Emmanuel Addeh in Abuja
Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Dr Sanusi Barkindo, has bemoaned the contradictions in the world’s richest countries’ call for more oil production and at the same time stopping investment in the sector.
In a keynote address at the Atlantic Council Global Energy Forum in Washington DC, United States, the Nigerian-born OPEC chief insisted that the world needed to ensure that energy remains affordable for all.
In addition, the outgoing Secretary General stated that there was the need to transition to a more inclusive, fair, and equitable world in which every person has access to energy as referenced in UN Sustainable Development Goal 7.
While admitting that countries should reduce emissions, however he maintained that oil has a role to play in each part of the process.
He reiterated that to put energy demand growth in some context, OPEC continues to see global energy demand rising by 28 per cent in the period by 2045, clearly requiring huge investments.
In the same vein, he repeated that the oil industry alone, the OPEC World Oil Outlook sees required investments totalling $11.8 trillion through to 2045.
Barkindo said that these investments are essential for both producers and consumers, particularly given the huge investment drop of 30 per cent seen in 2020.
“More energy, more investments are required. However, we also hear conflicting statements on these issues as exhibited most recently by the G7 Ministers of Climate, Energy and the Environment.
“They called for oil and gas producing countries, including reference to OPEC, to play a key role in ensuring stable and sustainable global energy supplies, but at the same time committed themselves to end financing for most overseas fossil fuel projects by the end of 2022. I think there is a saying in English: ‘you can’t have your cake and eat it.’
“To put it simply: if investments are not made globally, if the capital does not flow, and at the same time if consumers are still demanding the product, we could see further major energy insecurity in various forms,” he argued.
Barkindo lamented that the world was at an inflection point, shifting away from global dialogue and cooperation to more restrictive silos, insisting that it is vital to keep channels of communication open, work together, and maintain the multilateral approach to dealing with all global challenges.
“I am proud to recall the way in which participants in the Declaration helped pull the industry back from the brink of catastrophe following the downturn in 2014-2016. It was a monumental effort, but one that helped the industry rise again, like a phoenix from the ashes, and, in turn, had a positive impact on the global economy, and trade worldwide.
“Having the Declaration in place also proved extremely beneficial in 2020, when there was a need to react quickly and forcefully in the face of the devastating pandemic.
“We can never forget April 2020. Global demand was down by 20 million barrels a day, WTI plummeted into negative territory. These were visceral events, and I personally recall sitting there open mouthed watching on TV how quickly WTI plunged on 20 April.
“But the DoC decisions taken in the same month helped right the ship, and set us on a course, albeit slowly, to recovery,” he recalled.
Barkindo added that it was important to recognise there is no one-size-fits all pathway to the energy transition, saying that: “ We need to take an all-options approach, an all-solutions approach, and an all-technologies approach.”
With the recent strains and conflicts related to energy affordability, energy security, and the need to reduce emissions playing out in regions across the world at the end of 2021 and into 2022, he noted that focusing on only one of the issues, while ignoring the others, could lead to unintended consequences.
“It requires a delicate balancing act, comprehensive and sustainable solutions, and all voices at the table. It is an energy sustainability trilemma, with each piece of the jigsaw having to fit together,” he said.
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