It’s not a surprise that OPEC, the global oil production cartel, believes there’s more longevity in oil production than the rest of the world does.
The Organization of Petroleum Exporting Countries released its latest annual World Oil Outlook report on Tuesday, during a global energy summit in Abu Dhabi, predicting oil demand will continue to rise until 2035 before plateauing through to 2045.
The organization also anticipates oil demand will peak at a higher level than it previously predicted in last year’s report, disagreeing with projections released by the International Energy Agency (IEA) last week, which sees oil demand peaking by 2030 and potentially declining quite steeply thereafter.
OPEC pins its robust outlook on the fact that “in the current geopolitical context, besides a pressing need to increase climate ambitions, countries are increasingly focused on energy security issues.”
That means countries are neglecting their climate commitments and returning to fossil fuels in a mad dash to keep the lights on. That increased demand, OPEC says, must be met with increased investment in oil and gas. In an interview with Reuters, OPEC Secretary General Hatham al Ghais said Tuesday, “If we don’t get it right this time we are sowing the seeds for future energy crises—not just one, but multiple.”
During the Abu Dhabi energy conference (Adipec) this week, other leading oil producers echoed OPEC in suggesting that the concerns over energy security had trumped concerns over the environment.
BP CEO Bernard Looney told a panel at Adipec that, three years ago, ordinary people “would almost exclusively have said net-zero” when asked what they want from energy markets. Today, Looney says, “they will inevitably tell you they want an energy system that works.”
But a system that works, and works sustainably, has no more room for expanded fossil fuel exploration.
The IEA stated last year that a net-zero emissions pathway that limits global warming to 1.5°C includes “no new oil and gas fields approved for development.” Even in a 2°C pathway, which the world is close to achieving, energy analysts Wood Mackenzie said last year that there is enough oil in current discoveries to meet future demand.
Meanwhile, increasing oil production does not necessarily create energy security. The U.S. is the world’s leading crude producer and has been increasing its output since 2008, yet the country still fell victim to the soaring costs of international crude.
The best way to build energy security is to build diversity in supply, which means investing much more in renewables and transitioning away from reliance on fossil fuels.
If you’re curious, the IEA has outlined how that transition can be achieved while maintaining energy security. Fossil fuels have a role to play, but it isn’t an expansive one.
Eamon Barrett
greeninc.news@fortune.com
@eamonbarrett88
CARBON COPY
Catalyzing green energy
On Tuesday, during the ADIPEC energy conference hosted by the Abu Dhabi National Oil Company, the U.S. and the UAE signed an agreement to “catalyze” $100 billion in green energy funding through to 2035. The so-called Partnership for Accelerating Clean Energy (PACE) is not a funding commitment, but a scheme to motivate private industries to invest more in clean energy, including nuclear. The UAE will host next year’s COP 28 conference. CNBC
A U.S. windfall tax
U.S. President Joe Biden is pushing for a windfall tax on oil and gas company profits, calling the industry’s record earnings this year a “windfall of war” and saying oil majors have “a responsibility to act beyond the narrow self-interest of [their] executives and shareholders.” The head of a domestic oil lobby criticized the president’s plan, saying a windfall tax “discourages investment in new production, which is the exact opposite of what is needed.” WSJ
Who will be at COP 27?
U.K. Prime Minister Rishi Sunak has signaled that he may attend this week’s COP 27 conference in Egypt after all, having previously said he would skip the global climate conference in order to focus on domestic issues. Alok Sharma, the government’s former climate tsar, who led the U.K. in hosting last year’s COP 26 conference, was among the Conservative party members pressuring Sunak to reconsider, calling the PM’s plans to skip the climate summit “disappointing.” But some climate campaigners have already lost faith in the effectiveness of COP meetings. FT
Tackling petrochemicals
GF Biochemicals, an Italian company founded by former soccer star Mathieu Flamini, is using agricultural waste to tackle pollution in the petrochemical industry by replacing the fossil fuels that currently form the building blocks of consumer products. The 14-year-old startup uses agricultural waste to create levulinic acid, an industrial chemical normally derived from petrochemicals and used in paint, cosmetics and thousands of other products. But, as with many environmental startups, GF Biochemicals’ challenge now is to achieve economies of scale. Wired
IN CASE YOU MISSED IT
Is Europe’s energy crisis just getting started? The latest inflation data suggests a winter of pain ahead by Will Daniel
The global energy crisis is a ‘shock of unprecedented breadth and complexity,’ IEA warns, but it may also be a ‘definitive turning point’ by Tristan Bove
“We literally live on the stuff they pollinate”: This Arab-backed Israeli startup is helping save the world’s bees by Shoshanna Solomon
How companies can significantly extend the reach of sustainability by Kanika Sanghi, Aparna Bharadwaj and Lauren Taylor
Russia’s oil power ‘will never return,’ the IEA says. ‘The rupture has come with a speed that few imagined possible’ by Vivienne Walt
CLOSING NUMBER
1.2 billion hectares
Researchers at the University of Melbourne have served up another reminder that planting trees isn’t enough to solve climate change. The university’s Climate Futures initiative assessed the national climate action plans of nearly 200 economies and found that the strategies were “dangerously overreliant” on proposals to offset carbon emissions by planting trees. Collectively, the 200 nations have pledged to plant 1.2 billion hectares of trees—more than the entire area of the U.S. Climate Futures’s report warns such hefty tree planting would increase conflict for land use, while also moving too slowly to actually offset carbon emissions.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
