The Oil and Gas Industry in Energy Transition: IEA Report

The oil and gas industry is facing increasing demands to clarify the implications of energy transitions for their operations and business models, and to explain the contributions that they can make to reducing greenhouse gas emissions and to achieving the goals of the Paris Agreement.

The increasing social and environmental pressures on many oil and gas companies raise complex questions about the role of these fuels in a changing energy economy, and the position of these companies in the societies in which they operate.

Electricity cannot be the only vector for the energy sector’s transformation. A commitment by oil and gas companies to provide clean fuels to the world’s consumers is critical to the prospects for reducing emissions. The 20% share of electricity in global final consumption is growing, but electricity cannot carry energy transitions on its own against a backdrop of rising demand for energy services.

Bringing down emissions from core oil and gas operations is a key step in helping countries to get environmental gains from using less emissions-intensive fuels. However, it is also vital for companies to step up investment in low-carbon hydrogen, biomethane and advanced biofuels, as these can deliver the energy system benefits of hydrocarbons without net carbon emissions. Within ten years, these low-carbon fuels would need to account for around 15% of overall investment in fuel supply.

Read the full report here