The demand for change comes from many sides: lawsuits, shareholders and the International Energy Agency have all increased the pressure on companies recently.
Just last week, a Dutch court ordered Shell to cut greenhouse gas emissions, and investors used shareholder meetings to install activist members of the board of directors of US oil giant ExxonMobil and demand greater emission reductions from rival Chevron.
The IEA sent shockwaves through the industry last month when it said no exploration for fossil fuels or new deposits of oil and natural gas was needed, thanks to the ‘rapid fall’ demand.
The intergovernmental organization made the suggestion in a report warning that all future fossil fuel projects must be scrapped if the world is to achieve net zero carbon emissions by 2050.
The agency, which advises developed countries, has been criticized by environmentalists in the past for being too timid while calling for oil investments to ensure supply.
BP chief executive Bernard Looney told the Columbia Global Energy Summit that the report was “very much in line” with the strategy of the British energy company.
But Looney also noted that while the report sees much lower investments in fossil fuels, it is “still investments in oil and gas.”
“At the end of the day,” he said, the report “is a scenario on a piece of paper and what the world needs more than anything is maybe less scenarios and maybe less. debates… and more action ”.
BP plans to cut oil and gas production by 40% over the next decade, Looney said.
– “Lagging behind” – “It’s really a question of rhythm,” said Nicolas Berghmans, energy researcher at the think tank of the Institute for Sustainable Development and International Relations in Paris.
Businesses “are not going as fast as the IEA deems necessary” and they are “falling behind” in their transition, he said.
Oil and gas exploration has slowed recently, but this is due to the effects of the coronavirus pandemic.
Huge fields were discovered last year in Russia, Turkey and Suriname.
A report by consulting firm Westwood Global Energy Group found “no evidence of a systematic change in the industry’s exploration strategy” with respect to the energy transition.
The group is planning dozens of exploration drilling operations this year, notably in Mexico, Brazil, Suriname and Guyana.
The CEO of TotalEnergies, the French energy group that changed its name last week, bluntly said the company was not going to give up oil overnight.
“In the energy transition, there is the word ‘transition’ and I would like to remind everyone that today we live, our economy runs on 80% fossil fuels,” CEO Patrick Pouyanne said last week, warning against “radicalism”.
He said it will take time to switch to other energy sources for transportation or heating as demand for oil increases in countries like China and India.
“It’s good to say that we have to stop producing oil, but if there are no longer enough projects or production, what will happen? Prices will increase,” said Pouyanne. on radio Europe 1.
Following the IEA’s recommendations would cause oil prices to spike to $ 100 a barrel over the next several years, he said. Prices are currently under $ 70.
BP, Shell and TotalEnergies are betting on gas in their transition because it is cleaner than oil and coal.
However, the IEA also called for a 55% reduction in gas consumption by 2050.