The energy transition: Some inconvenient truths

One of the IEA’s bold recommendations involves halting the approval of new oil and gas fields for development, beyond projects already committed as of 2021. It is a stark departure from the earlier investment gap fears expressed by the agency: until recently it warned of tight oil and gas markets and high prices if investment in the pandemic-battered sector does not recover. 

The problem, however, is that most recommendations are easier made than implemented. Even the IEA acknowledges that a “huge amount of work is needed to turn today’s impressive ambitions into reality.” No wonder that, despite all the pledges, global CO2 emissions continue to rise. The substantial and persistent contribution of fossil fuels (that is, coal, oil and natural gas) to global primary energy mix and electricity generation over at least the last three decades suggests that absent technological breakthroughs, tilting the balance in favor of green energy will take a while. Another inconvenient truth is that, like it or not, for decarbonization to progress, fossil fuels, particularly natural gas, should be integrated into the transition to a cleaner future. Otherwise, the ambitious climate targets, particularly in the richer world, will simply be virtue signaling.