SPECIAL OIL AND GAS NEWSLETTER
The Genesis team participated in the COP 28 that took place in Dubai between December 1 and 12. The annual climate change negotiation meeting closed with “Effecting a transition away from fossil fuels in energy systems in a fair, orderly and equitable way, accelerating action in this critical decade, to achieve net zero emissions by 2050”. So reads the Decision of the 28th Climate Conference or COP28, agreed by the signatory countries of the Paris Agreement as part of the results of the first Global Stocktake. In other words, the countries agreed to embark on an energy transition that includes a progressive reduction of fossil fuels, among other measures such as tripling renewable energies and doubling energy efficiency.
This is the first time a formal call has been made to the oil and gas sector in the negotiations, but of course this will not happen anytime soon as fossil fuels account for 55% of global energy consumption.
The way forward for the sector: Decarbonize
According to the IPCC (2018), decarbonization refers to the process by which countries, individuals or other entities aim to achieve zero fossil carbon stock, that is, eliminate fossil fuel consumption.
While decarbonization is the long-term goal, security of supply is a critical imperative. The use of renewables is growing, but today oil and gas accounts for more than half of all energy consumption, with entire industries dependent on the sector. The oil and gas sector can, must and will play a role in solving the climate crisis. It is therefore essential that the sector not only survives, but thrives.
The energy transition will require up to $5.8 trillion per year until 2050.
We have witnessed a remarkable shift in perspectives around oil and gas. There has been a shift from talk of the end of oil to recognition of the sector’s importance today and the role it will play in transforming the energy market.
The industry has the necessary factors to make and ensure a successful energy transition: technical expertise, extensive operational experience, management of complex markets and, above all, abundant capital.
Here we list some of the options and strengths of the sector to establish a medium and long-term path to decarbonization:
1. use of financial instruments such as carbon credits that function as subsidies for those investments that are not financially sustainable.
2. Availability of capital: the energy transition will require up to $5.8 trillion each year until 2050, according to some estimates. The sector’s capacity to develop new renewable and clean energy technologies is ample.
Risk management: Climate change will affect infrastructure and supply, the sector’s long history of risk management can help them minimize them.
4. Efficient supply chains: The oil and gas sector moves $4 trillion in value through its supply chains annually. That’s about 4% of global GDP. Oil and gas companies’ extensive experience in managing complicated global supply chains, optimizing assets and mastering delivery logistics will be especially valuable in a more complex and connected renewable energy market.
5. Broad availability of information across networks and services.
This combination of capital and capabilities creates a scenario that will define the winners in a more uncertain energy future. Resilient companies will not only weather difficult conditions, but will continue to innovate in spite of them.
Genesis Services
– Carbon credit project development
– Development and implementation of decarbonization strategies
– Development of monitoring plans
– Development of climate risk reports
For information contact …..