Connect with us

Energy

Price war on oil and gas market from geopolitical perspective

Published

on

The collapse of the OPEC+ deal, coupled with a drop in demand amid the raging coronavirus pandemic, has sent tectonic shocks across the global oil and gas markets. Simultaneously, attacks on the Nord Stream-2 gas pipeline project have intensified again.

The global demand for oil had started to decline well before negotiations on the possibility of OPEC+ extension got under way in Vienna at the beginning of  March. The decline was due to the pandemic and warm winter. In the course of  Vienna talks Riyadh issued an ”ultimatum-like demand” for a dramatic reduction in oil production, which was unacceptable for a whole number of supplier countries because of the risk of losing their share of the market. Meanwhile, accusations on the part of Saudi and western politicians and mass media who blame Moscow for initiating the OPEC+ failure are groundless. Cartel agreements naturally lose their attractiveness over time, since «every participant tends to cheat on others». Another substantial flaw of the OPEC+ is that there are no oil companies from the United States among its signatories. As a result, the reduction in oil production on the part of OPEC+ countries has increased the market share of American producers.

In response to the OPEC+ fiasco, Saudi Arabia (KSA) announced its intention to “inundate the market” by boosting the output by 25%. Riyadh launched a price war in the hope  of “regaining the lost share of the market”. KSA cut the oil prices it offered for April by 5-8 dollars per barrel in an attempt to exert pressure on Russia and “on other producers, which are not members of  OPEC, including the United States». A number of Gulf countries have also announced an increase in production. As a result, by the end of March, oil prices had reached an 18-year low, the Russian Urals hitting less than 15 dollars per barrel. Should the price war escalate, the Urals price may drop to 5-8 dollars.

Observers present different comments as to Riyadh’s reasons for doing so. From purely tactical considerations – «to force Moscow to return to the negotiating table», to long-term ones, oriented at re-carving the entire oil and gas market, including destabilization of the oil industry of competitor countries, first of all, Russia and the United States. It could even be an attempt to undermine the social and political stability in economies which are dependent on oil and gas exports.

The Saudis’ major advantages comprise, first of all, the lowest production cost, huge oil reserves, substantial, over 0.5 trillion dollar state reserves, and unlimited opportunities for foreign loans. At the same time, experts say, «the Saudi economy is bogged down in debt». If it wants to maintain deficit-free budget, Riyadh ought to keep prices at no less than 80 dollars per barrel. According to IMF experts, even a return to «the rate of 50-55 dollars per barrel» will not be enough for KSA.

By 2024, Saudi Arabia may face a balance of payments crisis and could choose not to tie the rial to the dollar . Meanwhile, on March 27, The Wall-Street Journal reported mass consumer refusals in Europe and North America to accept new shipments of Saudi oil, as “there is nowhere to store more of it.”

The dramatic decline in oil prices has seriously hit the US oil business, as fears of mass bankruptcies in the American shale oil production sector build up. Regular suppliers are preparing to significantly reduce investments and supplies.

The “shale boom” made it possible for America to surpass Saudi Arabia and Russia in 2018 and become the world’s largest oil producer. Unlike earlier, when cheap oil always played into the hands of the American economy, now the situation has changed radically. In the conditions of the coronavirus pandemic, the money saved by gasoline consumers is unlikely to whip up demand in other sectors of the economy. What will sustain damage as well is the shale oil sector on which a number of US states depend. The breakeven threshold for shale oil companies, according to The Economist, varies from $ 23 to $ 75 per barrel, depending on the oil basin. The price collapse is fraught with mass layoffs – right in the year of the presidential election.

Meanwhile, shale oil producers have experienced mounting difficulties even before the start of the current price war. Many companies have been reporting only losses in balance sheets of late. Investors have turned away from the shale sector, most companies found it almost impossible to draw new loans or refinance the old ones. Now, given the dramatically developing situation in the oil market, many shale producers may see being taken over by larger players as the “best” option.

The collapse of oil prices has dealt an equally devastating blow to the geopolitical plans of the US leadership. As dependence on oil imports decreased,  Washington became ever more confident that the United States would now be able, through sanctions, to completely halt oil exports from Venezuela and Iran, without fearing uncontrolled global destabilization. A number of experts in Russia express concerns that the growth of production and export capacities in LNG and shale oil sectors, according to the standard scheme now, could prompt Washington to “tighten sanctions” against the Russian oil and gas industry.

