“We are feeling the same pressure from our shareholders that everyone in the room is feeling: that they need to see tangible progress and see it get faster,” she said.
Meanwhile, Santos’ managing director Kevin Gallagher said the industry in Australia was facing rising demands from climate advocates and institutional shareholders alike, and must demonstrate clear pathways to decarbonise before it was too late.
“We have got to get on the front foot as an industry and really lead the charge on decarbonisation before we find ourselves in the same place as the coal industry,” he said. “Because that’s what will happen if we think we can do nothing and just keep doing business as usual.”
Santos is pursuing the development of a carbon capture and storage facility at its Moomba gas plant in South Australia, which could bury carbon dioxide emissions underground, Mr Gallagher said.
UBS analyst Tom Allen considers Santos the strongest performer on the environmental, social and governance (ESG) front due to the Moomba project’s potential.
Globally, oil and gas producers are under increasing pressure to act on climate change, with analysts openly questioning whether the industry is facing a “watershed” moment after a series of courtroom and boardroom upheavals at ExxonMobil, Chevron and Shell.
The implications for Australia, which counts liquefied natural gas (LNG) as one of its biggest exports, could be severe. Producers forecast demand to remain strong as Asian nations continue turning to the fuel for a cheap, reliable and cleaner alternative to coal.
Supporters of gas describe it as the vital “transition fuel” in the green power shift, as a comparatively less-emitting alternative to coal that is still capable of dispatching on-demand energy to support weather-dependent wind and solar generators.
But its future is increasingly under question, with scientists and investors voicing concerns around emissions in drilling and shipping, and accelerating advances in renewables. Climate advocates say gas remains a heavy source of emissions and its role must be limited.
Mechthild Worsdorfer, a director with the IEA, described the agency’s net-zero modelling as a “landmark report, which had been carried out in response to growing momentum behind global pledges to reach net-zero emissions, typically by mid-century.
The modelling showed the 2020s needed to be a decade of “massive clean energy expansion“, she said, while electric vehicle sales must increase 18-fold from about 3 per cent of sales today to more than 70 per cent by 2035.
“No new oil and natural gas fields are needed in our pathway,” she said. While acknowledging the scenario represented a “narrow and challenging” pathway, Ms Worsdorfer said it was still a viable one.
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