An open letter penned by the ‘We Mean Business Coalition’ this week calls upon the Heads of State attending COP28 to commit to phasing out fossil fuels entirely from the global energy system. However, the letter ignores the dangerous implications that a total phase-out of fossil fuels would have on international energy security and local communities.  

Signed by over 130 major corporations, the letter neglects to consider the consequences of a total slow-down of fossil fuels. For example, petrochemicals, made possible by oil and natural gas, are the building blocks of the world around us. Petroleum products are part of the fabric of our societies: clothing, tires, digital devices, packaging, detergents, and countless other everyday items are made from petroleum products. Without the oil and gas industry, many of the products sold by the signed corporations would simply cease to exist – such as Ikea’s furniture, eBay’s packaging, Unilever’s product lines, or Volvo’s cars, not to mention how each of these companies transports their products around the world.  

The letter also instructs world leaders to triple existing global renewable electricity capacity to at least 11,000 GW. As previously explained by EID, petroleum products are vital for the production of wind turbines and solar panels, two of the most readily-deployable technologies for renewable energy generation.  

Further, halting fossil fuel production will put global energy security in jeopardy. The intermittency of technologies such as wind and solar mean that when the wind isn’t blowing or the sun isn’t shining, we still need baseload power – like fossil fuels – to rely on.  

The letter also calls for leaders to “support countries in the Global South in diversifying their energy systems.” As previously explained by EID, policies aimed at disincentivizing oil and gas, such as the UK windfall tax, serve only to hurt energy security and local communities. This is particularly true for the Global South, where fossil fuels are crucial to propping up underinvested grid infrastructures and act as a lifeline for off-grid communities. The International Energy Agency estimates that over 700 million people do not have access to electricity. Many of these people rely on fossil-based fuels, such as liquid petroleum gas, for heating and cooking. 

As James Rockall, the CEO of the World Liquid Petroleum Gas Association, explains: 

“These off-grid communities are among those most at risk of being left behind by the energy transition. While some areas are already benefitting from renewable energy sources, it remains a distant solution for many. Solar and wind installations require a robust and modern power grid, can be costly to transport and install, and struggle to deliver consistent energy. Operational and maintenance costs can vary significantly, and energy storage continues to pose a tricky problem. These factors all point to a continued demand for liquid gas.”(emphasis added) 

Similarly, a Center for Strategic and International Studies analysis of United Nations data found that “advanced economies, or the Global North, cannot try to impose strict climate actions on the developing world that could negatively impact economic growth.”  

This points to a continued need for fossil fuels, as underscored by Joe Lassiter, professor of management practice in environmental management at Harvard Business School: 

“I will be very, very surprised if oil usage peaks in the foreseeable future, meaning a few decades from now. There’s no reason to believe that the global South won’t take any barrel that’s produced anywhere in the world.”  

Bottom line: The role the oil and gas sector will play in the energy transition must be acknowledged if COP28 is to be effective. Consultation with all parties – especially the industry responsible for supplying the world with critical energy resources – and an inclusive dialogue is essential to achieving a truly just and secure energy transition.  

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