NEW DELHI: Fossil fuels—coal, oil and gas—are by far the largest contributors to global climate change, accounting for over 75% global greenhouse gas (GHG) emissions like carbon, methane and nitrous oxide. Yet, oil and gas companies seem to be investing heavily in liquified natural gas (LNG) terminals while paying lip service to achieving the Paris accord target of limiting global heating by 1.5°C.
GHGs trap the Sun’s heat and accelerate the rise in temperature, which impact all forms of life on Earth as they change weather patterns and disrupt the usual balance of nature.
A public database organisation Global Oil and Gas Exit List (GOGEL), which tracks 1,623 oil and gas companies and their investment, shows these upstream (production, exploration, expansion, etc.) and midstream (pipeline and LNG terminal) companies have increased capital spending in exploration of new gas and oil fields and are investing in setting up of LNG terminals.
Analysis shows that these upstream corporations have spent over US $170.4 billion on exploration of new oil and gas reserves in the past three years. The top seven exploration companies spending over a billion dollars are China National Petroleum Corporation, CNOOC, Aramco, Pemex, Sinopec Group, Pioneer Natural Resources and Shell.
The world cannot afford to burn more fossil fuels. The recent UN Emission Gap report shows that the world is teetering on the edge of a catastrophic temperature rise and heading towards 2.9°C, if the current situation persists. Even the latest Global Stocktake report concluded that the world is not on track to meet the Paris agreement. “The magnitude of the oil and gas industry’s expansion to truly frightening levels needs to be put in check to keep the target of 1.5°C alive. A speedy, managed decline in both oil and gas production is vital,” said Nils Bartsch, an expert on oil and gas research, who contributed to the GOGEL analysis.
The analysis also shows that even if coal extraction magically ends overnight, the world still needs to leave almost 20% of the currently approved oil and gas resources to achieve the target of 1.5°C. The upcoming COP28 presidency is with Sultan Ahmed Jaber, who is both UAE’s minister as well as CEO of Abu Dhabi National Oil Company (ADNOC). Environmentalists accuse him of a conflict of interest that may impact net zero outcomes. They fear Jaber may push the narrative towards fossil gas as the cleaner successor to coal for the energy transition.
Reckless expansion and overshooting
The International Energy Agency (IEA) has proposed a roadmap to achieve the net zero target by 2050 for fossil fuel companies on how to do short-term expansion without overshooting the pathways. GOGEL analyses the short-term expansion of companies and the extent of overshoot from the IEA’s pathways. According to GOGEL, 539 companies are preparing to bring 230 billion barrels of oil equivalent (bboe) of untapped oil and gas resources production in 129 countries (see table). These countries have either little or no oil and gas production. Instead of transitioning to cleaner energy sources, they are driving them to depend on fossil fuels. For instance, TotalEnergies, one of the top oil and gas producers, is exploring and developing new oil and gas resources in South Africa, Namibia, Mozambique or Papua New Guinea.
One-third of these short term productions would come from only seven companies—Aramco, QatarEnergy, Gazprom, Petrobras, ADNOC, TotalEnergies and ExxonMobil. Jaber’s ADNOC has the highest overshoot of any company in the world. The more disturbing part of ADNOC’s investment is its projects in the Marawah Biosphere Reserve, which harbours many endangered species and is the largest marine reserve in the Arabian Gulf.
