BIG WIN FOR O&G PRODUCERS: EXCERPTS FROM COP28
Ellen R. Wald, President of Transversal Consulting said, “language affirming the long-called for ‘phaseout’ of oil, coal, and gas was rejected, in large part due to objections by oil producing countries like Saudi Arabia”.
“The truth is that the world still needs hydrocarbons to maintain the modern way of life and for developing countries to improve their quality of life,” Wald noted.
“Even those who pushed for the ‘phaseout’ language would not have been able to be present at the conference in the UAE without hydrocarbons,” Wald went on to state.
“The fact that the next two COP conferences are scheduled to be held in countries that are major oil and gas producers and important exporters (Azerbaijan and Brazil) indicates that the climate conference is fast becoming the purview of hydrocarbon producers,” the Transversal Consulting President reiterated.
Wald also believes that no phasedown wording will be agreed upon now that oil and gas producers are playing a significant role in the conferences.
In the most recent installment of The Edge, a weekly column by Wood Mackenzie Chairman Simon Flowers, the focus was on key insights from COP28, the column featured contributions from various industry leaders, such as David Brown, Director of Energy Transition Practice at Wood Mackenzie, Ed Crooks, the company’s Vice Chair for the Americas, and Steven Knell, Vice President of Power & Renewables Consulting at Wood Mackenzie.
The conference's significant announcement, as highlighted in Thursday's publication on Wood Mackenzie's website, emphasized the need for a just, orderly, and equitable shift away from fossil fuels in energy systems. It urged the acceleration of actions during this critical decade to achieve a net-zero target by 2050.
"While certain nations expressed dissatisfaction with the statement's scope, it remains a noteworthy occasion as it marks the inaugural consensus among global governments to diminish the use of oil, gas, and coal," it stated.
“This debate will be a hot topic again at COP29,” it continued.
“The commitment to triple renewables capacity, and statements in support of hydrogen, nuclear power, carbon capture and storage (CCS), and demand-side technologies (including road transport) also reflect the momentum building towards a low-carbon energy system,” it went on to state.
Wood Mackenzie's recent column, "The Edge," observed that achieving the phase-out of unabated fossil fuels by 2050 is possible. However, it emphasized the need to double the pace of building low-carbon supply compared to energy demand growth and to swiftly advance carbon capture and storage (CCS). The column acknowledged that despite governmental acknowledgment of the urgency, slow progress in recent years highlights the challenge of attracting investment.
The Edge column emphasized that the concluding text specifically acknowledges the significance of 'transitional fuels' in aiding the shift towards lower-carbon technologies and maintaining energy security. This development bodes well for natural gas, as it can help balance intermittent renewables until advanced technologies like hydrogen power and new nuclear capacity gain momentum in the 2030s.
The Edge column emphasized that solar and wind capacity has already quadrupled since 2015, and achieving a threefold increase from today's levels by 2030 is feasible (aligned with WoodMac's net zero scenario) but highly challenging. The success of this goal relies on the swift expansion of grid infrastructure, while prolonged lead times pose a significant obstacle to the necessary development of hydro, geothermal, and bioenergy by 2030. The extensive growth of renewables will exert immense pressure on the supply of metals and critical minerals.
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