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OPEC Secretary-General: The increasing global demand for energy requires reducing emissions, not the demand for oil

27-04-2024

Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), Haitham Al-Ghais, said on Friday that the pace at which global demand for energy is increasing means that alternatives cannot replace oil in the required volume. Al-Ghais added in an article distributed by the OPEC General Secretariat in Vienna, "Instead of calling for stopping oil consumption, the focus should be on reducing emissions." He pointed out that the recent report issued by The Economist magazine embodies a worrying trend of narratives that increasingly use terms such as “the end of oil” while at the same time reducing or omitting key details related to current and future demand for crude. He considered that such assertions, despite all the evidence to the contrary, become more dangerous due to their ability to fuel chaos in the energy field. Al-Ghais wondered what would happen in the global oil market if the supply of oil declined amid the continued rise in global demand for energy as we are witnessing today? He said that although the main goal of the Paris Agreement on climate change was to reduce emissions - not to choose energy sources - this appears to have been forgotten and replaced by rigid rhetoric to reduce demand for hydrocarbons without considering the impacts on energy security and socio-economic challenges. He stated, "This type of narrative ignores that oil is still an indispensable element in promoting global prosperity and maintaining energy security." In this regard, Al-Ghais said, “The writer Ed Conway was not exaggerating in his book (The Material World) when he mentioned that the oil era freed humanity from many of the troubles of manual labor, and raised incomes all over the world, which helped humanity live longer. And the availability of materials.” "The chemical from which we make the fertilizer that keeps half the planet alive." He mentioned that it is sometimes easy to forget how important oil is in our daily lives, but without it we would not have gasoline, heating oil, jet fuel, syringes, soap, computers, car tires, contact lenses, prosthetics, and many types of medicines, as well as the fiberglass, resin, and plastic needed to build most wind turbines. The ethylene used in solar panels will also not be present, and many other things.” Al-Ghais explained, “The reality is that the end of oil is not in sight and that oil still constitutes nearly a third of the global energy mix today and global demand for oil continues to rise.” He pointed out that the world witnessed during the past year a growth in global demand by about 2.5 million barrels per day, and OPEC and many other forecasting agencies are witnessing significant growth in the coming years as well. Al-Ghais said that the indication is that demand for oil may reach its peak by 2030. Or even to decline by more than 25 percent during the same time frame, as some accounts indicate, ignores what all energy sources can actually provide and in any time frame, especially since the year 2030 is less than six years away from now. He pointed out that OPEC's research shows the extent of the damage that could be caused to energy security when pointing to a staggering deficit in the oil market of more than 16 million barrels per day between expectations of high global demand for oil and supply by 2030 if investments in the oil sector stop. Al-Ghais stressed, “Many narratives also fail to point out that dozens of initial proposals for ambitious policies to reach zero emissions are facing increasing opposition around the world as people begin to understand the true cost of these policies and their corresponding capabilities. The world also needs affordable energy.” "Reliable, lower emissions and their desire for a stable energy policy." Al-Ghais stated that the world needs more energy, as all energy sources will be needed to meet the increasing population growth and urban expansion. At the conclusion of his article, Al-Ghais pointed out that by 2030 alone, more than half a billion people are expected to move to cities around the world as the global economy continues to expand, and this is equivalent to about 50 new cities the size of London.