New oil and gas fields expected to grow fourfold despite IEA warnings
Three years after the International Energy Agency claimed that no new oil and gas projects are needed to keep global warming in check, companies are continuing to drill.
At least 20 new oil and gas fields worldwide received permission to start development last year, totaling 8 billion barrels of oil equivalent in reserves, according to a tracker released today by the Global Energy Monitor, an environmental research group.
GEM expects this figure to grow nearly fourfold by the end of the decade, with another 31 billion barrels of oil equivalent I’m 64 new fields permitted by 2030.
The new oil and gas fields come despite warnings from the IEA that there was no room for new projects with long timelines for development in the path to net zero. The energy watchdog also expects demand for fossil fuels will peak by the end of the decade.
GEM’s findings arrive as oil and gas executives push back against forecasts of a speedy transition to renewable energy and express confidence that demand for hydrocarbons will continue to grow into at least the 2030s.
The US leads the world in approvals of new oil and gas reserves in the past two years, with ConocoPhillips’ Willow project in Alaska marking the largest approved project in the country, according to GEM. The country’s leadership in new oil and gas approvals comes as President Joe Biden faces pressure from environmentalists to take a harder stance on climate while the oil and gas industry accuses the administration of overly restrictive policies.
“Oil and natural gas are projected to remain essential parts of the energy supply mix in coming decades across a broad range of transition scenarios. The Willow project provides exactly the type of environmentally and socially responsible production that is needed through the energy transition,” said a spokesperson for ConocoPhillips, adding that the project also boosted revenue for Alaska Native communities and job creation.
Outside of the US, Guyana and the United Arab Emirates lead in new project approvals. Among the largest approved projects include Abu Dhabi National Oil Company’s Hail and Ghasha gas field and ExxonMobil’s Yellowtail offshore development in Guyana.
Liam Mallon, head of upstream at Exxon, told Energy Source the upstream business is about “constant renewal” because oil and gas fields mature and resources deplete over time. But Exxon is pursuing the “holy grail” of expanding production beyond its current levels of almost 4 million barrels of oil equivalent per day while transitioning to a lower-emissions future, he added.
“We firmly believe that we need to continue to grow our oil and gas footprint . . . we believe we can do that and significantly reduce our emissions,” said Mallon.
Companies also remain steadfast in terms of exploration. GEM tracked 50 new project discoveries between 2022-2023, totaling about 20 billion barrels of oil equivalent . Four countries that make up more than a third of discoveries — Cyprus, Guyana, Namibia, and Zimbabwe — have had little to no history of production until recently and represent the next frontier of the oil and gas industry.
Oil majors and state-owned companies are behind the majority of new discoveries and approvals. Among the largest projects discovered in the past couple of years are Iran’s Shahini Gas field and Total Energies’ Venus oilfield in Namibia.
A spokesperson for TotalEnergies said that the company believes demand for oil could start to decline around 2030 but that it will occur at a slower rate than the natural decline rate for existing fields.
“New oil projects are still needed to meet this demand and to keep prices at an acceptable level in order to create the conditions for a just transition that allows people time to adapt their energy use,” said the spokesperson, adding the major followed “strict requirements” concerning safety, emissions, and environmental impact in its operations. The timeline from discovery to production averages 11 years worldwide, the new discoveries won’t come online until the 2030s.