Narrow path to net-zero means less fossil fuels, but some room for gas: IEA chief

The head of the International Energy Agency May 19 sought to clear up misunderstandings, particularly on the oil and natural gas sector, stemming from the "overwhelming reaction" to the IEA's new report calling for a wholesale transformation of the global energy economy to achieve net-zero carbon emissions by 2050.

While he commended the growing number of governments committing to a carbon-neutral world by 2050, IEA Executive Director Fatih Birol said that there was "a growing gap between the commitments, or in other words the rhetoric, and what is happening in real life."

As such, the IEA set out to "translate those government commitments for 2050 to, in the next 30 years what needs to happen and what actions need to be taken in the energy industry so that we can reach those targets," he said, speaking to the Columbia Global Energy Summit.

While the pathway laid out in the IEA's report is narrow, Birol said it was also still achievable with international collaboration and swift action by governments around the world in line with milestones identified in the report.

But Birol clarified that "this is a pathway, this is not the pathway."

"Different governments with different backgrounds, different priorities may come up with their own pathways, but we wanted to put it on the table in order to provide a framework for the international and national discussions," he said.

No new fossil investments

The IEA report, released May 18, lays out more than 400 milestones for what needs to happen and when to move the global economy from one dominated by fossil fuels to one predominantly powered by renewable energy.

Birol highlighted a few of them at the summit, including eliminating investments in new oil and gas fields, new coal mines and coal mine expansions this year; eliminating this year the need for unabated coal-fired power plants; banning sales of internal combustion engine cars by 2035; and achieving global net-zero electricity generation by 2040.

Jason Bordoff, founding director of the Center on Global Energy Policy at Columbia University, asked Birol about his past warnings on the risk of underinvesting in oil and gas supply too soon and how some critics of the report challenged the new call for no new investment in fossil fuel supplies as inconsistent.

Birol said that there is a risk if countries cut supplies but fail to reduce demand, pointing as an example to the potential for electric vehicles to lessen oil demand but the need for a ban on internal combustion engine car sales to create the balanced supply-demand picture. Likewise, there is also a problem, he said, if supplies are not cut as investments in fossil fuels are allowed to flourish, and the demand for EVs, for instance, dwindles as a result.

"If we did not have such a climate goal, then there is no problem," he added. Meeting the 2050 net-zero emissions targets will require an orderly transition that considers both supply and demand and governments that are serious about doing what is necessary, Birol said. "If they are not serious, then we don't reach that target, then of course there'll be a different oil demand and different oil supply picture."

Developing countries

Pressed further on what role he saw natural gas playing in the runup to 2050, Birol said the report does not say there should be no oil and gas by 2022.

"What we are saying is [fossil fuel] use will go down, much stronger in coal, less in oil and much less in natural gas," he said. "The investments in the already existing fields, approved fields will continue. We don't stop them. What we are talking about is developing in new fields, or no new exploration, for example, just to make it simple, no new exploration activity."

Bordoff noted that Nigerian Vice President Oluyemi Osinbajo, during a May 18 session at the summit, called it unfair and counterproductive to ask a country like his, which uses very little energy per capita, to halt gas development.

Birol said there should indeed be a difference in timing, obligations and actions "between the rich countries and the emerging countries," with an expectation that the rich countries should hit the milestones laid out in the report five years earlier than the others.

The report also calls on "the rich countries [to] support the emerging countries in terms of the technology and in terms of de-risking some of the green energy investment," Birol said.

To address a bottleneck in clean energy finance, the IEA will release a report June 9, in collaboration with the World Bank and World Economic Forum, on financing clean energy transitions in the emerging world, Birol said.

He stressed that he and the report make distinctions "between developed countries and developing countries, the no gas versus less gas, and also the fields which are already approved and the fields which are new to be discovered."