Capital spending on oil and gas supply bounced back in 2018 following three consecutive years of decline.
According to the International Energy Agency's World Energy Investment 2019 report, while global energy investment stabilised in 2018, investment stalled for energy efficiency and renewables.
Global energy investment totaled more than $1.8 trillion in 2018, a similar level to 2017. For the third year in a row, the power sector attracted more investment than the oil and gas industry. The biggest jump in overall energy investment was in the US, where it was boosted by higher spending in upstream supply, particularly shale, but also electricity networks.
China remains the world's largest investment destination.
According to the IEA, approvals for new conventional oil and gas projects fell short of what would be needed to meet continued robust growth in global energy demand. Additionally, there are few signs of the substantial reallocation of capital towards energy efficiency and cleaner supply sources that is needed to bring investments in line with the Paris Agreement and other substantial development goals.
This was reiterated by the IEA's executive director, Dr Fatih Birol. He says: 'Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies.
'The bottom line is that the world is not investing enough in traditional elements of supply to maintain today's consumption patterns, nor is it investing enough in cleaner energy technologies to change course. Whichever way you look, we are storing up risks for the future.'
The report also notes that investment patterns have shifted towards energy supply projects that have shorter lead times. In the upstream oil and gas sector for example, the industry is bringing capacity to market more than 20% faster than at the beginning of the decade.