The oil and gas sector's expertise and financial resources must play a key role in accelerating the deployment of renewable energy technologies, the International Energy Agency (IEA) has said.
In a report published today, the IEA warned that it might not be possible to scale low-carbon technologies at the rate needed unless the fossil fuel sector plays a greater role.
It said that low-carbon fuels need to account for 15% of overall investment in fuel supply within a decade, but that spending in non-core areas by oil and gas firms remains limited at around 1%.
These companies must invest more in hydrogen, biomethane and advanced biofuels, according to the researchers, and use their engineering capabilities, financial resources and project-management expertise to aid the low-carbon transition.
The report will be presented to government and industry leaders when they meet for the annual World Economic Forum (WEF) summit in Davos tomorrow.
“With their extensive know-how and deep pockets, oil and gas companies can play a crucial role in accelerating deployment of key renewable options such as offshore wind, while also enabling some key capital-intensive clean energy technologies to reach maturity,“ said IEA executive director, Dr Fatih Birol.
“Without the industry's input, these technologies may simply not achieve the scale needed for them to move the dial on emissions.“
Although the report calls for more spending on low-carbon electricity, it states that investment is still needed in fossil fuel projects.
If spending on existing oil and gas fields were to stop completely, it warns that the decline in output would be around 8% per year, which is larger than any plausible fall in global demand.
The researchers said that reducing methane leaks is the single most important and cost-effective action for the industry, with oil and gas extraction thought to account for 15% of energy-related emissions.
A large part of these emissions can be brought down relatively quickly and easily, according to Dr Birol, but there are a variety of approaches that companies can take depending on their circumstances.
“The scale of the climate challenge requires a broad coalition encompassing governments, investors, companies and everyone else who is genuinely committed to reducing emissions,“ he continued. “That effort requires the oil and gas industry to be firmly and fully on board.“
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