Both True — What to Watch: IEA’s Startling Roadmap

Plenty of oil and gas realists have critiqued the International Energy Agency’s (IEA) roadmap to net zero by 2050. Instead, I want to look at the opening it creates for game-changing oil and gas leadership.

The flurry of hostile-to-oil-and-gas news the last 10 days has been staggering. In the next few weeks, I’ll devote my Both True editions to give you, the game-changing leader, a lens on what it all means for you.  

Taken at face value, the developments are disheartening at best and dangerous to life as we know it at worst. But as you already know, here at Adamantine we do not see things at face value.

Yes, the recent headlines threaten old-guard, they-need-us-more-than-we-need-them companies. But to game-changing leaders, the same headlines represent a neon road sign: Time to up-level your energy leadership.

In today’s “What to Watch,” we’ll look at how IEA’s roadmap got summarized as a “no more new oil and gas projects” proclamation in the press — and what we think is really going on. In upcoming “What to Watch”editions, we will break down Exxon’s new Board, Shell’s loss in the Dutch courts, the fast-paced developments in differentiated natural gas, and the unfolding events around climate-financial disclosures. We (and you) are going to be busy.

Both of these things are true:

  • The onslaught of anti-oil-and-gas developments is confusing and discouraging.
  • Game-changing oil and gas leaders see a through-line in these developments, a pattern that calls them to energy leadership.

The situation

I read IEA’s report a bit differently than the New York Times and Bloomberg did, with their apocalyptic titles and declarations of “no new oil or gas fields”:

  • First, the report clearly calls out a deficit between the many aspirational declarations for net zero by 2050 and the technology, will, collaboration, and investments required to get there.
  • Next, the IEA identifies more than 400 milestones on their path to this 2050 goal. So it doesn’t take too much common sense to understand that there is a difference between a roadmap to 2050 and the world we live in.
  • Most importantly to me, the IEA declares early in their web summary, “As the major source of global emissions, the energy sector holds the key to responding to the world’s climate challenge.” Indeed.

I don’t believe that the world requires no new oil and gas development — and I don’t think the IEA does either. But it does make sense for organizations to map what meeting that aspiration requires, so that we can engage in the innovation and policy required to map aspiration to current reality.

Even though IEA does declare, “There is no need for new fossil development in our net-zero pathway,” they also explain, “Achieving net-zero emissions by 2050 will require nothing short of the complete transformation of the global energy system.” And: “Our Roadmap to Net-Zero Emissions by 2050 lays out an extremely ambitious transformation of the global energy system.” And: “Making net-zero emissions a reality hinges on a singular, unwavering focus from all governments — working together with one another, and with business, investors, and citizens.”

So, yeah, in this idyllic global situation, we won’t need any new oil and gas development. Fine.

I’m interested in the opportunity this report creates for discussion about reality, costs, tradeoffs, supply chains, and raising billions of people out of energy poverty. When you map out the path to net zero, it looks difficult. This difficulty builds fodder for conversation.

For instance: Among its key focus areas for the energy transformation, IEA includes many technological pathways that are in what we at Adamantine would call the oil and gas “decarbonization toolbox.” These are ideas that game-changing oil and gas leaders are exploring, investing in, and building energy leadership strategy around. CCUS, hydrogen, and biofuels feature prominently in IEA’s technology emphasis.

Seize the day

Don’t let anti-oil-and-gas headlines get you down. Game-changing leaders will seize this moment to

  • Take a little bit of time to unpeel the “headline” onion one layer to see what is really going on;
  • Ask yourself: “What opportunity does this create for oil and gas industry leadership?”;
  • Set up regular time with your (diverse!) leadership and rising leaders to ask: “How does this create an opening for conversations with our key stakeholders?”; and
  • Translate these disruptions into strategic planning for your company’s decarbonization toolbox.

If indeed “the energy sector holds the key to responding to the world’s climate challenge” — and I believe it does, and we do — then let’s take that key into the engine room and start leading the world to the energy future. Don’t know where to start? Schedule a strategy session to unpack the leadership opportunities with your team.

Wishing you a role in the driver’s seat today,

Tisha

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