The world doesn’t need any new investments in oil and gas beyond what is already approved if it hopes to achieve net-zero emissions by 2050, the International Energy Agency (IEA) said on Tuesday, adding that the road to limiting global warming to 1.5 degrees Celsius involves a rapid and radical shift away from fossil fuels.
According to the IEA’s pathway to net-zero emissions by 2050, the world will not need new oil and gas projects beyond those sanctioned as of this year, the Paris-based agency said in its Net Zero by 2050 report published today.
Instead, all new energy investments should be of the renewable variety in what the IEA refers to as an “immediate and massive deployment of all available clean and efficient energy technologies.”
The agency’s ‘Roadmap for the Global Energy Sector’ also says that no new coal mines or mine extensions are required if the world is to achieve net-zero emissions in 2050.
“The path to net?zero emissions is narrow: staying on it requires immediate and massive deployment of all available clean and efficient energy technologies,” the agency said.
The scenario with the world reaching net-zero emissions by 2050 would mean a sharp decline in demand for fossil fuels, “meaning that the focus for oil and gas producers switches entirely to output – and emissions reductions – from the operation of existing assets,” the IEA said.
“No new oil and natural gas fields are needed in the net zero pathway, and supplies become increasingly concentrated in a small number of low-cost producers.”
The pathway to achieving net-zero would result in coal demand collapsing by 90 percent by 2050 and natural gas demand slumping by 55 percent, the IEA noted. Oil demand would plunge by as much as 75 percent to just 24 million barrels per day (bpd) in 2050, from around 100 million bpd in 2019.Related: Iran Is Planning An Oil Export Boost
“Achieving net-zero emissions by 2050 will require nothing short of the complete transformation of the global energy system,” the agency said.
The IEA, however, noted that such a transformation would also pose new energy security risks, while the old security risks would not go away.
Even in a scenario in which oil demand is plunging, supplies will become increasingly concentrated in a small number of low-cost producers. OPEC’s share of a much-reduced global oil supply would surge from around 37 percent in recent years to 52 percent in 2050, “a level higher than at any point in the history of oil markets,” according to the IEA.
In the clean energy transition, the energy security risks will include the variability of supply, cybersecurity risks, and the growing dependence on critical minerals, the agency said.
By Tsvetana Paraskova for Oilprice.com