Back to the complete issue
Tuesday, 18 May 2021

IEA calls for halting new oil and gas exploration projects

The International Energy Agency (IEA) is calling for an end to new oil and gas exploration to achieve net zero carbon dioxide emissions by 2050 and meet the Paris Agreement goals, the IEA said in its Net Zero by 2050 roadmap for the energy sector.

This is a pretty big rethink for an organization that the Financial Times dubs the West’s “oil watchdog.” The IEA says that these targets will require increasing annual energy investments from USD 2 tn to USD 5 tn by 2030, the bulk of which will be in clean energy, said IEA chief Fatih Birol. Demand for coal would need to drop by 90%, oil demand would need to shrink by 75%, and natural gas demand must drop to half by 2050, the report says.

It isn’t calling for an end to hydrocarbons though: Although exploration should stop, “continued investment in existing sources of oil production are needed,” the IEA said.

The IEA’s road map is in direct odds with Europe’s biggest oil producers, all of which have climate plans that include seeking out and developing oil and gas fields for years to come, Bloomberg reports

“Countries whose economies are relying on oil and gas revenues will face huge challenges,” adds Birol. Oil producing countries have long argued that investment in new fossil fuel projects was needed to meet the demand of emerging economies in Asia and Africa, but the IEA’s model is more severe than producers have prepared for, the salmon colored paper suggests.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.