In the summer of 2017, President Trump announced plans to secure a US dominant position in the global gas market. An energy strategy that saw light at that time as well “describes Russia as a competitor,” claiming that “Russian projects to diversify supply routes to Europe run counter to the  US policy.” Resulting from such political approaches is “concerted effort … against Nord Stream-2 (NS-2)” and other Russian projects on the construction of new gas pipelines to Europe.

At the end of 2017, the United States, for the first time in 60 years, began to export more gas than it imported. The growth of shale production enabled the United States to produce 733 billion cubic meters by the end of 2017 – more than anywhere in the world, including Russia. However, until recently, one of the major obstacles to expanding US gas exports was the US dependence on oil imports. Oil in the US domestic market is several times more expensive than gas in energy equivalent. If the US is to increase the supply of its “cheap” gas – to compensate for the shortage of oil and gas in the domestic market – it would have to increase the import of “expensive” oil.

Another deterrent is competition from Russia. American LNG is more expensive than Russian pipeline gas. As a result, in 2017, gas supplies from the USA to Europe amounted to no more than 3 billion cubic meters of gas. Meanwhile, gas consumption in Europe last year reached 500 billion cubic meters. In an attempt to reverse the trend, in the same 2017, the US Congress voted in favor of a package of sanctions that put under “threat the construction of any new gas pipeline” in Europe with the participation of Russia. In general, it was supposed to launch sanctioned weapons against Moscow by the time the LNG production in the USA reaches full capacity – by 2020-2022. On December 21, 2019, when the United States imposed sanctions against companies engaged in laying NS-2, foreign project contractors suspended all operations.

It cannot be ruled out that if and when the EU sees American LNG as a good alternative to Russian gas, Brussels may choose to swap restrictions on gas supplies from Russia to Europe. The political will to “pay extra for energy security” is also present in a number of European countries. Another scenario could feature a US attempt to force a price war on Moscow, to guarantee dumping in the European direction. In this case, Nord Stream-2 will fall not only under political, but also under direct financial pressure. But it’s hard to imagine how the US authorities are going to convince their power engineers to supply Europe at a loss?

Meanwhile, the long-term strategy of the United States, according to a number of Russian analysts, may not boil down to the struggle for the gas market, but for its transformation by analogy with the oil market. If it were possible to block the maximum number of existing and under construction pipelines, the lion’s share of gas in the world would go by sea in the form of LNG. This would help “untie” gas prices from oil and transform the international gas market into a single, global and spot one where transactions are quick and are made in US dollars to minimize costs and risks. Thus, the main goal of the hype around the “shale revolution” and the “seizure of the global gas market” is to keep the global oil and gas market tied to the US dollar.

The price war declared by Saudi Arabia may put an end to such plans. That the situation in the United States has reached a critical point becomes clear on the basis of recent statements from Washington. According to US media reports, on March 26, the US Secretary of State called on Saudi Arabia to “stop the price war with Russia”. Texas shale producers have urged state officials to “consider reducing oil production … due to falling demand”. On March 30, at the initiative of the White House, there was a telephone conversation between Vladimir Putin and Donald Trump. The two parties agreed to hold “Russian-American consultations” “on the current state of the world oil market” “on the level of ministers of energy”. Markets took the news with some hope of  concluding a comprehensive agreement on the regulation of oil production between Moscow, Washington and Riyadh.

Europe, in the event of further blockage of the Nord Stream 2 project, risk falling hostage to Washington’s geopolitical ambitions, what with its statements about the intention to fill the market with its LNG. But this may undermine the economic leadership of Germany, and, accordingly, the policy of strengthening EU unity. Finally, if, after all the current cataclysms, the European Union is still adamant to fight for energy independence, it will have to think how to reduce the share of international commodity trade in dollars. Back in September 2018, the then head of the European Commission, Jean-Claude Juncker, said it was “absurd” for the EU to pay for 80% of its energy imports in dollars, considering that these imports are estimated at 300 billion euros per year. And this is despite the fact that only 2% of Europe’s energy imports come from the United States.

Rumors circulating in the oil market are about the possibility of behind-the-scenes agreements between the United States and Saudi Arabia, which will be directed  against Moscow. At the same time, The Financial Times writes, “Russia’s major oil companies have every chance of surviving a drop in oil prices over the next two years, taking into account the advantages that they have over foreign competitors.” For example, Russian oil companies will remain profitable even at a barrel price of $ 15.

