Beyond projects already committed in 2021, there are no new oil and gas fields approved for development in Australia, according to the IEA’s Net Zero by 2050 report.
Outlined in EnergyQuest’s June monthly report, this is already playing out in New Zealand, which in 2018 decided not to award any new frontier exploration permits.
“They thought companies would continue to explore in the existing permits, which might ultimately be converted to production permits. However, industry confidence is a fragile thing, especially in frontier exploration and rather having to bear increased political risk in addition to geological risk, exploration companies have left New Zealand, with the result that the country is having to consider LNG imports, probably resulting in higher, not lower, emissions,” EnergyQuest reported.
EnergyQuest believes that the IEA is effectively saying that if governments want to reach New Zealand by 2050, the world would need to go cold turkey on oil and gas exploration before being certain that alternatives are in place.
“Before a country decides to abandon exploration, burning its bridges, it should be 100 per cent sure that it has all necessary energy security arrangements in place,” EnergyQuest advised.
However, EnergyQuest believe ongoing exploration and development is important for maintaining output from existing projects, such as Queensland LNG projects and thereby fulfilling export contracts.
Not only will stopping development create energy security challenges. The IEA notes that new energy security challenges will emerge on the way to net zero by 2050 while longstanding ones will remain, even as the role of oil and gas diminishes.
As no new oil and natural gas fields are needed in the net zero pathway, supplies would become increasingly concentrated in a small number of low-cost producers.
In addition, the IEA has stated that the net zero pathway would require the immediate and massive deployment of all available clean and efficient energy technologies, combined with a major global push to accelerate innovation.
The pathway calls for annual additions of solar PV to reach 630 GW by 2030, and those of wind power to reach 390 GW.