Our role in the energy transition
Climate change presents a significant global challenge
The impacts of climate change on our planet are significant and undeniable. We have already passed 1°C of warming from pre-industrial levels and, according to the Intergovernmental Panel on Climate Change, this will continue to beyond 1.5°C by 2030 unless we dramatically change course. The Paris Agreement has set a goal to limit the global temperature increase to 2°C, and ideally not more than 1.5°C. We all have a collective responsibility to reduce emissions and decarbonise in line with this target.
What role should oil and gas play in the energy transition?
The oil and gas industry must be a leader of change in the energy transition. How and where we source our energy plays an important role in a lower carbon energy future. Today, oil and gas contributes just over half the world’s global energy supply. It is also a necessary feedstock for almost every consumer product we use – from packaging to electric vehicles, pharmaceuticals to wind turbines.
However the world’s population and standards of living are rising and access to affordable energy will continue to underpin global economic growth. As a result, the global demand for energy is predicted to increase by around 20% by 2040. The energy transition must not only help us mitigate climate change impacts, but it must be inclusive and no one should be left behind.
In a <2°C future, the supply of renewable energy will need to more than double by 2040, with oil and gas having a lower overall contribution to the energy mix. The way oil will be used, and the emissions from its combustion, will also change. With the growth in electric, and potentially hydrogen fuelled vehicles, less oil will be needed for road transportation, and more will go into petrochemicals as a material feedstock for everyday consumer products. Industries that are difficult to electrify will continue to need hydrocarbons, and will have to install carbon capture technology in order to meet their net zero commitments.
So, how do we meet energy demand growth while reducing emissions?
Oil and gas is here to stay, at least for the foreseeable future, but 5-8% of global carbon emissions come from its production. This makes it critical for the oil industry to reduce its operational emissions to the lowest possible level. As a result, we believe that the leaders of our industry will be those who can provide oil responsibly, at a low cost, and with low emissions.
How does Lundin Energy fit into this lower carbon future?
At Lundin Energy, we recognise the significant challenge that both the world and our industry face. We aim to play a leading role in our industry through the energy transition, and have adopted a Decarbonisation Strategy underpinned by specific actions and clear milestones.
- We will reduce our carbon intensity to ~1 kg CO2/boe by 2023, which will be over 15 times lower than the industry average.
- We will halve our absolute emissions by 2023 from 2020 levels, which is at a much faster rate than the Paris Agreement targets require. This will be achieved through our investments in electrification and renewable energy projects.
- In 2023, we will reach carbon neutrality across our operations, by neutralising any residual emissions with the highest quality, natural carbon capture.
We believe our Decarbonisation Strategy is a blueprint for how upstream oil and gas companies can contribute to reducing emissions and mitigating climate change, whilst helping to meet growing energy demand and keeping the world moving. This approach underpins all of our strategic, operational, and financial decisions, and has contributed to our ability to operate efficiently and with industry-leading low costs. This makes us a resilient and sustainable business for the long term, helping to fuel the energy transition.