DAVOS, SWITZERLAND (AP) – The head of the International Energy Agency is urging countries and investors not to use Russia’s invasion of Ukraine as a reason to increase fossil fuel investments.
Speaking on an energy panel yesterday at the World Economic Forum in Davos, Switzerland, Fatih Birol said the immediate response to energy shocks from the war should be an increase of oil and gas on the market. But that did not mean large and sustained investments in fossil fuels. Instead, he said efficiencies, such as reducing leaked methane and even lowering thermostats by a few degrees this winter in Europe, would help ensure adequate energy supply. Russia is a major supplier of oil and natural gas, with the invasion sending European countries scrambling to reduce their reliance on Moscow.
Occidental Petroleum CEO Vicki Hollub countered that oil and gas industries had a central role to play in the transition to renewable energy. She said the focus should be on making fossil fuels cleaner by reducing emissions.
Hollub said Occidental had invested heavily in wind and solar energy and planned to build the world’s largest direct air capture facility in the Permian Basin, spanning parts of Texas and New Mexico. Direct air capture is a process that pulls carbon dioxide out of the air and sequesters it.
Meanwhile, governments need to “make it worth the while for private industry” to invest large sums into carbon dioxide removal technologies, said a top United States (US) Government advisor on clean energy and climate change policy.
“(Governments) can do this through tax incentives…you can do this through public procurement. There’s a range of ways to make it worth private industries while,” said senior director for clean energy and innovation for the US department of state Varun Sivaram.
The most recent report by the United Nation’s Intergovernmental Panel on Climate Change estimates that the deployment of carbon capture removal technologies is far behind what’s needed to meet internationally set warming targets.
“We need a scale up of a factor of one million to get to where we need to go. And that means that by 2050, this (carbon dioxide removal technology) needs to be the size of the oil and gas industry,” said Chief Executive Officer Christian Mumenthaler of insurance group Swiss Re.
The Vice Chair of carbon removal investment company Carbon Direct Nili Gilbert said “the enormous scale of the opportunity… captures the imagination of finance” and encouraged significant participation from the financial industry.
