HOUSTON, United States – The energy industry must look beyond uncertainty about the shape of future energy demand and invest in clean energy technologies across all energy sources, the Secretary General of the International Energy Forum Joseph McMonigle said in a speech.
Widely divergent scenarios of the future oil and natural gas markets, reflecting different pathways to net zero carbon emissions, are contributing to market uncertainty, and raising hurdles to new oil and gas investments, he told an audience at the World Petroleum Congress in Houston.
"To bridge these apparent gaps between scenarios and overcome price spikes and other unintended potholes further down the road, the world must scale clean energy technologies across all energy sources, including the petroleum sector," he said.
The growing gap between main and alternative net zero pathways reflect differences between current oil and gas demand dependencies and trajectories to hit the targets pledged under the UN Paris Agreement.
For example, natural gas demand may grow by almost 40 percent or drop by 30 percent by 2040, according to different scenarios, Mr McMonigle said. Policy and technology pathways that affect energy markets are ever less certain, he added.
"While we all embrace the stellar rise of renewables growth across all scenarios, assumptions that govern the role of other sources in energy sector transformations differ even more strongly," he told the assembled audience, who attended in person.
"As current price spikes show, there is real work to do beyond renewables and electrification alone."
"New business opportunities and jobs in the circular carbon economy focused on engineered and nature-based CCUS solutions will offer new returns and income streams if governments can get the incentives and regulation right," he added.
The IEF has launched several initiatives that align with climate ambitions of IEF member countries, reinforce market stability and create a more predictable environment for investment in sustainable solutions. These include initiatives on methane emissions measurement and carbon management technologies such as carbon capture, utilization, and storage (CCUS).
"The IEF Methane Initiative equips IEF member countries with a standardized methodology to more accurately estimate emissions levels and present credible plans to reduce releases, or turn methane to value," he said.
"Governments must green light CCUS to achieve shared goals to reduce emissions and increase affordable access to modern energy," he added.
Assessments show that CCUS capacity needs to rise from around 40 million tons in operation today and, reach at least 5.6 billion tons per year by 2050 to meet Paris goals.
"That's millions to billions of metric tons. The IEA's Net Zero Report raises this to 7.6 billion tons per year by 2050," he added.
The current volatility in energy prices is a signal that we need greater certainty over the shape of the future energy market, he said.