Our Perspective on Future Energy
As an oil and gas exploration and production company we face both challenges and opportunities as we provide affordable, reliable energy to the growing global population while also taking appropriate action on climate change issues.
Our approach to reporting has several facets, which include:
- A clear statement of our position and policy principles on climate change.
- Commitments, actions and results including our emissions, reduction projects, and planning approach.
- Description of potential climate change risks and our use of a scenario planning process to test our future strategies against these risks.
- Engagement in dialogues and partnerships with diverse stakeholders on climate change issues and our approach.
We continue to update the information in our report about carbon asset risk based on advice and feedback from our stakeholders. Information about our recent performance and engagement can be found in our annual Sustainability Report.
In the 2016 World Energy Outlook, the International Energy Agency (IEA) illustrated a range of different energy mix scenarios in 2040. Fossil fuels currently make up around 80 percent of the energy mix today. Through 2040, total energy demand is predicted to grow in all scenarios and global population is anticipated to grow by almost 3 billion people. Even in the IEA’s 2-degree (450ppm) scenario, oil and gas demand would remain similar to current levels, with a growth in gas demand largely offsetting a decline in oil demand.
Changes in the energy system take time. Different forms of energy infrastructure tend to have long asset lives. And changes need to go beyond changing the power generation system, to include changing automobile fleets, truck fleets, ships and aircraft specifications.
Achieving the IEA’s 2-degree scenario requires significant progress on a number of fronts: improving energy efficiency of power generation, transportation and industrial processes; reducing emissions from fossil fuels or capturing and storing those emissions; and increasing the amount of non-carbon energy we use such as renewables and nuclear power. Increasing the amount of renewable power also requires significant improvement in the amount of time that wind and solar produce electricity to reduce the amount of back-up fossil fuel generation needed or a significant improvement in energy storage.
This is why scenario planning is so important; there is not just one pathway to a 2-degree future because there are numerous ways in which government action and technology development could interact with consumer behavior to bring about a lower carbon future. Additional information on this subject and the role that our industry can play can be found in IPIECA’s Low Emissions Pathways paper.