Significantly, the ability of the Russian fuel and energy complex to effectively resist price fluctuations is largely the result of Western sanctions. For example, “a large part of the costs and debts” of Russian oil companies is denominated in rubles. At the same time, the ruble exchange rate is free, “floating,” while the currencies of the KSA and the UAE are tightly tied to the dollar. The decline in the ruble leads to an increase in export revenues. The Russian tax system flexibly responds to falling oil prices. Finally, “the country’s oil companies have built up large foreign exchange reserves in recent years”.

Russia’s positions in the European gas market remain strong as well. Despite the year-on-year increase in political and sanction pressure, as well as the decline in contract prices, Russia accounts for a third of the European market. The Russian leadership, as well as Gazprom, have repeatedly emphasized their commitment to completing the Nord Stream 2. The energy strategy of Russia until 2035 provides for the progressive development of new projects in the LNG sector, where world trade is expected to increase to 70% by 2040.

Thus, the current state of the global oil and gas market is determined by three key factors: the price war, the coronavirus pandemic and, as a result, an excess of oil supply. In addition, the situation in the world economy may break the sad “records” of the 2008-2009 crisis. According to the estimates of the Xinhua News Agency, the whole world is “in survival mode.” In such circumstances, each of the supplier countries faces a dilemma: to fight for a greater market share in the hope of beating the competitors, or try to coordinate efforts to stabilize prices. It seems that the struggle for exhaustion is the last thing the world community needs now. For this reason, Moscow calls for dialogue and a return to constructive cooperation, which hinges on a thorough analysis of the long-term consequences of decisions made.

From our partner International Affairs

Continue Reading
Comments

Energy

Gas doom hanging over Ukraine

Published

on

The long history of gas transit across independent Ukraine began with Kiev’s initial failure to pay anything for Russian natural gas, both intended for transit to Europe and for domestic consumption, on the pretext of fraternal relations between the former Soviet republics. Later it cost the Ukrainians a meager $25 for 1,000 cubic meters of Russian gas, and that ridiculously small sum remained unchanged for quite some time. The sizeable amount of Russian gas provided at a discount price, plus domestically available oil resources, were distributed by the country’s greedy elite the following way: domestically produced gas was used on utilities, proceeds from the transit of Russian gas went to the state budget (minus the money that lined bureaucratic pockets), and Russian gas – to the industry (plus the corruption component).

Then came the Ukrainian revolutions and Kiev’s desire to join “Euro-Atlantic structures” and the desire to “get off the Russian gas needle and prevent the Kremlin from using energy as a weapon.” Ukraine has tried and is still trying to believe in all this by playing up to the collective West and hoping that the West will compensate Kiev for the losses caused by its revolutionary endeavors and anti-Russian antics. As a result, we see gas prices going through the roof, an energy crisis in Europe, and the completion of the Nord Stream 2 gas pipeline.

Those in power in Kiev hoped for the very last moment that the West valued their country more than it did the energy security of European countries. Much to their surprise (and only theirs), this is not so. It looks like the Europeans are interested in Russian gas supplies and are not so eager to keep Ukraine as the main transit country. Moreover, having “democratized Ukraine” to the state of an openly anti-Russian country, the West turned it into a country, whose leadership the Kremlin does not really want to talk to simply because it does not see any point in doing this. This is the reason why third countries care (or rather pretend to care) about Ukraine. Thus, in July of this year, there came out the “Joint Statement of the United States and Germany on Support for Ukraine, European Energy Security and Our Climate Goals.” According to it, Germany pledged to do everything in its power to make sure that the agreement between Moscow and Kiev on the transit of Russian gas across Ukrainian territory was extended for up to ten years. The statement came when it was already obvious that the construction of Nord Stream 2 would be completed, Germany resisted US pressure on this issue, Moscow paid no attention and Washington, exhausted by the battles of the presidential elections and the search for new strategies in the Old World, was trying to pit America’s European friends against Russia.

It has never been a secret that the West needs reliable transit, and this is something that Ukraine also insists on. However, Kiev has officially labelled  Russia as an “aggressor country,” which means that this very “aggressor” must ensure this transit and bring billions of dollars in revenues to the Ukrainian budget. This looks like a kind of “Euro-schizophrenia” where Ukraine is an anti-Russian country and simultaneously serves as a reliable transit country for Russian gas. Things do not work this way, however, and it looks like Europeans are beginning to realize this. Therefore, most of the European consumers support Nord Stream 2 even though they do not show this in public. Suffice it to mention the recent conclusion of a years-long contract for gas supplies to Hungary.

