas industry only devoted 0.8% of its capital investment in 2019 to clean energy, a category that combined renewable energy with dollars thrown at more fanciful attempts at carbon capture and storage, according to figures in an International Energy Agency (IEA) report that largely amplifies the industry’s contention that it’s committed to climate solutions.
The top-line message in the IEA publication, released in Davos this week in concert with the World Economic Forum, calls on fossils to dig into their “deep pockets” and do more to fight the climate crisis, concluding that an energy transition will be possible but more expensive without their buy-in. The more sobering, quantitative assessment of the industry’s actual low-carbon commitment has been circulating on Twitter courtesy of Simon Evans, deputy editor at UK-based Carbon Brief.
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“The energy transition will be cheaper and faster with the full support of the oil and gas sector, but national oil companies, in particular, are falling behind,” Greentech Media writes, citing the IEA. “For all the talk of the energy transition, leading global oil and gas companies invested just US$2.1 billion into solar, wind, biofuels, and carbon capture projects last year, amounting to a mere 0.8% of their overall capital expenditures.”
The IEA warns of the “twin threats” of financial pressure and eroding social acceptance facing the industry. “There are already signs of both, whether in financial markets or in the reflexive antipathy toward fossil fuels that is increasingly visible in the public debate, at least in parts of Europe and North America,” the report states.
The Paris-based agency advises fossils to start cutting their production emissions, especially of climate-busting methane, and get more active in low-carbon investments.
“A large part of these emissions can be brought down relatively quickly and easily,” said IEA Executive Director Fatih Birol. But “no [fossil] energy company will be unaffected by clean energy transitions,” and “every part of the industry needs to consider how to respond. Doing nothing is simply not an option.”
Moreover, “with their extensive know-how and deep pockets, oil and gas companies can play a crucial role in accelerating deployment of key renewable options such as offshore wind, while also enabling some key capital-intensive clean energy technologies—such as carbon capture, utilization, and storage and hydrogen—to reach maturity,” he added. “Without the industry’s input, these technologies may simply not achieve the scale needed for them to move the dial on emissions.”
The Globe and Mail has Birol calling for a “grand coalition” of governments, fossils, and environmental groups to work toward climate solutions. “We just have to bring them together,” he said. “Polarized debate will not help us.” [No word on the IEA expressing any opinion on the multi-millions fossil companies have spent over decades to sow polarization and delay action through climate denial groups.—Ed.]
The report cites Saudi Aramco, China National Petroleum Corporation, and ExxonMobil as colossal fossils that have been particularly slow to embrace decarbonization, Greentech says, while casting Royal Dutch Shell as a “relative leader”. That would be the same Anglo-Dutch fossil that is on track to miss its renewable energy investment targets, devotes just 5% of its annual investment to “new energy”, and whose CEOs claims he has “no choice” but to keep spending billions on new fossil projects.