The ‘new oil’
The “staggering growth” of clean energy means the path to stay under 1.5 C of heating is still open, declared the head of the world’s top energy agency this week.
There’s reason to be skeptical — “1.5 to stay alive” is the rallying call of Pacific island states but we’ve been pushing the thermometer right up there over the past few months and the global carbon spew keeps rising, not falling. Still, when the world’s most authoritative energy outfit issues its first big assessment since 2021, it’s worth paying attention.
Particularly when the International Energy Agency says things like “no need for investment in new coal, oil and natural gas” if we’re going to meet our climate goals.
Or words that should reverberate even more strongly in bankers’ towers and oilpatch offices: “Demand for coal, oil and natural gas will all peak this decade even without any new climate policies.”
Couched in sterile language, these are seismic statements coming from an organization like the IEA. It’s a sign of the times, and still a bit disorienting. This is, after all, the organization set up by the world’s richest countries to keep crude flowing after the 1973 oil crisis. Canada is a founding member. The agency’s 31 member countries (and 13 association countries) count for 75 per cent of global energy demand.
The IEA is as close as we have to an authoritative global eye-in-the-sky on energy. In just the past few weeks, the agency has been invoked by Pierre Poilievre (approvingly) in his Conservative convention address and Danielle Smith (less favourably) at the World Petroleum Congress.
For many, many years, climate and human rights advocates have waged campaigns against the IEA for advising its member countries to follow pathways destined for climate chaos and mass casualties. Like certain ossified provincial and national agencies, the IEA repeatedly and wildly underestimated the growth in clean energy, ignored the buildup of climate policies and the decades of alarms from scientists.
Finally in 2021, the IEA mapped out what it would take to get to net zero by 2050. And this week, the agency dropped its next big assessment.
The “speed of the rollout of key clean energy technologies,” like solar and EVs, is so well underway that demand for fossil fuels will peak this decade, even without any new climate policies, said the agency (hence, Danielle Smith’s unfavourable reaction). IEA chief Fatih Birol warned that companies and governments expanding fossil fuel projects are taking “very unhealthy and unwise economic risks.”
The rollout of clean energy has upended conventional energy thinking. On some key fronts, the world is already tracking along a 1.5 C scenario.
“This is encouraging,” say the number-crunchers, but these transitions by themselves are “not nearly enough for the 1.5 C goal.”
The agency lays out what it’s going to take to move forward in a way that’s inclusive of the needs of developing countries and keeps temperatures from breaching 1.5 C. And it’s produced very clear markers we need to hit.
The to-do list is daunting but the agency distills it pretty clearly: “Electricity becomes the ‘new oil.’”
Starting yesterday, that means:
- No new oil and gas fields.
- No new “unabated” coal.
And by 2030 — now just seven years away — we need:
- Three times as much renewable energy.
- A doubling of energy efficiency.
- Cuts in methane from oil and gas of 75 per cent.
By 2035, advanced economies need to cut carbon emissions by 80 per cent. For perspective, Canada’s stated goal is to cut 40 per cent by 2030.
By 2050, power generation has to be 90 per cent renewable. Nuclear energy would have to double and the energy system as a whole has to be at least 50 per cent electric.
When Pierre Poilievre cited the IEA in his leader’s address, he was making the case that oil and gas will be used for years to come. Which the agency does forecast. But how much? If we take climate change seriously, that “drives sharp declines in fossil fuel demand” and “higher-cost producers are squeezed out of a declining market.”
As for the oilpatch dreams of carbon capture, the IEA does see a role for the technology … for products without other options. Oil for transportation and gas for heating are replaced by electrification.
The IEA has drastically reduced the amount it thinks we can rely on carbon capture, cutting its projections by half since its assessment two years ago: "So far, the history of CCUS (carbon capture, utilization and storage) has largely been one of unmet expectations.”
As for the role of carbon capture in oil production? The whole idea has always been pretty sketchy since it ignores the vast majority of greenhouse gas emissions that come from burning the gasoline and diesel in vehicle engines.
Here’s how a net-zero scenario plays out: Fossil fuels with CCUS are the weird stripy bits in the bars below and oil is the one with red stripes. Can you make it out? Me neither.
The good news is that the key things we need to do are “well understood, most often cost-effective and are taking place at an accelerating rate.” We know how to deploy renewables and a lot of the efficiency gets taken care of with electrification. Electric motors are two to four times more efficient than internal combustion engines, heat pumps are three to five times more efficient than fossil furnaces, induction stoves are twice as efficient as gas.
In fact, 80 per cent of what needs doing this decade comes from just four areas: “increasing electrification with technologies available today,” boosting renewables, improving efficiency and cutting methane.
It all sounds so reasonable. So sensible. If only the models could account for the humans.
Wealthy countries have already pledged to lead the way. Yet, we have governments in the richest economies putting a freeze on renewable energy and mounting public campaigns against it, like Alberta is doing. Or junking cross-party consensus to stoke culture wars over climate policy, like the U.K.’s prime minister just did. Five of the richest countries in the world are responsible for over half of planned oil and gas expansion through 2050. In order, they are: the United States, Canada, Australia, Norway and the United Kingdom.
Even in the models, the scale of action is formidable. To keep 1.5 alive, the IEA figures we need 80 per cent cuts in carbon pollution from advanced economies — in the next 12 years. Take just one practical example: two million kilometres of new electricity transmission, every year. Not impossible, but it will require concerted co-operation.
One of the most piercing observations I’ve ever heard about the sterile world of charts crashing into the messy world of humans actually came from one of the quants: Can we really limit global warming well below 2 C? “Yes, but only in a model.”
But as climate experts repeatedly remind us, every fraction of every degree matters. And, wherever we might end up, the IEA focuses on the “fierce urgency of now.”
“Above all, this needs to be a unified effort in which governments put tensions aside and find ways to work together on what is the defining challenge of our time. All of us, and in particular future generations, will remember with gratitude those who act upon the urgency of now.