In a world grappling with climate change and its repercussions, the oil and gas industry finds itself in a precarious situation. Companies within the sector are making bold claims about transitioning to renewable energies, but evidence suggests that their investments and actions may not always align with these pronouncements.
In 2022, Petrobras, a Brazilian oil and gas giant, set aside 68 locations for oil exploration along the South American coast and plowed $6.9 billion into oil development projects. Despite this massive investment in fossil fuels, the company was one of several industry representatives at the annual climate summit, COP27, where it expressed a commitment to renewable energies.
Algeria-based Sonatrach and the Abu Dhabi National Oil Co are among other oil behemoths that attended the summit. Sonatrach has set its sights on becoming a top five national oil company by 2030, while the Abu Dhabi National Oil Co has recently inaugurated 68 new gas stations in Saudi Arabia and the UAE.
However, an examination of these companies’ investment portfolios reveals a concerning lack of funds directed towards green energies like solar and wind power. The majority continue to pour billions into oil exploration and extraction.
Many companies are focusing on reducing operational emissions, yet Scope 3 emissions – those produced when customers use their products – are often overlooked. These emissions typically represent the largest share of a company’s emissions.
Petrobras, for instance, has allocated $4.4 billion to enhance its low-carbon position from 2023 to 2027. Nonetheless, the company’s planned investments in crude oil exploration and production are more than ten times this amount.
Norway-based Equinor provides a slightly more encouraging example. The company has pledged that 11% of its capital spending in 2022 will go towards the global goal of limiting warming to 1.5 degrees Celsius. It has further set a target of 30% by 2025.
However, an Associated Press review of nearly 40 oil and gas companies that participated in COP27 has cast doubt on the industry’s true commitment to the transition to green energy. The review suggests a significant gap between what companies say about renewable energy and what they are actually doing. Until this gap is bridged, the world’s march towards a sustainable future may remain slow and arduous.
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