Oil and gas will continue to be the dominant fuel source for the foreseeable future, according to "Oil 2018," a report recently released by the International Energy Agency (IEA).
"The issue is, how do we apply technology together with an all-inclusive policy initiative to continue to benefit from this sort of energy?" IEA Executive Director Fatih Birol asked, adding carbon capture valuation storage (CCVS) technology "is not being properly addressed."
"Not much attention is being given to the issue of technology, particularly technology that could be adopted in this industry in order to improve the environmental credentials of hydrocarbons," he continued, charging both OPEC and the United Nations Framework Convention on Climate Change (UFCCC) with "a lot of work [that] needs to be done on this issue."
Speaking in a session titled "Oil Markets: As the World Turns" at CERAWeek by IHS Markit, held recently in Houston, Birol added regarding climate change, most people may think the problem is energy.
"The problem is not energy," he said. "The problem is emissions, and therefore CCVS may be of great help to make use of energy and reduce emissions to make our lives better and [enhance] prosperous economics growth."
Responding to IHS Markit Vice Chairman and CERAWeek Chairman Dr. Daniel Yergin's suggestion CCVS had previously "kind of slipped off the agenda" but is now coming back, Birol agreed it is coming back -- and strongly.
"We are pushing it at IEA as one of the priority areas with several governments -- with the United States, China, Mexico, Canada, Norway, the Netherlands and the United Kingdom," Birol said. "And I know that many other countries are also very keen to push the agenda, as well as several oil and gas companies.
"Fossil fuels are stubborn. In my view, if we want to address the key issue of climate change, the critical importance of carbon capture utilization storage as a technology, we have to deal with fossil fuels. As the climate changes, CCVS is a critical technology."
Birol is "happy that there are finally some good developments" regarding CCVS.
"You might have noticed the recent U.S. budget gave us strong support in terms of the tax credit to the CCVS project," he said. "That's something that's very important to note and underline."
Going forward
Birol said the IEA does not foresee a peak in oil demand for many years to come, though the organization does see a bit of "a slowing down of demand growth."
Speaking to the question of longer-term demand, Mohammad Sanusi Barkindo, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), said its member countries' outlook since 2017 has been "comparatively similar" to the IEA's.
"Through the year 2040, we continue to see robust demand," Sec. Barkindo said. "Going forward, based on continuous robust economic growth last year and this year, demand has been one of the highest since the global financial crisis."
Sec. Barkindo said OPEC revised its numbers to 3.8 billion global gross domestic product for both 2017 and 2018, "and we're looking more optimistic."
OPEC is also giving consideration to the growth in population, particularly in the developing world.
"OPEC is looking at, between now and 2040, an additional 1.8 billion people coming into this world, mainly from developing countries," he said, adding "energy poverty" is a pressing issue.
"Over 1 billion people still have no access to electricity nor access to heating," Sec. Barkindo said. "Over 2 billion people have no access to commercial energy for cooking. Therefore, we also subscribe to the position of the IEA that we cannot see peak demand in this projected area."
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