Oil Price Crash Threatens Green Transition, IEA Warns
The pain felt by Big Oil from the coronavirus-led plunge in demand may derail global efforts to cut pollution, the International Energy Agency said.
The slowdown and falling prices “undermines the ability of the oil industry to develop some of the technologies needed for clean energy transitions around the world,” said the Paris-based agency that advises nations on energy policy.
The industry has repeatedly called for government support for key technologies, such as hydrogen and carbon capture and storage which sucks pollution out of the air. All major European oil and gas companies now have ambitions in place to reduce their emissions in the long-term and some have dabbled in the power business, buying up utilities or invested in biofuels.
Global emissions from energy held steady in 2019 for the first time in three years. Burning coal, oil and natural gas still accounts for the bulk of the greenhouse-gas pollution.
A decade of oil demand growth will be wiped out in 2020 because of lockdowns associated with the coronavirus crisis. Fuel use this month will contract by almost a third to the lowest level since 1995, delivering a blow to the revenue of major oil companies, the IEA said in its monthly oil report.
Environmental campaigners are working to keep green issues at the top of the political agenda, reflecting concerns that policy makers will turn their attention toward helping those hurt economically by the lockdowns.
So far, it’s utilities such as Iberdrola SA, Enel SpA and Duke Energy Corp. that have invested more in renewables and transition away from fossil fuels than Big Oil companies. Within the oil industry, European majors such as Royal Dutch Shell Plc, BP Plc and Total SA have been the most vocal about setting green targets and investing in cleaner energy technologies.
©2020 Bloomberg L.P.