IBP supports the launch of a study by the Catavento consulting firm on the energy transition from oil and gas
The analysis addresses criteria that should be adopted to define which countries are best prepared to begin shifting away from O&G production and consumption
Meeting the targets set out in climate agreements is a collective responsibility, and the oil and gas sector has contributed to this process by reducing its emissions through increasingly robust investments in innovation, technology, energy efficiency, renewable energy, and nature-based solutions. To assist the sector in making decisions aimed at accelerating this process, the study “Transitioning away from fossil fuels in energy systems” – conducted by the consulting firm Catavento in partnership with the IBP and the Climate and Society Institute (iCS) – will be launched on April 2, at the first preparatory event for COP-30, in Rio de Janeiro.
The study aims to help companies and governments define criteria and improve efforts that enable actions to ensure energy security and reduce emissions, in addition to providing society with reflections on how the oil and gas sector can contribute to a fair, balanced, and equitable energy transition.
“We want to show that we are also part of the solution to achieve emission reduction targets and discuss with all public and private actors the best way to conduct the transition process. One of the reflections brought up by the study is to reduce the supply of oil and gas simultaneously with demand to avoid economic, social, and to secure energy supply impacts. In that way, we will make an energy transition that is fair for everyone,” emphasized Roberto Ardenghy, president of the IBP.
Economic impacts
The survey evaluated eleven countries from seven different regions, considering five criteria categories to provide a broad overview of the oil and gas industry and its contribution to global development. One of the indicators that reinforces the relevance of O&G activity is its socioeconomic role. Between 2018 and 2022, for example, about 50% of the sector’s revenue (US$ 8.5 trillion) went to governments, mainly in the form of taxes.
The industry is also a major employer. In 2023 alone, employment in O&G supply reached 12.4 million people (18% of the energy sector), with 8.2 million in oil and 4.2 million in natural gas. In the same year, the oil and gas sector accounted for 51% of the global energy mix and around 60% of global electricity generation.
Decarbonization
The assessed scenarios also point to considerable demand for oil and gas, with their share in the global energy mix remaining at current levels over the coming decades. As a way of reducing greenhouse gas emissions during periods of high demand, the industry’s strategy is to invest increasingly in projects to improve energy efficiency in operations and implement large-scale carbon capture, utilization, and storage (CCUS) technologies. In this context, countries and companies that produce oil with lower carbon intensity, such as Brazil, will be better positioned in the global energy market.