Banks bolster support for oil and gas [Global Gas Perspectives]
Banks bolster support for oil and gas
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Natural Gas News
Banks bolster support for oil and gas [Global Gas Perspectives]
Summary
Oil and gas companies, such as Shell and BP, and now banks, have been backtracking on energy transition commitments and are increasing their oil and gas investments. by: Charles Ellinas
Barclays has become the latest major international lender to backtrack on oil and gas. Its CEO CS Venkatakrishnan told Bloomberg on June 25 that banks could not go “cold turkey” on the oil and gas industry without creating energy security risks. He said that calls for banks to abandon oil and gas are unrealistic. The end goal – net zero by 2050 – is not in question. What is in question is how quickly investment in oil and gas should be scaled back. That’s remarkably frank coming from a bank that only in February announced that it would cease funding new “upstream oil and gas expansion projects,” after bowing to pressure from climate change activists. Venkatakrishnan said: “We are very much moving away from coal to oil, oil to gas, gas to clean energy and the reality is that for quite some time fossil fuels will be with us, especially natural gas;” they are still required for many essential activities. The transition path is long and “the world economy cannot go cold turkey on this tomorrow.” Transition needs to be orderly. Global energy demand needs to be met while renewable energy is scaled. Barclays is not the only lender to do so. Other ma...
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”