“The end of the oil age”… Is the world ready now?

At a time when the climate crisis has put the “end of the oil age” on the agenda, achieving it remains a difficult task, given the global economy’s heavy dependence on fossil fuels.

The activist in the Association of Oil Change International, Roman Iwallan, considers that many developments in 2021 “clearly showed that the (petroleum) industry has no future,” according to “AFP”.

In May, the International Energy Agency noted that an immediate halt to new investment in fossil energy projects is needed if the world is to achieve net zero carbon emissions by 2050 and have a chance of limiting warming to 1.5°C.

The call represented a revolution for an agency set up in the wake of the first oil shock in 1970 to protect energy security in rich oil-consuming nations.

The year 2021 saw a major event, the emergence of a coalition of countries at the COP26 climate summit in Glasgow that pledged to phase out oil and gas production, although no major oil and gas producing country joined this group.

“It is no longer a taboo to talk about the end of hydrocarbon extraction during international climate summits,” said Iwallan of Oil Change International.

Fossil fuels, which still account for 80 percent of energy consumed, are today explicitly the driver behind climate change, which they were not when the Paris climate agreement was reached in 2015.

More recently, environmentalists scored a symbolic victory, when oil giant Shell decided to abandon development of the controversial Campo oil field off Scotland, saying the investment “was not on strong enough foundations”.

“We have known for several years that the end of crude oil (..) is near. But is the world ready to live without oil? The world is still highly dependent on it, in my opinion,” said Moez Al-Ajmi, an energy expert at professional services company EY.

The International Energy Agency also believes that oil demand is still rising. It expects demand next year to reach its pre-pandemic level, which is just under 100 million barrels per day.

With crude oil prices rebounding in the past months, oil producers are enjoying liquidity and can pursue new projects.

“Those who say that the oil and gas industries are a thing of the past are mistaken, and talk about stopping new investments in oil and gas is misleading,” OPEC President Muhammad Barkindo said recently.

The head of French oil company Total Energy, Patrick Pouyanne, said he was “convinced that the transition will happen because there is real awareness, but it will take time.”

In his opinion, the issue is being mishandled: instead of focusing on reducing oil production, attention should be shifted to consumption.

Boyan said the demand for fossil fuels “will decline because consumers have access to new products such as electric cars.”

During the first half of the year, electric cars accounted for 7 percent of global car sales, according to Bloomberg New Energy Finance. While this percentage is still small, it is growing rapidly.

year of transformation

Ewallan believes that the arguments put forward by oil companies and producing countries are flimsy and focus on the short term. “They are trying to justify an unsustainable path at any cost. We are still far from a carbon-neutral economy of course, but it is the energy system investments that are being made today that will get us there,” he said.

Regardless of the prospect of the end of oil, the actors in the sector are still preparing for it in an unorganized manner with increasing pressure on them.

The two American oil giants, ExxonMobil and Chevron, were hesitant for a long time, but this year they finally announced investments in the energy transition.

“2022 is likely to be a truly transformative year,” said Tom Ellacott, senior vice president of energy research and advisory firm Wood Mackenzie. “It’s clear that sitting on the sidelines of decarbonization is not an option” given the increasing pressure on the oil sector.

Experts believe that 2022 will see more investment in wind and solar energy, as well as technology to capture carbon emissions from power plants and factories that run on fossil fuels.