Oil and gas industry facing moment of truth, says IEA

Oil and gas producers face pivotal choices about their role in the global energy system amid a worsening climate crisis fuelled in large part by their core products, according to a major new special report from the International Energy Agency (IEA) that shows how the industry can take a more responsible approach and contribute positively to the new energy economy.

The Oil and Gas Industry in Net Zero Transitions analyses the implications and opportunities for the industry that would arise from stronger international efforts to reach energy and climate targets. 

Released ahead of the COP28 climate summit in Dubai, the special report sets out what the global oil and gas sector would need to do to align its operations with the goals of the Paris Agreement.

Even under today’s policy settings, global demand for both oil and gas is set to peak by 2030, according to the latest IEA projections. Stronger action to tackle climate change would mean clear declines in demand for both fuels. 

If governments deliver in full on their national energy and climate pledges, demand would fall 45% below today’s level by 2050. In a pathway to reaching net zero emissions by mid-century, which is necessary to keep the goal of limiting global warming to 1.5 °C within reach, oil and gas use would decline by more than 75% by 2050.

Yet the oil and gas sector – which provides more than half of global energy supply and employs nearly 12 million workers worldwide – has been a marginal force at best in transitioning to a clean energy system, according to the report. Oil and gas companies currently account for just 1% of clean energy investment globally – and 60% of that comes from just four companies.

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