[Why Chevron and Exxon are doubling down on fossil fuels, despite
what the International Energy Agency says about our renewable future.]
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FOSSIL FUEL DEMAND IS PREDICTED TO PEAK BY 2030. OIL GIANTS ARE
BETTING AGAINST IT.  
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Kate Aronoff
October 25, 2023
The New Republic
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_ Why Chevron and Exxon are doubling down on fossil fuels, despite
what the International Energy Agency says about our renewable future.
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Mike Wirth, chairman and chief executive officer of Chevron, Chevron

 

The International Energy Agency on Tuesday released
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stunning report about what the world’s energy systems will look like
in just over six years. By 2030, it said, global demand for coal,
oil, and gas will have already peaked. Fossil fuels will account for
73 percent of the world’s energy mix—down from 80 percent today.
Three times as much investment will flow to wind and solar as goes to
new coal and gas-fired power plants. And half of new car
registrations in the United States will be electric vehicles.

That’s a relatively rosy scenario—and it would still leave the
world on track to warm by 2.4 degrees Celsius (4.3 degrees
Fahrenheit), well above the Paris Agreement goal of limiting warming
to “well below” two degrees Celsius. What’s more, the IEA notes
that investment in fossil fuels is on track to be double what would be
needed to make good on that commitment, “signaling a clear risk of
protracted fossil fuel use that would put the 1.5 degrees
Celsius goal out of reach.”

Fossil fuel executives seem hell-bent on sailing through that
threshold as they (literally) double down on oil and gas production.
Less than a month after ExxonMobil announced its intention to acquire
Permian Basin driller Pioneer Resources for $60 billion, Chevron this
week announced
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own all-stock acquisition of Hess for $53 billion—the largest such
deal in the company’s history.

Chevron CEO Mike Wirth has hit back at the IEA’s projection that oil
and gas demand will peak this decade. “I don’t think they’re
remotely right,” he told
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Times_. “You can build scenarios, but we live in the real world and
have to allocate capital to meet real world demands.” It’s hard to
imagine he takes any more seriously the agency’s assessment
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what’s required to limit warming to 1.5 degrees Celsius. To achieve
that goal, the IEA predicts that every new unit of energy delivered in
2050 will need to consume two-thirds less fossil fuels.

“Looking at the world today or tomorrow, no one can convince me that
oil and gas represent safe or secure energy choices for countries and
consumers worldwide,” IEA head Fatih Birol told
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Times_. Where drillers might have poured last year’s record profits
into diversifying their business—expanding low-carbon
ventures—they’ve just bet tens of billions of dollars on the IEA
being wrong about what will, and what should, happen.

Chevron and Exxon have plenty of cause for optimism, though. The U.S.
already accounts for 90 percent of new liquefied natural gas projects
approved anywhere on earth since the start of 2022. Domestic crude oil
production reached record levels
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is likely to do the same in 2024. If governments follow through on
today’s climate pledges, oil demand will decline by 50 percent by
midcentury. Limiting warming to 1.5 degrees Celsius, the IEA argues,
would see fossil fuel production decline 2 percent per year through
2030 worldwide, and 4 to 5 percent per year after that through 2050.

For oil companies’ recent investment decisions to pay off, that is,
even the most modest of climate goals will have to stay firmly out of
reach. Conversely, striving toward putting them within reach means
rendering many of their investments worthless. Policymakers don’t
seem poised to make it so.

The IEA didn’t create its projections and recommendations out of
thin air. Modelers make assumptions based on available data about
likely outcomes or work backward from goals like net-zero emissions.
Fossil fuel executives have a vested interest in making sure some
scenarios come true and others don’t. If the world goes down one
path, they
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lose trillions of dollars
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If it follows another, they can continue to make fabulous amounts of
money in a world that is two, three, or four degrees warmer. Those
same companies painting themselves as service providers—humbly
meeting the world’s energy demands—obscure just how much they do
to influence that demand and, consequently, our shared future:
bankrolling politicians who stop climate policy in its tracks;
lobbying to kill and weaken bills that might reduce emissions;
historically, backing efforts to undermine climate science and
diplomacy.

The recent spending binges on Pioneer and Hess, then, should be
thought of less as a sober, pragmatic assessment of where things stand
than as another attempt by oil companies to tip the scales in their
favor. And the IEA report is a rebuttal of sorts: a road map toward a
slightly less calamitous future.

_KATE ARONOFF is a staff writer at The New Republic. Her writing has
appeared in The Guardian, The Nation, Dissent, Jacobin, and the New
York Times. She lives in Brooklyn._

_THE NEW REPUBLIC was founded in 1914 to bring liberalism into the
modern era. The founders understood that the challenges facing a
nation transformed by the Industrial Revolution and mass immigration
required bold new thinking._

_Today’s New Republic is wrestling with the same fundamental
questions: how to build a more inclusive and democratic civil society,
and how to fight for a fairer political economy in an age of rampaging
inequality. We also face challenges that belong entirely to this age,
from the climate crisis to Republicans hell-bent on subverting
democratic governance._

* Fossil Fuel
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* Climate Change
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* big oil
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* Chevron
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* International Energy Agency
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