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Over the past year or so there has been a marked shift in attitudes to energy policies across the world, as many populations and governments increasingly question aspects of some initial net-zero policies and acknowledge the need for reliable and affordable energy access alongside reductions in emissions.
Against this backdrop, at an event of great importance for the Organization, OPEC launched its 17th World Oil Outlook (WOO) – what Secretary General Haitham Al Ghais aptly labelled a “landmark edition” – on 9 October at the King Abdullah Petroleum Studies and Research Center (KAPSARC) in Riyadh, Saudi Arabia.
The result of months of sophisticated modelling, writing, reviewing and production, this year’s WOO contains a wealth of data-driven, expert analysis, ensuring its value as a constructive reference tool for energy stakeholders and policymakers who are serious about prudently planning for the world’s short, medium and long-term energy future.
Recent developments related to energy policy shifts, reassessments of the speed and nature of energy transitions, as well as developments in the economic landscape, have led the OPEC team to reassess exactly what each energy can deliver, with a focus on realistic solutions.
In this respect, the Outlook underscores that if the world is to achieve a sustainable, orderly and just energy future, policymakers need to adopt an ‘all-peoples, all-fuels, and all-technologies’ approach.
Faced with expanding populations and economic and energy demand growth, calls to stop investing in fossil fuels are simply not conducive to maintaining energy security. The global population is expected to grow by around 1.5 billion people, reaching 9.5 billion by 2045. Consequently, demand for all primary fuels (excluding coal) will increase in the long term, with global primary energy demand set to increase by 23 per cent to 2045.
While other renewables (notably wind and solar) see their share in the energy mix increasing from 2.7 per cent to 11.7 per cent in 2045, it is oil that is set to remain the fuel with the largest share at 29 per cent by 2045. Global oil demand is set to increase by more than 16 mb/d, moving from 99.6 mb/d in 2022 to 116 mb/d in 2045. The 2045 level is 6 mb/d higher than that seen in the WOO 2022, and has the potential to move even higher.
The Outlook clearly demonstrates that energy transition debates should no longer disregard the critical role that commodities like oil will continue to play in fostering energy security. Instead, the world needs to reduce emissions while ensuring access to the energy that people need to live securely and comfortably.
Towards these goals, OPEC Members are investing in upstream and downstream capacities; mobilizing cleaner, innovative technologies; deploying vast expertise to decarbonize the oil industry; making major investments in renewables, hydrogen, carbon capture utilization and storage; and promoting the circular carbon economy. This is all highlighted in this edition of the OPEC Bulletin.
Ahead of this year’s United Nations Climate Change Conference (COP28) in the United Arab Emirates – where the world will evaluate progress on the Paris Agreement – COP28 President-Designate Dr Sultan Ahmed Al Jaber has said that the world needs “maximum energy, minimum emissions”.
The Outlook emphasizes that a healthy degree of realism will be necessary to achieve this goal, especially because, as Al Ghais noted in Riyadh, “there is no credible way to address the challenges before us without utilizing all available energy sources and technologies.”
At COP28, it is hoped that decision makers focus on enabling economic growth and boosting energy access while reducing emissions. The fact that all sectors will have a place at the table represents an excellent start towards meeting these goals and ensuring that COP28 ends as a ‘Cop of Solutions’.
Ultimately, ensuring future energy security in the face of rising population growth and energy demand while reducing emissions necessitates all energy stakeholders and countries working together. Towards this end, the WOO underlines exactly why massive investment in all fuels and technologies is needed now, more than ever.
