The oil and gas industry must move away from carbon capture as a solution to climate change, says the IEA –

Chevron Corp. operated Gorgon liquefied natural gas (LNG) and carbon capture and storage (CCS) facility on Barrow Island, Australia, on Monday, July 24, 2023.

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The oil and gas industry must abandon the “illusion” that carbon capture technology is a solution to climate change and invest more in clean energy, the head of the International Energy Agency said Thursday.

“The industry must commit to truly helping the world meet its energy needs and climate goals – which means moving away from the illusion that implausibly large amounts of carbon capture is the solution,” Fatih said Birol, Executive Director of the IEA, said in a statement ahead of the United Nations Climate Change Conference next week in Dubai.

The technology captures carbon dioxide from industrial operations before emissions enter the atmosphere and stores it underground.

Oil and gas companies are facing a moment of truth about their role in the clean energy transition, Birol wrote in an IEA report examining the industry’s role in the transition to a net-zero carbon economy by 2050 .

According to Birol, only 1% of global clean energy investment came from oil and gas companies. The industry must face the “inconvenient truth” that a successful transition to clean energy requires reducing oil and gas activities rather than expanding them, the IEA chief wrote.

“So while all oil and gas producers must reduce emissions from their own operations, including methane leaks and flaring, our call to action is much broader,” Birol wrote.

According to the IEA report, the industry would need to invest 50% of its capital expenditure in clean energy projects by 2030 to achieve the goal of limiting climate change to 1.5 degrees Celsius. About 2.5% of the industry’s capital expenditure went to clean energy in 2022.

One of the biggest dangers in the energy transition is over-reliance on carbon capture, the report says. Carbon capture is essential to achieving net-zero emissions in some sectors, but it should not be used to maintain the status quo, according to the IEA.

According to the IEA, an “unimaginable” 32 billion tonnes of carbon would need to be captured for use or storage by 2050 to limit climate change to 1.5 degrees Celsius based on current oil and gas consumption forecasts.

According to the IEA, operating the necessary technology in 2050 would require 26,000 terawatt hours of electricity, more than all global demand in 2022.

It would also require $3.5 trillion in annual investment from now to mid-century, equivalent to the annual revenue of the entire oil and gas industry in recent years, according to the report.

US oil companies such as Exxon Mobil and Chevron are investing billions in carbon capture and hydrogen technologies, while European companies Shell and BP are focusing more on renewable energy such as solar and wind energy.

Exxon and Chevron are also increasing their investments in fossil fuels through mega deals. Exxon is buying Pioneer Resources for nearly $60 billion, while Chevron is buying Hess for $53 billion.