On average, the scenarios project that by 2040, wind and solar use will grow by more than 10
fold, and use of coal will significantly decrease.
Importantly, they project an essential role for oil and natural gas, as do most other
third-party scenarios that meet the objectives of the Paris Agreement.
To understand this, lets look at what is driving the
continuing need for oil and gas on the next chart.
Underpinning the future demand for oil and gas is economic growth driven by an
increasing population and growing prosperity. The continuing demand for oil and gas is concentrated in 3 sectors: Power Generation, Industrial and Commercial transportation.
More people with higher standards of living drive the demand for electricity.
Growing economies lead to more industrial activity, and that requires oil and gas for fuel and feedstock while also increasing the demand for
commercial transportation.
In the future, the IPCC projects that these 3 sectors will account for about 80% of demand, a similar level to
today.
The lack of alternatives to meet the full range of needs in these 3 important sectors lead to their continued use. As a result, for
society to meet its ambitions for a lower carbon energy future, emissions in these hard-to-decarbonize sectors need to be addressed.
The next few charts take a closer look at the challenges in each sector and how they can be addressed.
To further reduce emissions innovations are required. The International Energy Agency, or IEA, reports that, unfortunately, only 6 of the 46
technologies and sectors to accomplish this are on track today.
In power generation, society needs
on-demand electricity around the clock.
Today, natural gas represents a lower carbon alternative
to coal. Wind and solar provide an even greater emission reduction, which is driving their growth.
However, both wind and solar are
challenged by intermittency, and, in many places, poor resource quality. In other words, insufficient hours of sun or wind.
Batteries can
help, but a break-through in their energy-density is needed for cost-effective longer-term storage. Gas fired power generation is an option, where the emissions can be captured and stored, and hydrogen can be used if the cost of production can be
lowered.
All of these potential solutions require technology advances. Our focus is actively working these issues, which Ill come to
later.
In commercial transportation, large trucks, ships and airplanes require significant power and energy dense fuels to achieve the
needed range.
Todays batteries lack sufficient energy density for these heavy duty applications, and the batteries end up too
costly, too heavy and take too long to recharge, making them impractical and uneconomic.
Similar to wind and solar, a breakthrough in
battery technology and hydrogen will be needed to reduce emissions in heavy duty transport.