Vladimir Putin’s statement, made amid soaring gas prices and growing threats to European industry, came as an energy lifeline for all Europeans.

“Russian President Vladimir Putin supported the initiative of Deputy Prime Minister Alexander Novak to increase gas supply on the market amid rising energy prices in Europe… Novak said that Russia can stabilize the situation with prices by providing additional volumes of gas on the exchange, adding that this country’s main priority is to accommodate domestic demand,” Lenta.ru reported.

Commenting on the possibility of increasing gas supplies via Ukraine, President Putin recalled that Ukraine’s gas transport system had not been repaired “for decades” and that “something could burst” there any time if gas pressure goes up.

“At the same time, it is more profitable and safer for Gazprom to operate new pipeline systems,” he added. Putin thus confirmed what is already clear to all that Ukraine is an unreliable and, in fact, an extra link, and that Europe can get gas bypassing technically and politically unreliable Ukrainian pipes. He also pointed out that Gazprom would suffer losses from an increase in gas transit via Ukrainian territory, while new gas pipelines offer cheaper transit options. He added that Gazprom is saving about $3 billion a year by using new pipelines and that Russia was ready to increase gas supplies and make them cheaper for European consumers.

Gas shortages have already forced the Ukrainian government to freeze gas prices for household consumers, but prices for gas for industrial enterprises are rising along with those on European exchanges, where on October 6, they reached a very impressive $ 2,000 per thousand cubic meters and went down only after Putin’s statement came out.

Meanwhile, the head of Ukraine’s Federation of Glass Industry Employers, Dmitry Oleinik, said that this [rise in gas prices – D.B.] would lead to an inevitable rise in prices. However, producers will not be able to jack up prices indefinitely, because at some point buyers simply will not be able to cover production costs.

“The Ukrainian consumer will not even be able to cover the cost of production. Plants and factories will slowly shut down and people will lose their jobs – this is already very serious. Budget revenues will “plummet,” and expenses will skyrocket… The issue of bankruptcies is just a matter of time,” Oleinik warned.

If Ukraine continues to follow the chosen course, it will face de-industrialization. By the way, this will suit the West, but certainly not the Ukrainian industrial oligarchs, who have long been eyeing agriculture, including the prospect of turning themselves into land barons. However, the farming sector will not be happy about the high prices on gas that bakeries, sugar factories and greenhouses run on. There will be nowhere to run.

Apart from purely practical realities, the conclusions I can draw from the current energy situation in the world and Vladimir Putin’s statements regarding the Ukrainian transit, are as follows:

  • Gas supplies through Ukraine and to Ukraine are not solely an economic issue, given Kiev’s endless anti-Russian escapades;
  • This problem affects the energy security of Europe;
  • Since there are several angles to this problem, it must be solved in a comprehensive manner;
  • At the same time, this cannot be done exclusively in the interests of the West and Ukraine to the detriment of the interests of Russia.

As you can see, it is once again up to Kiev and its shadow patrons to decide. And winter is just around the corner…

From our partner International Affairs

Continue Reading

Energy

Russian Energy Week: Is the world ready to give up hydrocarbons?

Published

on

In an official message to mark the opening of the Russian Energy Week international forum on 13-15 October in Moscow, Russian President Vladimir Putin stressed that there are numerous issues on the agenda related to current trends in the global energy market, including improvements to industry infrastructure and the introduction of modern digital technologies into its operation.

“The efficiency of energy production and consumption is the most important factor in the growth of national economies and has a significant impact on people’s quality of life. Many countries have already adopted policies to accelerate the development of clean energy technologies,” he wrote in the message to guest and participants.

“The forum business programme is therefore set to look in detail at the possibility of developing green energy based on renewable sources and the transition to new, more environmentally friendly fuels. I am confident that the events of the Russian Energy Week will allow you to learn more about the achievements of the country’s fuel and energy sector, and that your initiatives will be put into practice,” Putin said.

