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DIRECTORY OF SINGAPORE PROCESS & CHEMICALS INDUSTRIES 2021/2022
around the world to enable large-scale emission reductions. It will also leverage ExxonMobil’s significant experience in hydrogen production and add other technology focus areas, such as advanced biofuels, as they mature to commercialisation,” said Mr Woods.
The IEA estimates that the oil and gas industry as a whole will increase climate- friendly investments to at least 4% of its capital spending in 2021, up from just 1% in 2020.
“Much greater resources have to be mobilised and directed to clean energy technologies to put the world on track to reach net-zero emissions by 2002,” said Faith Birol, IEA’s executive director. “The rebound in energy investment is a welcome sign, and I’m encouraged to see more of it flowing toward renewables.”
Given the gravity of climate change efforts by big oil are seen as being grossly insufficient in some quarters, on May 26, 2021, ExxonMobil, Chevron and Shell felt the heat from shareholders and lawmakers.
ExxonMobil was forced to make changes to its board after activist fund Engine No. 1, which was critical of the company’s approach to the environment, managed to marshal the support of big shareholders to secure three seats on the company’s board. At Chevron, shareholders
backed a call from the Dutch environmental group Follow This to reduce its carbon emissions.
As for Shell, Netherlands’ largest company, the country’s court ordered it to lower its carbon emissions by 45% by 2030 from 2019 levels, much faster than the company’s timeline. Shell’s target was to cut the carbon intensity of its products by at least by 20% by 2030, 45% by 2035 and 100% by 2050 from 2016 levels.
As the ruling took immediate effect, Shell’s CEO Ben van Beurden said the company would take “bold but measured steps” to accelerate its energy transition strategy and deepen carbon emissions cuts while taking steps to appeal against the decision. Analysts expect this will lead to a sharp reduction in Shell’s energy output.
But given the sheer size of the industry, the shift away from oil and gas is not expected to be immediate. “Directionally, it is clear that the world is going towards lower carbon, but I think the scale of it is not fully understood. In 2019, we had a US$87 to US$88 trillion world economy that depended upon fossil fuels for 80% of its energy. You don’t just change that overnight,” said Daniel Yergin, vice chairman of IHS Markit.
“So, I think there is a transition, it just takes time. I think oil and gas are going to end up
being an important part of it for a long time,” he added.
Global oil demand has doubled over the past 50 years, reaching around 100 million barrels per day in 2019, equivalent to an annual energy consumption of 192 exajoules (EJ).
National oil companies (NOCs) such as Saudi Aramco, Abu Dhabi National Oil and Qatar Petroleum, which are owned primarily by governments and are not subjected to shareholders’ pressure, will probably emerge as buyers of the oil and gas assets divested by big oil. Rystad Energy expects that by 2050 NOC’s share of worldwide oil supply will increase to 65% from just over half today.
Singapore signs up
to global effort
Pint-sized Singapore has joined the global effort in reducing emissions. As Mr Teo Chee Hean, who chairs the Inter-Ministerial Committee on Climate Change, noted, “Our impact on global emissions is small, but on the other hand, the effect of climate change on us is disproportionately large and existential”, pointing to the impact of sea level rise on low- lying Singapore.
By 2050, Singapore wants to halve the level of emissions it produces from its 2030 peak, with the aim of achieving net-zero emissions “as soon as viable in the second half of the century”.
It’s a challenging target for Singapore given its sizeable chemical cluster. The country has one of the world’s biggest refining and petrochemical complexes, the biggest bunkering hub, and is also Asia’s largest hub for oil trading. It has been suggested that for Singapore to achieve its target, it would have to transition away from chemicals as it is a major carbon emitter contributing some three-quarters of industries’ emissions.
That may be a step too far given Singapore’s abiding interest in the industry which goes back over 1891 when M. Samuel & Co (later Shell)
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