International Energy Agency calls last drinks on fossil fuels

In its newest report the International Energy Agency, a body specifically created to ensure the world’s supply of fossil fuels remained copious and cheap, has in effect called last drinks on fossil fuels.

Should the world meet the Paris target of keeping warming as close to 1.5 degrees as possible, renewable energy uptake would continue to surge so quickly that vast swathes of Australia’s energy infrastructure would be rendered obsolete in the immediate future.

The International Energy Agency has, in effect, called last drinks on fossil fuels. Credit: AP

Under this scenario, comprehensively modelled and outlined in detail by the world’s leading energy authority, no new mines are needed and no new coal plants would be built from the end of the year. Gas and oil would follow.

“No new natural gas fields are needed in the [net zero by 2050 scenario] beyond those already under development. Also not needed are many of the liquefied natural gas liquefaction facilities currently under construction or at the planning stage,” said the report, commissioned by Boris Johnson’s conservative UK government as it prepares to host United Nations climate talks in Glasgow in November.

“Between 2020 and 2050, natural gas traded as LNG falls by 60 per cent and trade by pipeline falls by 65 per cent. During the 2030s, global natural gas demand declines by more than 5 per cent per year on average, meaning that some fields may be closed prematurely or shut-in temporarily.”

The IEA boasts that the report, titled Net Zero by 2050, is the world’s first comprehensive study of how to “transition to a net zero energy system by 2050 while ensuring stable and affordable energy supplies, providing universal energy access, and enabling robust economic growth.”

The task is possible, in the IEA’s view, should the world’s governments embrace an abrupt and unprecedented transformation in how energy is produced, transported and used.

There is good news for Australia too. Australia is recognised as a potential exporter of hydrogen made from solar and wind power as fossils rapidly decline. The report sees a key role for the sort of carbon capture and storage championed by the government in its technology roadmap.

But at its heart, said energy finance analyst Bruce Robertson, it is a document that shows that the Morrison government’s “gas-fired recovery” is out of step with the rapid change in the global outlook on energy.

He believes that it is further evidence that the world will not tolerate the sort of energy and climate policies currently pursued by Australia and that gas infrastructure built today - much of it planned with Australian taxpayer support - will be tomorrow’s stranded asset.

“We are thumbing our noses at trading partners [who are committed to decarbonising] including the US, the EU, Japan and Korea, while our relationship with China remains pretty difficult,” said Robertson, who works with the pro-renewables Institute for Energy Economics for Financial Analysis.

“We are a trading nation and if we don’t bend with the wind, we are going to get broken. The winds are changing fast.”

Robertson’s concern echoes comments by Nigel Topping, who was appointed by British Prime Minister Boris Johnson to the United Nations role of High Level Climate Action Champion for at the upcoming Glasgow talks, made during a briefing for Australian journalists last week.

He said he senses frustration in Australian business circles that the government is not planning to either pursue the bounty or brace for the impacts of a rapid energy transition that has already begun, as other nations keep bringing forward their dates for either net zero or phasing out fossil fuels.

“This transition is going exponential fast. Every single date that people thought was aggressive or ambitious two years ago is now [viewed as] conservative,” said Topping.

“And so those who are not embracing the transition are really at risk of losing out in the race, and of wasting capital, and an Australian human assets as well.”

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