The outcome of the COP28 conference is being hailed as a landmark for its roadmap for transitioning away from fossil fuels, but the outcome is actually a win for oil and gas producers.
That’s what Ellen R. Wald, the President of Transversal Consulting, told Rigzone, adding that “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 told Rigzone.
Wald also said it is unlikely that any phasedown language will ever be agreed to now that oil and gas producers are taking a major role in the conferences.
Wood Mackenzie’s latest edition of The Edge, a weekly column authored by Wood Mackenzie Chairman Simon Flowers, looked at COP28 “key takeaways” and included input from several company leaders, including David Brown, Wood Mackenzie’s Director of Energy Transition Practice, Ed Crooks, the company’s America’s Vice Chair, and Steven Knell, Wood Mackenzie’s Vice President of Power & Renewables Consulting.
“The big news from the conference was that the concluding statement called for the ‘transitioning away from fossil fuels in energy systems, in a just, orderly, and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050’,” The Edge column published on Wood Mackenzie’s website on Thursday noted.
“Some countries said the statement did not go far enough. But it is still a significant moment – the first time the governments of the world have agreed a goal to reduce consumption of oil, gas, and coal,” it added.
The Edge column stated that the COP28 presidency came under intense pressure from some developed countries and from vulnerable nations to strengthen the language on fossil fuels, “in the face of opposition from leading oil and gas producers”.
“The direction of travel is clear, with the calling out of oil and gas for the first time a step towards phasing out unabated fossil fuels,” the column added.
“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 latest The Edge column noted that a phase-out of unabated fossil fuels by 2050 may be achievable but added that it will require building low-carbon supply at twice the rate of energy demand growth and a rapid acceleration of CCS.
“Though governments recognize the urgency, slow progress in recent years reflects the difficulty of attracting investment,” it stated.
The Edge column also highlighted that the final text “specifically calls out the role of ‘transitional fuels’ in facilitating the transition to lower-carbon technologies while ensuring energy security”.
“Good news for natural gas, which can play a role in balancing intermittent renewables while the next generation of dispatchable technologies such as hydrogen-power and new nuclear capacity ramps up in the 2030s,” it added.
The Edge column highlighted that solar and wind capacity already increased four-fold since 2015 and said tripling from today’s level by 2030 is achievable “(and broadly in line with WoodMac’s net zero scenario) but extremely challenging”.
“It also must be supported by rapid expansion of grid infrastructure. Long lead times present a major challenge to the necessary build-out of hydro, geothermal, and bioenergy by 2030,” it added.
“The scale of renewables build-out will put enormous pressure on the supply of metals and critical minerals. The supply gap by 2030 is wide enough in our base case forecast and is likely to be unbridgeable at the much faster rates of demand growth in a scenario aimed at net zero by 2050,” it continued.
