– Making significant new investments in oil and gas can be risky – E24

EQUINORS AUTUMN CONFERENCE, OSLO (E24): The head of the international energy agency believes the search for new oil and gas fields may be a bad investment. Moreover, it can endanger the climate issue.

Fatih Birol at this year’s fall conference in Oslo.

– We are in the midst of the world’s first energy crisis, International Energy Agency (IEA) chief Fatih Birol said from the stage at Equinor’s fall conference.

– But when we look back to this moment, ten years from now, I believe this year will not only be remembered for the global energy crisis, but for being a turning point in the history of the clean energy transition. , he said.

This is the 16th year that the fall conference has been organized. The conference is a collaboration between Equinor, the Department of Petroleum and Energy and the International Energy Agency IEA.

The backdrop for this year’s conference is a Europe facing an energy crisis: Russia has cut gas supplies to the continent, Germany has restarted coal-fired power plants to ensure enough power for the winter and electricity prices are exorbitant. At the same time, greenhouse gas emissions must be reduced.

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– A pillar of Europe’s energy security

Birol believes the current energy crisis is the biggest the world has ever faced. He points out that Russia is a dominant energy exporter, and that the country has invaded Ukraine.

– We see a new order in the energy sector, he says.

He stressed that geopolitical unrest creates challenges. Russia has cut gas supplies to Europe, causing major disruptions in the flow of energy globally.

– I would like to thank Norway for stepping up its exports to Europe in difficult times and for once again proving itself to be a reliable supplier to Europe.

– Norway is a pillar of Europe’s energy security, added Birol.

When asked if Norway should share some of its profits, Birol answered quite diplomatically. The IEA chief said he understood Norway had its challenges too, but that would be in line with Norway’s role as a responsible and global player. However, he did not go into details.

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Shouldn’t be looking for new oil deposits

At the same time, Birol made it clear that Norway does not need to search for new oil and gas fields.

We need Norwegian oil and gas to replace Russian oil and gas, but these must be produced from existing sources and deposits. We need to ramp up production from there, Birol told E24.

– Making large new investments in oil and gas can be risky for two reasons: first, it will jeopardize the climate problem, and second, if you make an investment in a new oil field today, production will come in seven or eight years later. At that time, we may not need to increase production – so it may be a bad investment, Birol said.

Fatih Birol was clear that the world does not need to search for new oil and gas deposits.

In May 2021, the IEA presented its plan for zero emissions in the energy sector, “Net Zero by 2050: a Roadmap for the Global Energy Sector”. Here too, it is clear that the IEA believes that the world does not need to search for new oil and gas deposits after 2021.

The plan contrasted with what Birol had previously stated, namely that “the world needs every drop of norwegian oile”.

– Nuclear makes its “return”

The head of the IEA then spoke enthusiastically to E24 about nuclear power which, according to him, is currently developing in several countries.

– Nuclear energy is making a “comeback” all over the world, Birol said.

He listed a number of countries that are working on new plans for nuclear power. Japan, Korea, Netherlands, France, UK, USA, Canada, China and India.

– It comes back because people understand that it is one of the safe sources of electricity, says Birol.

In addition, the new SMR technology is attracting a lot of attention, says the head of the IEA. SMR stands for Small Modular Reactors and is a new type of nuclear reactor which differs from traditional reactors.

– SMRs are easier to finance, and they are much more flexible. There is a very long queue of orders in developing and developed countries to be part of the SMR world, says Birol.

Strong growth in solar and wind development

From the stage, Birol pointed out that measures such as RePowerEU in Europe and the Inflation Reduction Act in the United States, as well as Japanese, Indian and Chinese plans can lead to a faster restructuring of the energy sector.

This comes at the same time as countries like Germany are restarting coal-fired power plants to have enough electricity in the winter of 2022 and 2023.

– We should not consider these small short-term measures, but look at the big picture. Several governments around the world are giving large sums to accelerate the transition. One of them is the United States with the Inflation Reduction Act. It puts on the table $400 billion in tax incentives and subsidies for things like batteries, solar cells, electrolysers, electric cars, etc. It will change the United States, says Birol.

He goes on to say that Europe has never seen such strong growth in the development of solar and wind energy.

– Energy security is a powerful driver for investing in renewable energy, he says.

– A turning point

In the IEA’s flagship report, released earlier this fall, the Paris-based agency said the global energy transition could accelerate after Russia’s invasion of Ukraine and high oil prices. energy over the past year.

“The global energy crisis triggered by Russia’s invasion of Ukraine is causing fundamental and lasting changes that have the potential to accelerate the transition to a more sustainable and secure energy system,” the IEA wrote in a statement. Press release.

In the report, Birol said the response of governments around the world could make the war in Ukraine a historic and definitive turning point towards a cleaner, cheaper and safer energy system.

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Chelsea Glisson

"Devoted reader. Thinker. Proud food specialist. Evil internet scholar. Bacon practitioner."

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