Mind the Gap
This report looks at the oil, gas and thermal coal industry with a focus on the upstream end of the value chain, comparing potential supply to a selection of different demand scenarios that result in varying global warming outcomes.
The three scenarios used are drawn from those published annually by the International Energy Agency. These are the Beyond 2 Degrees Scenario (B2DS, aligned with a 1.75°C global warming outcome); the Sustainable Development Scenario (SDS, aligned with 2°C); and the New Policies Scenario (NPS, aligned with 2.7°C). The reports finds that:
- A 1.75 °C scenario requires $0.7tr less capex than 2°C.
- Capital investments in fossil fuels remains very significant over 2018 - 2025 ($3.3 tr in B2DS, $4.0tr in SDS) including new oil & gas ($1.6tr in B2DS, $2.1tr in SDS) but not all. Approximately 25% of NPS capex on new projects does not fit in SDS and 40% i nB2DS.
- No new thermal coal mines go ahead in the US or China in either the SDS or B2DS.
- No investment in new greenfield oil sands projects is required before 2025 in the B2DS or the SDS.