Energy majors slow to go green despite pressure

Most major oil companies are stepping up investments in green energy amid growing activist pressure but not giving up on fossil fuels, which threatens to reach carbon neutrality by 2020. 2050.

At Britain’s Shell corporation’s annual shareholder meeting on Tuesday, activists shouted “Damn Shell!”

BP received the same treatment, as did banking giant Barclays, allegedly funding oil extraction.

French oil and gas company TotalEnergies is likely to be the target of activists at Friday’s shareholder meeting.

Since 2021, the International Energy Agency (IEA) has called for a halt to new oil projects, to ensure the world meets its goal of keeping global temperature to 1.5 degrees Celsius above pre-industrial levels.

But new oil fields continue to open up.

Not enough renewable energy investment

oil and gas industryespecially in Europe, have set targets to reduce greenhouse gas emissions that cause global warming.

Although investments by oil and gas companies in renewable energy and carbon capture have increased, they still represent a small amount of total spending.

According to the IEA, such spending has increased from one percent in 2020 to five percent of total spending last year, still only a quarter of the total. energy the company pays its shareholders.

European companies like TotalEnergies and Equinor are doing better than their peers, but “their investment in clean energy is small compared to them capital expenditure on oil and gas expansion,” said David Tong, director of global industry campaigns at Oil Change International.

Different from renewable energy and carbon captureEnergy companies also have expertise that can be used in the production of hydrogen, biogas, ethanol and low-carbon fuels, said Christophe McGlade, head of the IEA’s energy supply unit. .

“If they can direct more of their spending on those technologies, that can really push them to scale and achieve the level of deployment we need to stay on track,” he said. with net zero”.

Switching from oil to gas

Energy companies’ emissions reduction efforts are largely related to their own operations, which account for only about 15% of their total carbon emissions.

In particular, they have been fighting methane leaks and reducing unwanted natural gas burning at oil fields.

Such measures have helped BP reduce emissions by 41% between 2019 and 2022 and have raised the 2030 target to a 50% reduction.

Even the major US oil companies, which have long resisted recognizing the need to reduce emissions, have begun to do so. ExxonMobil plans to cut emissions by a fifth by 2030, from 2016 levels.

But much of the work is elsewhere: reducing emissions from its products when they are burned in cars or furnaces, the so-called triple-indirect emissions range accounts for 85% of total carbon emissions. of the industry.

Reducing these means reducing the use of oil and ultimately gas.

However, oil and gas companies did not cut back on investments in fossil fuel exploration and production. The IEA forecasts that it will increase this year to reach pre-pandemic levels in 2019.

BP announced earlier this year that it was stepping up investment in oil and gas projects, pushing back on emissions reduction plans. Instead of a 35-40% reduction in indirect manufacturing-related emissions by 2030, BP now aims to reduce it by 20-30%.

TotalEnergies plans to keep indirect emissions steady this decade.

It also plans to switch from oil to gas. If oil accounts for 55% of sales in 2019, Total aims to reduce that share to 30% this decade, with gas increasing by half.

“The industry will be dominated by gas instead of oil by 2030,” said Moez Ajmi, energy expert at consulting firm EY.

For the IEA’s McGlade, these energy company forecasts are revealing.

“If companies are counting on the continued growth of oil and gas demand, they are taking it for granted that we will fall short of our goal of net zero and no limit to climate change,” he said. .

© 2023 AFP