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Quitol (South Goa): India, the country to soon overtake China in terms of its appetite for oil, Guyana, the world’s youngest oil producer, Qatar, the country which is betting big on gas, and the Organisation of the Petroleum Exporting Countries (OPEC) hit out at naysayers and stressed that the world will need fossil fuels even as it transitions to green energy. While all these countries acknowledged the need for multiple pathways to energy transition, they also called for continuing investments in fossil fuels.
Speaking at a panel discussion titled “Ensuring energy security for nations and industry in a VUCA world” at India Energy Week (IEW) 2024, Minister for Petroleum and Natural Gas Hardeep Singh Puri said, “VUCA characterises the world for the last 2-3 yrs. But many of the crises we faced on the energy front were self-inflicted. Because of this, a transition towards green energy gained pace and investments in fossil fuels dried up. It is not like there is a shortage of energy in the world. It is that it is not being made available.” VUCA stands for volatility, uncertainty, complexity and ambiguity.
Bringing up the issue of pricing of crude oil, Puri asked, “What is a reasonable cost of energy? Let's say that if the green hydrogen story takes off, how will oil producers and consumers react to it? We must ensure that energy transition from this point to the next is done in an orderly way.”
Puri was part of the panel discussion along with OPEC Secretary General Haitham al-Ghais, Qatar’s Minister of State for Energy Affairs Saad bin Sherida Al Kaabi and Guyana’s Minister for Natural Resources Vickram Bharrat.
Stressing on the importance of energy security for each nation, the OPEC Secretary General said that one of the key issues for the OPEC is to ensure investments in fossil fuels to meet the demand that exists. “The meaning and the impact of the word energy security is underestimated. It is the cornerstone for societal development and economic growth for every nation. Oil accounts for 30 percent of the world’s energy mix, 40-45 percent if you include gas. For us, one of the key issues is ensuring investments. There is a global consensus that oil demand is going to grow. And we need investments to meet that demand.”
“At OPEC, we have advocated for multiple pathways for energy transitions. Security is paramount to ensuring that everybody has access to energy. So, make investments in fossil fuels even as you make investments in direct capture, CCUS and climate tech. We cannot advocate stopping investments in fossil fuels,” he added.
“Renewables cannot be put to use in the petrochemicals sector. An electric car may use electricity as fuel but is made of materials that come from petrochemicals. It is irresponsible to say that we don’t need fossil fuels,” said Qatar’s Energy Minister.
Calling for an orderly energy transition, Al Kaabi said, “We need a transition. We need to use fossil fuels responsibly and use carbon capture and sequestration technologies.”
Making a case for not stopping investments in fossil fuels, Al Kaabi said, “Production declines as oil and gas fields age and investments are required. You need hundreds of billion of dollars for maintaining production. The green push has been demonising the oil and gas sector.”
Guyana’s Minister for Natural Resources called out the developed nations for not doing enough to move away from fossil fuels and said that production for oil and gas cannot be stopped until there’s demand. “Guyana knows that the window is closing on hydrocarbons, not so much gas, but more of oil. We know that Guyana needs to bring the oil out of its earth as soon as possible and use that money to prepare traditional, productive industries which can support its economy. You cannot stop production if there’s still demand. There isn’t enough being done to move away from fossil fuels,” he said.
“The window for fossil fuels is not closing fully. But the question is, when it narrows, which are the countries that will be allowed to produce oil. I hope that Guyana is one of those countries who are allowed to do that because we have a huge carbon sink and a significant carbon budget,” said Bharrat.
He called for real targets that take into account the resources and reality into account. “There are millions of people who do not have access to electricity. Should we continue to deprive them of energy access by committing ourselves to environment sustainability without striking a balance between energy transition and availability, affordability and accessibility? That's the question. We need investments in fossil fuels. We need to fashion this argument on fossil fuels and green energy as an ‘and’ argument rather than an ‘or.’”
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