Leaders of foreign states have also sent greetings to the participants and guests. For instance, President of the Republic of Angola João Manuel Gonçalves Lourenço, Prime Minister of Vietnam Pham Minh Chinh, Crown Prince of Abu Dhabi Armed Forces Mohamed bin Zayed bin Sultan Al Nahyan, and Vice Premier of the State Council of China Han Zheng.

In their greetings, it generally noted the importance of the topics to be discussed at the forum as well as the need to build an international dialogue and consolidate efforts to achieve the sustainable development goals, including as regards climate change.

The programme covers a wide range of issues of transformation and development in the global energy market. In the context of energy transition, the issues of energy development are inextricably linked with the introduction of new technologies, and the transformation aimed at reducing greenhouse gas emissions into the atmosphere. Climate protection is a task that cannot be solved by one country; it is a global goal, which can be achieved through building dialogue and cooperation between countries.

The participants in the discussion will answer the question: Is the world ready to give up hydrocarbons? In addition, during the panel session, the participants will discuss whether oil, gas and coal are really losing ground in the global energy sector; whether the infrastructure will have time to readjust for new energy sources; how long will there be enough hydrocarbons from the field projects that are being implemented; and whether an energy transition using fossil fuels is possible.

The international climate agenda is forcing many countries to reform their carbon-based energy systems. For Russia, which holds a leading position in the global hydrocarbon markets, the transition to development with low greenhouse gas emissions presents a serious challenge, but at the same time it opens up new opportunities for economic growth based on renewable energy, hydrogen technologies, advanced processing of raw materials and implementing green projects.

The Climate Agenda included sessions dedicated to the operation of the Russian fuel and energy sector in the context of energy transition, the impact of the European green pivot on the cooperation between Russia and Europe, as well as the session titled ‘The Future of Coal in a World Shaped by the Climate Agenda: The End, or a New Beginning?’

Sessions of the ‘New Scenarios for the Economy and the Market’ track are dedicated to the global challenges and opportunities of the electric power industry; the impact of ESG on the Russian fuel and energy sector; the potential for the renewable energy sources; and other issues of the future of energy.

The Russian Energy Agency under the Ministry of Energy brings together experts from key international analytical organizations to discuss the future of world energy during the session titled International Energy Organization Dialogue: Predicting the Development of Energy and Global Markets.

The Human Resource Potential of the Fuel and Energy Sector, participating experts will discuss the prospects for developing the professional qualification system, and a session titled Bringing the Woman’s Dimension to the Fuel and Energy Sector. Optimizing regulation in the energy sector and organizing the certification and exchange of carbon credits in Russia are the basis of the Regulatory Advances in Energy. 

Anton Kobyakov, Advisor to the Russian President and Executive Secretary of the Russian Energy Week 2021 Organizing Committee, said “the level of various formats of international participation testifies to the importance of the agenda and Russia’s significant role in the global energy sector. We are a reliable strategic partner that advocates for building international cooperation based on the principles of transparency and openness. With the period of major changes in the industry, it is particularly important to engage in a dialogue and work together to achieve both national and global goals.”

The forum, organized by the Roscongress Foundation, the Russian Ministry of Energy, and the Moscow Government, brought together many local and foreign energy and energy-related enterprises. The speakers attending included  Exxon Mobil Corporation Chairman of the Board of Directors and CEO Darren Woods, Daimler AG and Mercedes-Benz AG Chairman of the Board Ola Kallenius, BP CEO Bernard Looney, and TotalEnergies Chairman and CEO Patrick Pouyanné.

Continue Reading

Energy

World Energy Outlook 2021 shows a new energy economy is emerging

Published

on

A new energy economy is emerging around the world as solar, wind, electric vehicles and other low-carbon technologies flourish. But as the pivotal moment of COP26 approaches, the IEA’s new World Energy Outlook makes it clear that this clean energy progress is still far too slow to put global emissions into sustained decline towards net zero, highlighting the need for an unmistakeable signal of ambition and action from governments in Glasgow.

At a time when policy makers are contending with the impacts of both climate change and volatile energy markets, the World Energy Outlook 2021 (WEO-2021) is designed as a handbook for the COP26 Climate Change Conference in Glasgow, which offers a critical opportunity to accelerate climate action and the clean energy transition. The new analysis – which the IEA is making available for free online – delivers stark warnings about the direction in which today’s policy settings are taking the world. But it also provides clear-headed analysis of how to move in a well-managed way towards a pathway that would have a good chance of limiting global warming to 1.5 °C and avoiding the worst effects of climate change.

