Norway’s Statoil in a report calls for more policy, industry and consumer action to reduce greenhouse gas emissions and reach the goals of the Paris climate agreement, but at the same time adds that more oil and gas exploration will be needed to meet global energy demand in 2015.
The state-owned oil and gas giant in its “Energy Perspectives 2018 – long-term macro and market outlook” says the 2-degree Celsius target set in Paris requires substantial improvements in energy efficiency and a rapid change in the global energy mix.
“The climate debate is long on targets, but short on action. We believe it’s possible to achieve climate targets set out in the Paris agreement, but that requires swift, global and coordinated political action to drive changes in consumer behaviour and shift investments towards low carbon technologies. Delaying actions will make it very hard to reach the climate targets,” says Equinor’s chief economist Eirik Wærness.
Equinor recently has changed its name from Statoil to reflect its growing orientation towards the energy transition. The company has emerged as a significant player in the offshore wind sector, and expects to invest up to 20% of its total Capex in renewables by 2020.
The report published for its 8 th consecutive year presents three scenarios – reform, renewal and rivalry – for the global energy system considering macroeconomic development, global energy demand, greenhouse gas emissions, the energy mix and oil and gas markets towards 2050.
CO2 emissions last year increased, as did oil and gas demand, Equinor says. The report adds that although electrification in the transport sector increases, it is far from keeping pace with the overall growth in global vehicle sales.
In the renewal scenario, 49% of electricity demand in 2050 will be met by new renewable energy compared to around 5% in 2015, the report says. That growing demand and the need to phase out coal and reduce fossil fuels imply an enormous call for investments in new generation capacity, infrastructure and storage technologies.
Still, the demand for natural gas in 2050 will only be 10% below that of 2015 even in the scenario consistent with the 2-degree target, the oil firm estimates, while oil demand is seen declining by 38%.
In the rivalry scenario that is driven by geopolitical conflict and other political priorities than climate change, energy demand and emissions will be higher, caused by the volatility and lack of coordination across borders, resulting in slower improvement in energy efficiency and coal keeping most of its position as an energy source.
“Unfortunately, we currently see too many signs of the Rivalry-scenario. If continuing, they will negatively impact necessary global collaborative efforts and economic growth which are keys to drive the world in a sustainable direction,” says Wærness.
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