tracking the transition of the energy sector · 2015 2020 2025 2030 2035 2040 d scenarios for...

Tracking the Transition of the Energy Sector

With Summary Views on Portfolio Divestment of Oil & Gas

Discussion Slides for the University of Victoria

November 2019Confidential

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2 | ARC Energy Research Institute

Tracking the Transition1

0

50

100

150

200

Coal Oil Natural Gas Nuclear Hydro Renewables

Ex

ajo

ule

s

World Energy Demand by Primary SourceAnnual; 2000 to 2018

4 | ARC Energy Research InstituteSource: BP Statistical Review

Oil Gas

Growth in Renewable Energy is Exponential

Source: BP Statistical Review 5 | ARC Energy Research Institute

0

5

10

15

20

25

2000 2005 2010 2015

Ex

ajo

ule

s

World Renewables

Consumption

World Energy Demand By Primary SourceAnnual; 1970 to 2018


Renewables

Natural Gas

Nuclear

Coal

Oil

Hydro

Source: BP Statistical Review

0

100

200

300

400

500

600

1970 1980 1990 2000 2010

Ex

ajo

ule

s…but this

fraction is still

very small.

0%

10%

20%

30%

40%

50%

60%

70%

2000 2005 2010 2015

Ma

rke

t S

ha

re

Market Share of Renewables, Oil and GasAs a percentage of the total of all primary energy sources


Oil + Natural Gas

57%

Renewables

4%

Global GHG Emissions GrowthAnnual; 2000 to 2018


China

CanadaUSA

India

Europe

Rest of

World

0

5

10

15

20

25

30

35

2000 2005 2010 2015

To

nn

es

of

CO

2 (

Bln

s)

Financial

CrisisRise of

China

Economic

recovery

Cheap

energy era

Strictly Confidential

Big Picture GHG Emissions From Oil

Source: International Energy Agency 68 | ARC Energy Research Institute

Extraction Combustion

2017

2040 IEA Sustainable

Scenario

Coal Other

Source: International Energy Agency 9 | ARC Energy Research Institute

Gas power

generationCombustion

2017

2040IEA Sustainable

Scenario

Coal Other

Source: IEA Sustainable Development Scenario (World Energy Outlook 2018)

Sources of Global GHG Emissions, 2017 and 2040Oil & gas

extraction

This is how much emissions

must shrink by 2040

World Investment in Renewable EnergyAnnual; 2000 to 2018

Source: IEA

0

1

2

3

4

5

0

100

200

300

400

500

2000 2005 2010 2015

$U

S (

Tri

llio

ns)

$U

S (

Billio

ns)


Cumulative Investment in Renewable EnergyAnnual Global Captial Expenditures; 2000 to 2018

Source: International Energy Agency (2018)

0

1

2

3

4

5

0

100

200

300

400

500

2000 2005 2010 2015

$U

S (

Tri

llio

ns)

$U

S (

Billio

ns)

Cumulative

CAPEX


0

200

400

600

800

1970 1990 2010 2030

Ex

ajo

ule

s

Coal

Oil

Natural Gas

NuclearHydroRenewables

Typical Paris Agreement Transition ScenarioAnnual; 1970 to 2040

Source: BP Statistical Review (1970-2017), IEA (2018 to 2040) 12 | ARC Energy Research Institute

0

200

400

600

800

1970 1990 2010 2030

Ex

ajo

ule

s

Coal

Oil

Natural Gas

NuclearHydroRenewables

Typical Paris Agreement Transition ScenarioAnnual; 1970 to 2040

Source: BP Statistical Review (1970-2017), IEA (2018 to 2040)

$4.1 Trillion Spent(2000 to 2018)


0

200

400

600

800

1970 1990 2010 2030

Ex

ajo

ule

sTypical Paris Agreement Transition ScenarioAnnual; 1970 to 2040


$4.1 Trillion Spent(2000 to 2018)

Coal

Oil

Natural Gas

Nuclear

Hydro

Renewables +

Efficiency


Who Will Supply the Future? Who Should?Annual; 1970 to 2040


Who will

supply this?Oil

Natural Gas


Growth as UsualDemand Plateau

Disruptive Decline

Net Zero

0

20

40

60

80

100

120

2015 2020 2025 2030 2035 2040

MM

B/d

Scenarios for Future Oil Demand2015 - 2040

Source: IEA Current Policies (2016), Statoil Rivalry (2016), EIA Reference Case (2016), Exxon Mobil

(2017), OPEC Reference Case (2016), BP Base Case (2017),Statoil Reform (2016), IEA 450 (2016),

Statoil Renewal (2016), Greenpeace Energy [R]evolution (2015) 16 | ARC Energy Research Institute

Oil Production by Volume and Perceived CorruptionCorruption (Colour) and Size of Oil Production (Black Spots)


Russia

Mexico

Saudi Arabia

Iran

Nigeria

UAE

Iraq

Angola

Kazakhstan

Kuwait

Venezuela

Algeria

Source: Corruption map from Transparency International (2016); Oil volumes by BP Statistical Review 2018

Brazil

Qatar

Colombia

Argentina

Canada

Norway

USA

UK

Australia

Progressive Oil & Gas is Responding to Climate Change


“The oil and gas

industry is reducing

its emissions fast”

“Who cares? You

will be irrelevant in

10 years”

People are Buying Bigger and Bigger GuzzlersTwo-Axle, four-tire trucks, pickups, SUVs, vans less than 8,500 lbs

Source: US Bureau of Economic Analysis (BEA) 20 | ARC Energy Research Institute

30%

40%

50%

60%

70%

80%

2001 2004 2007 2010 2013 2016 2019

% o

f N

ew

Ve

hic

le S

ale

s

US Light Trucks

Estimated Well-to-Combustion EmissionsUS Refined Average Crude Oil (2014)

Source: ARC Energy Research Institute, using input data from US Department of Energy

National Energy Technology Laboratory 22 | ARC Energy Research Institute

Is it really a binary choice?(the goal is to reduce emissions ASAP)

0

50

100

150

200

Kg

CO

2e/B

arr

el

Not All Oil Production Emissions are the Same!GHG Intensities of Various Oil Production Sources Around the World

• US Average represents the weighted average production emissions of all crude oils that were consumed in US refineries in

2014; All plays assume wide Boundary Oil Production GHG Emissions Intensity; KgCO2e/B

Source: ARC Report: “Crude Oil Investing in a Carbon Constrained World (2017 Update)”24 | ARC Energy Research Institute

US

Average*A wide 8:1

‘dynamic range’ in

GHG intensity

Best

Worst

The Growing ESG Movement is ImportantESG reporting will identify progressive companies across all energy systems


UN PRI Signatories (2006 – 2018)

tracking the transition of the energy sector · 2015 2020 2025 2030 2035 2040 d scenarios for...

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