The WEO-2021, the IEA’s annual flagship publication, shows that even as deployments of solar and wind go from strength to strength, the world’s consumption of coal is growing strongly this year, pushing carbon dioxide (CO2) emissions towards their second largest annual increase in history.

“The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,” said Fatih Birol, the IEA Executive Director. “Governments need to resolve this at COP26 by giving a clear and unmistakeable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future. The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense.”

The WEO-2021 spells out clearly what is at stake: what the pledges to reduce emissions made by governments so far mean for the energy sector and the climate. And it sets out what needs to be done to move beyond these announced pledges towards a trajectory that would reach net zero emissions globally by mid-century – the Net Zero Emissions by 2050 Scenario from the landmark IEA report published in May, which is consistent with limiting global warming to 1.5 °C.

As well as the Net Zero Emissions by 2050 Scenario, the WEO-2021 explores two other scenarios to gain insights into how the global energy sector may develop over the next three decades – and what the implications would be. The Stated Policies Scenario represents a path based on the energy and climate measures governments have actually put in place to date, as well as specific policy initiatives that are under development. In this scenario, almost all of the net growth in energy demand through 2050 is met by low emissions sources, but that leaves annual emissions still around today’s levels. As a result, global average temperatures are still rising when they hit 2.6 °C above pre-industrial levels in 2100.

The Announced Pledges Scenario maps out a path in which the net zero emissions pledges announced by governments so far are implemented in time and in full. In this scenario, demand for fossil fuels peaks by 2025, and global CO2 emissions fall by 40% by 2050. All sectors see a decline, with the electricity sector delivering by far the largest. The global average temperature rise in 2100 is held to around 2.1 °C.

For the first time in a WEO, oil demand goes into eventual decline in all the scenarios examined, although the timing and speed of the drop vary widely. If all today’s announced climate pledges are met, the world would still be consuming 75 million oil barrels per day by 2050 – down from around 100 million today – but that plummets to 25 million in the Net Zero Emissions by 2050 Scenario. Natural gas demand increases in all scenarios over the next five years, but there are sharp divergences after this.

After decades of growth, the prospects for coal power go downhill in the Announced Pledges Scenario – a decline that could be accelerated further by China’s recent announcement of an end to its support for building coal plants abroad. That move may result in the cancellation of planned projects that would save some 20 billion tonnes in cumulative CO2 emissions through 2050 – an amount similar to the total emissions savings from the European Union reaching net zero by 2050.

The differences between the outcomes in the Announced Pledges Scenario and the Net Zero Emissions by 2050 Scenario are stark, highlighting the need for more ambitious commitments if the world is to reach net zero by mid-century.

“Today’s climate pledges would result in only 20% of the emissions reductions by 2030 that are necessary to put the world on a path towards net zero by 2050,” Dr Birol said. “Reaching that path requires investment in clean energy projects and infrastructure to more than triple over the next decade. Some 70% of that additional spending needs to happen in emerging and developing economies, where financing is scarce and capital remains up to seven times more expensive than in advanced economies.”

Insufficient investment is contributing to uncertainty over the future. Spending on oil and natural gas has been depressed by price collapses in 2014-15 and again in 2020. As a result, it is geared towards a world of stagnant or even falling demand. At the same time, spending on clean energy transitions is far below what would be required to meet future needs in a sustainable way.

“There is a looming risk of more turbulence for global energy markets,” Dr Birol said. “We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead. The way to address this mismatch is clear – a major boost in clean energy investment, across all technologies and all markets. But this needs to happen quickly.”

The report stresses that the extra investment to reach net zero by 2050 is less burdensome than it might appear. More than 40% of the required emissions reductions would come from measures that pay for themselves, such as improving efficiency, limiting gas leakage, or installing wind or solar in places where they are now the most competitive electricity generation technologies.

These investments also create huge economic opportunities. Successfully pursuing net zero would create a market for wind turbines, solar panels, lithium-ion batteries, electrolysers and fuel cells of well over USD 1 trillion a year by 2050, comparable in size to the current oil market. Even in a much more electrified energy system, major opportunities remain for fuel suppliers to produce and deliver low-carbon gases. Just in the Announced Pledges Scenario, an additional 13 million workers would be employed in clean energy and related sectors by 2030, while that number doubles in the Net Zero Emissions by 2050 Scenario.

Continue Reading

Publications

Latest

Trending