C. Oil and gas alternative scenarios

A sensitivity analysis for the oil and gas sector was conducted in which the reduction in energy production is externally controlled (see section 7.1.2). The following two alternative scenarios have been compared with NZ50:

• OilExpA: NZ50 targets but both oil production and natural gas production are maintained at a minimum of 25% of the reference scenario levels at all times
• OilExpB: NZ50 targets but both oil production and natural gas production are maintained at a minimum of 50% of the reference scenario levels at all times 

Higher production levels for oil and gas, coupled with different sectoral consumption profiles, still allow emissions to be reduced to the same extent but in different ways than in NZ50, as shown in Figure C.1.

Figure C.1 – Evolution of GHG emissions – alternative scenarios #

The (direct) costs of reducing emissions increase under those alternative scenarios, mainly for two drivers:

1. Reductions transferred from oil and gas production to other industries and to the building and transport sector;
2. Larger use of DAC to compensate for the higher GHG emission left from economic activities: by 2050, DAC would almost triple, from 15 MtCO₂e (NZ50) to 41 MtCO₂e (OilExpB) captured annually.

GHG reductions not achieved in the oil and gas sector would be distributed across other sectors as indicated in Table C.1. Figures C.2 and C.3 present the projection for these two scenarios against NZ50 in two sectors that are discussed in section 7.1.2.

Table C.1 – Oil and gas production and GHG emissions target variation per sector under alternative scenarios #

Figure C.2 – Final energy consumption in the building sector – alternative scenarios #

Figure C.3 – Final energy consumption in the industrial sector – alternative scenarios #

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Footnotes

¹ Δ wrt NZ50 = Difference in GHG emissions between OilExp scenarios and NZ50; a positive difference means more emissions in OilExp scenario; a negative one, less emissions

² regroups energy production and fugitive emissions

³ regroups Industry processes and combustion

⁴ regroups residential and commercial sectors