Yet, all the pledges from government and corporations are just tiny fractions of the true cost of the energy transition. If the world is to come anywhere close to limiting global warming to 2 degrees Celsius or below, it will need, collectively, a bare minimum of US$30 trillion to US$40 trillion of investment in energy systems and de-carbonization of industries where emissions are notoriously hard to abate such as steel and cement making.
Oil giants
Big oil companies have been frequently lambasted for trying to burnish their green credentials through half-hearted investments in renewables. That might have been true for much of the past decade, but it appears to be changing as the oil and gas majors have started putting down big money into clean energy. For instance, European oil majors including BP, Royal Dutch Shell, Eni SpA, Total SA and Norwegian Equinor ASA have already invested billions of dollars in renewable energy and made big clean energy commitments. Yet, Big Oil just can’t seem to catch a break, with stocks of oil and gas companies that are investing heavily in renewables being punished by the markets.
A good case in point is BP, one of the oil majors with some of the largest clean energy commitments. BP has announced plans to achieve net-zero status by 2030 by dramatically increasing its renewables spending. BP stock has, however, cratered 48% in the year-to-date, considerably worse than Europe’s oil and gas benchmark STOXX Europe 600 Oil & Gas Index (SXEP) which is down 32% in the year-to-date or even the Energy Select Sector Fund (XLE) which has lost 41%.
BP’s European peer Shell has probably done more than any other supermajor as far as investing in renewable energy goes. Recently, Shell CEO Ben van Beurden told investors that the company no longer considers itself an oil and gas company but an energy transition company. Shell has been vocal about the shift to renewables, frequently issuing the clarion call for the industry to switch to cleaner energy sources. In 2016, Shell had announced an ambitious goal to invest up to US$6 billion in clean energy projects by 2020.
US Automakers
A group representing major automakers vowed to work with President-elect Joe Biden on efforts to reduce vehicle emissions. John Bozzella, who heads the Alliance for Automotive Innovation representing General Motors Co, Volkswagen AG, Toyota Motor Corp, Ford Motor Co and most major automakers, said the group “looks forward to engaging with the incoming Biden administration ... to advance the shared goals of reducing emissions and realizing the benefits of an electric future.”
Biden has made boosting electric vehicles (EV) a top priority and pledged to spend billions to add 550,000 EV charging stations. He also supports new tax credits for EV purchases and retrofitting factories for EV production.
“The long-term future of the auto industry is electric,” Bozzella said in a statement after automakers held a virtual meeting. “We are investing hundreds of billions to develop the products that will drive this electric future, and we are committed to working collaboratively.”
Ford urged automakers to consider backing a framework deal with California on vehicle emissions in a bid to reach industry consensus before Biden takes office, but automakers did not immediately take that step.
Last week, GM abruptly announced it would no longer back the Trump administration’s ongoing effort to bar California from setting its own vehicle emissions rules. In October 2019, GM joined Toyota, Fiat Chrysler and other automakers in backing President Donald Trump in the California fight.
Environmental Working Group President Ken Cook said, “by continuing to support this futile fight, Toyota and Fiat Chrysler are signaling their disregard for cleaning our air, curbing the climate crisis and saving motorists millions at the gas pump.”
Ford, Honda Motor Co, Volkswagen and BMW in July 2019 struck a voluntary agreement with California on reducing vehicle emissions that is less stringent than Obama-era rules but higher than the Trump administration’s rollback .
Denmark to phase out
oil and gas production
Denmark's parliament has voted to phase out North Sea oil and gas production by 2050. The plan includes cancelling the country's eighth licensing round, which has attracted lackluster interest since its launch in 2018, and all future rounds.
"It is incredibly important that we now have a broad majority behind the agreement. There is no longer any doubt about the possibilities and conditions in the North Sea," Danish climate and energy minister Dan Jorgensen said.
Denmark will continue to review two outstanding applications in the eighth round from UK-based Ardent Oil to ensure "stability", Jorgensen said. But any licences awarded will be subject to the 2050 cut-off date for oil and gas extraction. Total, the largest operator in Denmark's upstream sector, has already withdrawn from the round.
Denmark's decision to end North Sea production comes six months after parliament set a legally binding target to reduce greenhouse gas (GHG) emissions by 70% by 2030.
Denmark began producing oil and gas in its sector of the North Sea in 1972. It has 19 oil and gas fields, 15 of them operated by Total on behalf of the Danish Underground Consortium (Duc), three operated by the UK's Ineos and one by US firm Hess.
The latest figures from the Danish Energy Agency put Danish crude production at 71,500 b/d in October and gas output at 130.9mn ft³/d. Production has been constrained since the Tyra field and its satellites were shut down for a redevelopment project in September last year. The project is not expected to be completed until the second quarter of 2023, having been delayed by a year by the Covid-19 pandemic.
