Coastwide
Kokhanchikov / Shutterstock

US - Study: Peak oil moves closer as energy majors shift to renewables

The world’s largest oil and gas companies increased investment in clean energy by 34% in 2020, despite a 6% fall in global energy demand caused by the coronavirus pandemic, according to new research published on Tuesday (8 June).

The world’s largest oil and gas companies increased investment in clean energy by 34% in 2020, despite a 6% fall in global energy demand caused by the coronavirus pandemic, according to new research published on Tuesday (8 June).

Investment in renewables was the least affected by spending cuts and emerged as the most resilient during the COVID-19 crisis, with oil and gas majors investing $8.8 billion (€7.2 billion) in 2020, compared with $6.6 billion the year before.

If the same pace of investment is maintained, peak oil will happen “around 2030,” according to CMS research, a global law firm which commissioned the analysis.

The research, carried out by Capital Economics, assessed the investment strategies of 15 top oil and gas majors, including BP, Shell, Total, Eni, Repsol, Equinor, Exxon, Chevron, CNPC, Petrobras and Saudi Aramco.

It showed that investment in the energy transition accounted for 3.6% of the majors’ capital expenditure in 2020, up from 2.9% in 2019. According to the analysis, those investments proved 10 times more resilient to spending cuts than oil and gas.

“The pandemic may prove to be an action accelerator necessary to meet the Paris [Agreement] aspirations,” said Bob Henderson, general counsel at Shell who is cited in the report.

The largest single investor in renewables in absolute terms was Royal Dutch Shell with $2 billion, followed by Total ($1.7 billion) and Eni ($1.6 billion). If existing policies are maintained, renewable energy investments will increase from an annual $8.8 billion currently to reach $10 billion by 2030, CMS said.


Read more.