Originally published on Forbes.com on December 13, 2023

COP28 may go down in history as the first of COP meetings to address an energy transition that includes all fossil fuels – especially one that was headed by the CEO of a large oil and gas company.

Greenhouse gas (GHG) emissions are in all the news, especially the news from COP28 in Dubai in the country of UAE. About 40% of global CO2 comes from the oil and gas industry, compared with about 15% of global methane. This puts the oil and gas industry in the cross-hairs.

Significant agreements came out of COP28 and we offer an overview of these here:

The really big agreement was getting 200 countries in Dubai to agree on cutting CO2 emissions from future oil and gas.

A central issue was whether to “phase down” or “phase out” fossil production and consumption by 2050. The president of COP28, Sultan Al Jaber from UAE, had to broker the interests of the giant oil producers in the Middle East against those of the EU and U.S. who wanted to seriously reduce the use of fossil fuels. In the end, the agreement was to transition the world away from fossil fuels – meaning all fossil fuels – which was a first in a UN-sponsored COP meeting.

OPEC had urged their members to oppose any wording that reduces oil and gas production, instead of oil and gas emissions.

The final wording was “For countries to quickly shift energy systems away from fossil fuels in a just and orderly fashion… Countries also are called to contribute to a global transition effort — rather than being outright compelled to make that shift on their own.”

Other comments on the agreement are insightful. According to Bloomberg, Germany’s climate envoy was positive about the result, saying that investors will now understand that renewable energy will be the focus of future markets, not fossil fuels.

The head negotiator for Samoa, an island state, said that shifting away from fossil fuels needs to have a wider basis in the whole economy, not just energy systems. Other concerns she had about the text were that carbon capture and storage might be a license for some operators to continue producing oil and gas. Also, natural gas, while cleaner-burning, might be construed as an acceptable replacement for coal and oil for long-term usage.

Fifty oil companies pledged to end routine flaring from active oil or gas wells and achieve net-zero methane emissions by 2030.

Methane is the second worst greenhouse gas (GHG) after carbon dioxide, CO2. But methane cleanup can be a quick hit. It’s a big deal because methane causes 80 times the global warming than CO2 does even though the gas only stays in the atmosphere for 10 years (compared with thousands of years for CO2). So cleaning up a certain volume of methane can have more effect on reaching the Paris goal of 1.5 C degrees above pre-industrial times – compared with cleaning up the same volume of CO2. This is where the methane clean-up term “low-hanging fruit” comes from.

These fifty companies amount to half of global production. Flaring is the burning of excess methane, while venting is the release of the gas without burning it. If the pledge succeeds, it will avoid a rise of 0.1 C degrees, equivalent to about 5 years of temperature rise under present conditions.

But, let’s look at a wider perspective on this. The UN highlighted worldwide methane emissions in a comprehensive report. Worldwide, 60% of methane emissions come from man-made sources. Fossil fuels contribute a third of this (20%) and oil and gas make up two-thirds of that. So oil and gas make up only 13% of all global methane emissions, but its warming effect on the atmosphere is disproportionately higher.

The U.S. announced in Dubai its new rule for methane emissions from the oil and gas industry.

The U.S. Environmental Protection Agency (EPA) will (1) ban routine flaring in all new wells after a 2-year phase-in, (2) mandate that methane leaks from wellheads, storage tanks, processing facilities, and compressor stations be monitored properly, reported, and repaired, (3) monitor zero-emissions standards for new process controllers and pumps outside of Alaska, with one-year phase-in, (4) identify and publishing super-emitters. Collectively, these are the strongest methane regulations in the world.

100 countries, out of 200 member countries, pledged to triple the world’s renewable energies installed by 2030 and to double the rate of efficiency gains by the end of the decade.

These renewables are mainly wind, solar, and grid-scale batteries. Australia and some of its states are steaming ahead in this sector and, along with Denmark, lead the world.

South Australia offers some startling stats. When averaged over the last 12 months, 70% of the state’s electricity comes from renewable sources. According to ElectraNet, the state could reach 100% renewables earlier than the self-imposed target of 2030.

• South Australia has four grid-scale batteries in a population of only 1.8 million.
• 40% of homes in South Australia have rooftop solar, and 30,000 residences have home batteries installed.
• South Australia has shown the world what can be done. It has lifted its energy systems from 1% to over 70% renewable energy in just over 16 years.
• On 180 separate days in 2021, renewables met 100% of electricity demand.

AGL, a company that provides energy and electricity, is a story of proactive energy transition that may resonate with utility companies in the U.S. AGL expects that electrification of households, especially EVs, will result in a massive shift to wind and solar. AGL also anticipates that big batteries will make higher financial returns on their investment than solar or wind farms.

A radical plan is to build a “community” virtual power plant that would create a network of 50,000 rooftop solar and Tesla Powerwall home battery systems across South Australia.

If this foretells the future of U.S. energy, and the potential displacement of fossil fuels by renewables, the oil and gas industry would be wise to look at this with eyes wide open.

Six of the world’s biggest dairy companies will start reporting their methane emissions by mid-2024 and will write action plans to clean up their emissions by end of 2024.

Livestock causes 30% of all methane emissions, mostly from burps and farts and manure.

COP28 may go down in history as the first of COP meetings to address an energy transition that includes all fossil fuels – especially one that was headed by the CEO of a large oil and gas company.