COP28 Acknowledges That the Oil and Gas Industry Has a Role to Play in the Energy Transition

After months of build-up and nearly two weeks of negotiations, COP28 has come to an end with a deal agreed by nearly 200 countries. Headlines this morning have honed in on the news that, for the first time, the agreement includes language about the transition away from fossil fuels.

Dubbed the UAE consensus, the final text calls on all parties to contribute to several global efforts including:

“Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.”

Earlier in the week, there was much discussion about the language in the agreement including whether the phrases “phase-down” or “phase-out” should be included, and whether such a commitment would be qualified by including a reference to “unabated” fossil fuels. At the end of the day, a “fossil fuel phase-out” commitment would have been yet another empty promise and the consensus decision to remove the phrase is in line with the current reality of the global energy system.

Indeed, as Bloomberg columnist Javier Blas wrote on X:

“It seems that many believe that because a COP meeting agrees some language, fossil fuel demand immediately bends toward that direction. It doesn’t. And the focus on language rather than policy is an unwelcome distraction.”

As EID has previously discussed, a phase-out of fossil fuels would have a catastrophic impact on international energy security, the global economy, and local communities. Natural gas remains the top energy source nationwide and arbitrarily curtailing this resource would be devastating to households’ energy access, industrial activity, and standards of living around the world. A recent report revealed that a “moderate” energy transition would wipe out over $8 trillion in global revenue, with the a disproportionate impact in the Global South.

As such, the final COP28 agreement includes the following:

“Recognizes that transitional fuels can play a role in facilitating the energy transition while ensuring energy security.”

International bodies have previously recognized the importance of natural gas as a tool to reduce emissions and hit global climate goals. In a previous report, the International Energy Agency (IEA) looked at the role of fuel-switching from coal to natural gas to reduce emissions of carbon dioxide and air pollutants. In the 2019 report, Dr Faith Birol says:

“Natural gas is one of the mainstays of global energy. Where it replaces more polluting fuels, it improves air quality and limits emissions of carbon dioxide.”

In the United States, the switch to natural gas has been responsible for massive decreases in emissions. In 2022 alone, the shift to natural gas facilitated an emissions reduction of 582 million metric tons of CO2 (MMT CO2), even as consumption of natural gas rose in parallel.

In addition, the COP28 agreement acknowledges the crucial role of carbon capture and storage technologies:

“Accelerating zero- and low-emission technologies, including, inter alia, renewables, nuclear, abatement and removal technologies such as carbon capture and utilization and storage, particularly in hard-to-abate sectors, and low-carbon hydrogen production…” (emphasis added)

This acknowledgement of the importance of carbon capture and removal technologies follows comments made earlier this week by U.S. Special Presidential Envoy for Climate John Kerry. Speaking at COP28, Kerry said that CCS is an essential part of the solution and the “science says we cannot get to net zero 2050 without some” carbon capture.

As EID has previously covered, the oil and gas industry continues to make significant leaps in proactively reducing greenhouse gas emissions through innovative technologies and operations. The 2023 Environmental Partnership report details these efforts, with 70 percent of U.S. onshore oil and gas operations making progress to reduce flaring, eliminate leaks, replace pneumatic controllers and more.

CCS is an essential part of the work that the industry is doing to further reduce emissions. As the COP28 text acknowledges, the technology will be particularly important in hard-to-abate sectors like manufacturing, shipping, and transportation. Furthermore, at-scale deployment of CCS would contribute to job creation and economic growth in communities throughout the United States.

Bottom Line: Despite efforts by environmental activists, the final text of COP28 shows the importance of all parties being at the table to ensure realistic solutions to reduce global emissions. Oil and natural gas is an essential part of future energy markets and COP28 rightfully acknowledges the importance of the industry and the technologies that will get us to net zero.

No Comments

Post A Comment