Whose ‘moment of truth’?

Vienna, Austria, 27 November 2023--Last week, the International Energy Agency (IEA) in its report ‘The Oil and Gas Industry in Net Zero Transitions’ stated that the oil and gas industry faces a ‘moment of truth’. The industry has been told that it must “choose between fueling the climate crisis or embracing the shift to clean energy”, against the backdrop of the IEA’s proposed normative net-zero scenario.

As we have recently seen from the IEA, this presents an extremely narrow framing of the challenges before us, and perhaps expediently plays down such issues as energy security, energy access and energy affordability. It also unjustly vilifies the industry as being behind the climate crisis.

OPEC Secretary General, Haitham Al Ghais said: “It is ironic that the IEA, an agency that has repeatedly shifted its narratives and forecasts on a regular basis in recent years, now addresses the oil and gas industry and says that this is a ‘moment of truth’. The manner in which the IEA has unfortunately used its social media platforms in recent days to criticize and instruct the oil and gas industry is undiplomatic to say the least. OPEC itself is not an organization that would prescribe to others what they should do.”

OPEC also believes that the proposed IEA ‘Framework to assess the alignment of company targets with the NZE Scenario’ is a tool intended to curtail the sovereign actions and choices of oil and gas producing developing countries, through pressurizing their National Oil Companies.

The framework also contradicts with the Paris Agreement’s ‘bottom-up’ approach, where each country decides the means of contribution to global greenhouse gas emissions reduction, based on national capabilities and circumstances, and will likely lead to reduced investment and undermine security of supplies, which is one of the IEA’s key mandates.

Regrettably, the IEA report now also calls technologies such as carbon capture utilization and storage (CCUS) an “illusion”, even though Intergovernmental Panel on Climate Change assessment reports endorse such technologies as part of the solution to tackle climate change.

“The truth that needs to be spoken is simple and clear to those who wish to see it. It is that the energy challenges before us are enormous and com­plex and cannot be limited to one binary question,” said Al Ghais.

“Energy security, energy access and energy affordability for all must go hand-in-hand with reducing emissions. This requires major investments in all energies, all technologies, and an understanding of the needs of all peoples. At OPEC, we repeat that we believe the world has to concentrate on the task of reducing emissions, not choosing energy sources,” he added.

This industry is embracing renewables, with major investments being made, and it is investing in technologies to reduce emissions, such as CCUS, direct air capture, carbon dioxide removal and clean hydrogen. In fact, some OPEC Member Countries are global leaders in this respect.

In a world where more dialogue is needed, we repeat that finger pointing is not a constructive approach. It is important to work collaboratively and act with determination to ensure that emissions are reduced and people have access to the energy products and services they require to live a comfortable life. “These twin challenges should not be at odds with each other,” said Al Ghais.

Al Ghais added: “We do see a ‘moment of truth’ ahead. We need to understand that all countries have their own orderly energy transition pathways, we need an assurance that all voices are heard, not just a select few, and we need to ensure that energy transitions enable economic growth, enhance social mobility, boost energy access, and reduce emissions at the same time.”