Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC), Dr. Mohammed Barkindo, on Monday said the current moves by countries and big investors to divest from the oil and gas industry will not reduce global emissions.
He explained that rather than shutting down the industry by withdrawing investments, the international community should focus on reducing greenhouse gas emissions in order to achieve the long-term goal of the Paris Agreement.
Speaking at the virtual OPEC/ World Economic Forum Connect in Vienna, Austria, he stated that trying to ‘ostracise’ the oil industry in the attempt to save the environment was not the most viable path to achieving zero global emissions and urged world and business leaders to explore other options.
According to him, all sources of energy will be needed in a post-pandemic world, noting that despite all the noise about the irrelevance of oil in the future, the commodity will still retain the largest share in the energy mix even by 2045, going by OPEC’s projections.
He said: “That takes us to the crux of our agenda today, as we discuss current trends in the investment community and wider societal pressures that could have a profound impact on the investment requirements that are essential to meet the demand needs of tomorrow.
“The efficacy of ‘divestment’ has also been called into question by figures as prominent as Bill Gates, who famously said in an interview last year, ‘Divestments to date probably have reduced about zero tonnes of emissions.’
“This is a significant statement because the international community’s focus must be on reducing greenhouse gas emissions in order to achieve the long-term goal of the Paris Agreement.”
He said this requires ‘all hands on deck’ and not the ostracising of an industry that could make a major contribution to the achievement of this goal, explaining that the narrative of an energy transition from one source to another is misleading.
According to him, the challenge of tackling emissions has many paths and all should be explored.
“At OPEC, as responsible global citizens, we take the climate challenge extremely seriously. We advocate enhanced global collaboration to address the challenge and support the multinational channels that would allow a more coherent, a balanced and integrated approach for realising the Paris Agreement goal and interlinked sustainable development aspirations.
“The energy transition must be holistic, inclusive, fair and equitable in accordance with the core UNFCCC principles of equity and common but differentiated responsibilities and respective capabilities,” he stated.
Barkindo added that technological innovation, including Carbon Capture and Sequestration technologies (CCUS), utilisation of hydrogen, enhanced investment for energy access and improved energy efficiency will be crucial in securing a sustainable future and building resilient societies in the post pandemic era.
Barkindo also called for a strategy to overcome financial and institutional capacity constraints and support innovative funding for new technologies with an inclusive approach.
He reiterated his takeaways from the OPEC’s flagship publication, the World Oil Outlook 2020, on the need to increase investment in the sector rather than the call for divestment.
He said: “The first important point to emphasise is that the outbreak of the COVID-19 pandemic resulted in the sharpest downturn in energy and oil demand in living memory, something nobody could have foreseen when we met last year.
“All forms of energy will be needed to support the post-pandemic recovery and address future energy needs. Oil is expected to retain the largest share of the energy mix throughout the outlook period, accounting for a 27 per cent share in 2045.
“World oil demand is projected to increase from nearly 100 mb/d in 2019 to around 109 mb/d in 2045. To meet this future demand, the global oil sector will need a cumulative investment of $12.6 trillion in the upstream, midstream and downstream through to 2045.”