Climate change, the energy transition and oil and gas strategies

Climate change is society’s biggest challenge – and mitigating climate change is impossible without a profound energy transition. This simple fact keeps getting lost in the extraordinary geopolitical times in which find ourselves, where nationalism, populism and short-termism continue to trump the ‘tragedy of the horizon’.

Climate change continues to impact life on land and in the oceans, with record land and sea temperatures being recorded year-on-year, and the rate of temperature increase at least 65 times faster than anything we have seen in the fossil record.

However, we are seeing some signs of progress on emissions and investment in the energy transition. The picture for global emissions, in absolute terms, is not pretty. CO2e emissions are at an all-time high of c. 55GT, with fossil fuels comprising 70% of all emissions and stubbornly representing 80% of energy generation. But – in the last two years the rate of growth of emissions started to slow to 1.1% and 0.8% respectively as renewable power generation grew, and in advanced economies, emissions are now back at 1973 levels.

Investment levels in the energy transition are also increasing, despite political rhetoric. 2024 investment was c. $2.1 Trillion, up from $1.7 Trillion the previous year and a significant increase over only hundreds of billions a few years ago. This is progress but just half the $3.5 Trillion needed annually. Some may see this as a ‘cost’, others see this as an incredible investment opportunity – arguably the world’s largest ever purchase order.

Much of this investment is directly through governments or indirectly through government incentives – although the need for these have fallen as renewable power in particular now is the cheapest form of electricity. Private sector investment is also growing, although we have seen variable and wavering commitment from oil and gas companies.

The energy transition will happen - but likely more slowly than the ambitious Paris agreement and adaption efforts will ramp up alongside mitigation.

Dominic’s prime areas of interest are climate change, energy and the energy transition, and sustainability. He is on the Board of four companies investing in offshore wind, electric vehicles, advanced biofuels and energy management. He is a Visiting Fellow at Cambridge Judge Business School, Visiting Professor at Cranfield University and works with the World Economic Forum and Mission Possible Partnership .Dominic was Chief of Staff at bp until 2022, having started as a geologist working in Asia, the Middle East and the North Sea. He joined bp Alternative Energy in 2007 and then led the Emerging Business & Corporate Venture Capital teams. In 2013, he was appointed Head of Group Strategy at bp prior to his appointment as Chief of Staff at the start of the biggest transformation in the company’s history. Dominic was the founding CEO of OGCI Climate Investments, a $1bn fund set up by the world’s largest oil and gas companies to invest in technologies and projects to reduce carbon emissions. He has a PhD from the University of Cambridge, MA from the University of Oxford and is married with one daughter.