A who’s who of the global oil industry sketched out a persistent role for fossil fuels on Monday, blocks away from the UN where 66 nations pledged to reach “net zero” carbon emissions by the year 2050.
The meeting of the Oil and Gas Climate Initiative highlighted the dilemma of addressing growing demand for energy while reducing greenhouse gas emissions that are warming the earth.
The group’s 13 members include Exxon Mobil, BP and Saudi Aramco, which collectively account for more than 30% of global oil and gas production. Under pressure from investors and politicians, they have voluntarily endorsed the 2015 Paris agreement that aims to cap global temperature rises at well below 2 C, and preferably below 1.5 C.
The initiative used the UN climate summit as an opportunity to highlight its progress in curbing methane leaks, showcase investments in start-ups addressing emissions, improving energy efficiency and building the fledgling business of depositing carbon exhaust underground.
“We will not be dinosaurs,” said Patrick Pouyanné, chief executive of Total, the French oil major. “We’re going to be the energy company of the future, I’m convinced.”
He outlined a shift in the energy system towards natural gas, renewable energy, electric batteries and carbon capture, use and storage, known as CCUS.
According to Carbon Tracker, a research group, oil and gas companies have approved $50 billion in investments that undercut climate targets since last year.
Jules Kortenhorst, chief executive of Rocky Mountain Institute, a U.S.-based non-profit group, said clean energy technologies were quickly encroaching on oil companies’ markets. “This change is happening much faster than all of you realize,” he said.
Darren Woods, Exxon Mobil CEO, responded with a list of impediments to wider adoption of cleaner energy, including the intermittency of wind and solar power and drawbacks in using batteries to power heavy-duty trucks.
Ahmad al Khowaiter, chief technology officer at Saudi Aramco, Saudi Arabia’s state-owned oil company, acknowledged a “dual responsibility” of serving customer demand and protecting the environment. However, he said the industry would still need to invest in new oil resources to replace wells in decline. “There’s a kind of sense that this is the end of the industry. In fact, the world needs more oil,” he told the forum.
The speakers addressing the executives included Christiana Figueres, former head of the UN climate secretariat. She said the industry needed to worry about the spread of renewable energy, the rise of electric vehicles, investor aversion to fossil fuels and the availability of talent willing to work in the sector.
“Frankly, my dear friends, I think you have a rough road ahead,” she said.
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