The pace at which global energy demand is growing means that alternatives cannot replace oil at the necessary scale, OPEC Secretary General Haitham Al Ghais said, adding that rather than calling for an end to oil, the focus should be on reducing emissions.
A recent report on oil demand by “The Economist” exemplifies a worrying trend of narratives that increasingly use terminology like – the end of oil – while simultaneously underplaying or omitting key details regarding current and future oil demand, Al Ghais wrote in an article distributed Friday by the OPEC Secretariat.
“Such assertions, despite all evidence to the contrary, are all the more dangerous given their potential to foster energy policies that stoke energy chaos. What if investments in supply fall as a result, but demand for oil keeps increasing, as we are seeing today?”, he wondered.
Although the main goal of the Paris Agreement on climate change is to reduce emissions – not to choose energy sources – it feels like this has been forgotten, re
placed by rigid narratives to reduce demand for hydrocarbons without thinking through the effects on energy security, socio-economic development, or reducing energy poverty, he elaborated.
These kinds of narratives forget that oil continues to be irreplaceable in fostering global prosperity and maintaining energy security.
In this respect, Ed Conway, a writer, was not exaggerating in ‘Material World’ – one of The Economist’s best books of 2023 – when stating that the Oil Age – delivered humankind from much of the drudgery of manual labor – lifted incomes around the world – helped us live longer – and provides the chemicals from which we make the fertilizers that keep half the planet alive, the OPEC chief pointed out.
He went to say “it is sometimes easy to forget just how critical oil is to our everyday lives, but without it we would not have gasoline, heating oil, jet fuel, syringes, soap, computers, car tires, contact lenses, artificial limbs, many types of medicine and much more. The fiberglass, resin a
nd plastic needed to construct most wind turbines and the ethylene for solar panels would not exist either”.
“The reality is that the end of oil is not in sight. Oil continues to make up almost a third of the global energy mix today and global oil demand continues to rise. Last year, we saw global demand growth of around 2.5mn b/d, and OPEC and many other forecasting agencies see significant growth in the coming years too,” Al Ghais said.
He suggested that oil demand could peak by 2030, or even drop by more than 25% over the same time-frame, as some narratives allude to, overlooks what all energy sources can actually deliver and on what timescale, especially as 2030 is less than six years away.
OPEC research outlines how detrimental this could be for energy security when noting a staggering oil market deficit of over 16mn b/d between forecast rising global oil demand and supply by 2030 if investments into upstream activities stopped today.
“We do not believe that this makes for prudent energy-making polic
y,” he noted.
Many narratives also fail to mention that scores of initial proposals for ambitious net-zero policies are increasingly being opposed across the world, as people begin to understand the true cost of these policies and their corresponding capabilities, he stated.
People want affordable, reliable energy and lower emissions. They want stability.
The simple yet crucial fact also sometimes left out of these narratives is that the world needs much more energy, as all sources of energy will be needed simply to meet rising population growth and urbanization, he said.
By 2030 alone, over half a billion more people are expected to move into cities across the world as the global economy continues to expand, he said, noting this is the equivalent of approximately 50 new cities the size of London.
Source: Kuwait News Agency
