What is the role that the oil and gas industry should play in the energy transition? Does it have one?

Sep 24, 2024

Bjorn Otto Sverdrup, chair of the Oil and Gas Climate Initiative, and Gernot Wagner, a climate economist, dive into the oil and gas industry's role in the energy transition. They discuss how the industry can leverage its resources to develop cleaner technologies while tackling methane emissions urgently. Sverdrup emphasizes immediate actions, while Wagner warns against short-term fixes that may hinder ambitious long-term targets. Their conversation highlights the challenges and necessity of balancing immediate solutions with overarching sustainability goals.

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INSIGHT

Oil and Gas Industry's Challenge

The oil and gas industry faces a two-fold challenge in the energy transition.
It must develop lower-carbon solutions while reducing emissions from existing operations.

INSIGHT

Climate Change's Shocking Uncertainty

Climate change consequences are shocking because of the uncertainties involved.
The unknown aspects make the impacts much worse than anticipated.

ANECDOTE

Gas Furnaces vs. Heat Pumps

Switching to a more efficient gas furnace cuts emissions now but locks in fossil fuel use.
Transitioning to electric heat pumps is essential for full emissions reductions.

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We kick off our series of podcasts at Climate Week, by looking at the role that the oil and gas industry can play in the energy transition. Host Ed Crooks is joined by Bjorn Otto Sverdrup, who chairs the executive committee of the Oil and Gas Climate Initiative, a group backed by 12 of the world’s largest oil companies that works on ways to reduce emissions.

Oil and gas companies play a crucial role in providing the energy the world needs today. But the transition means shifting to lower-emitting sources and technologies. So can the oil and gas industry really play any constructive role in our energy future?

Bjorn says the industry's challenge is twofold: using its capital and capabilities to develop new, lower-carbon energy solutions, while at the same time work to improve the existing energy system to reduce emissions. In the short term, reducing methane emissions is one of the most important actions the oil and gas sector can take to combat climate change.

Also joining the show is Gernot Wagner, a climate economist at Columbia university. He argues that while getting methane emissions down is important, there’s a need for more long-term, large-scale, thinking. Immediate emissions reductions of 5% or 15% may be great, but not if they distract from the more ambitious goals of getting to 90% or 100% reductions. Switching to a more efficient gas furnace may cut emissions now, but it locks in fossil fuel dependence for decades. Instead, transitioning to electric solutions such heat pumps is essential to achieve the full reduction needed over the coming decades.

The gang open the Climate Week discussions with a debate on this short-term versus long-term goal-setting. What short-term fixes make sense? Are we letting the perfect be the enemy of the good? What kind of price on carbon do we need? And what exactly is the long-term role of the oil and gas industry as we move to net zero?

Let us know what you think. We’re on X, at @theenergygang. Subscribe to the show so you don’t miss any of the Climate Week discussions.

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