OPEC backs electric vehicles, says oil remains relevant

The Organisation of the Petroleum Exporting Countries has expressed its support for the adoption of electric vehicles in a sustainable manner as well as renewable energy as part of efforts to reduce emissions.

The Secretary-General, OPEC, Mohammad Barkindo, who spoke at the Atlantic Council Global Energy Forum 2021 on Tuesday, said the world would continue to need more energy in the decades ahead.

He said, “Although there are some who believe the oil and gas industries should not be part of the energy future, that they should be consigned to the past, and that the future is one that can be dominated by renewables and electric vehicles, it is important to state clearly that the science does not tell us this, and the statistics related to the blight of energy poverty do not tell us this either.

“The science and statistics tell us that we need to reduce emissions and use energy more efficiently. Renewables are coming of age, with wind and solar expanding quickly, but — even by 2045 in our World Oil Outlook —they are only estimated to make up just over 20 per cent of the global energy mix.”

According to him, oil and gas combined are forecast to still supply over 50 per cent of the world’s energy needs by 2045, with oil at around 27 per cent and gas at 25 percent.

Barkindo said, “We appreciate that some will view this as an OPEC forecast, dispute the numbers, and state that the organisation is against renewables.

“In response, it is clear that many OPEC member countries have great solar and wind resources, and huge investments are being made in this field.

“OPEC welcomes the development of renewables. However, we do not see any realistic outlook projecting in their business-as-usual base cases that renewables will come anywhere close to overtaking oil and gas in the decades ahead.

“In terms of electric vehicles, there is no doubt that they will continue to see expansion in the transportation sector.”

He said the share of electric vehicles in the total road transportation fleet was projected by OPEC to expand to around 16 per cent by 2045.

He said, “We support their development in a sustainable manner. However, for many of the world’s population, electric vehicles do not offer a viable alternative to the internal combustion engine, primarily due to cost.

“Moreover, there is also debate about how environmentally friendly they are considering their building process, especially the required batteries, and the sourcing of the vehicles’ electricity.”

Barkindo said looking at the scale of the challenge of the energy transition, there is a need to utilise all available energies.

According to him, the future requires massive investments, with the WOO 2020 highlighting that the global oil sector alone requires a cumulative investment of $12.6 trillion through to 2045.

Without the necessary investments, there is the potential for further volatility and a future energy shortfall, which is not in the interests of either producers or consumers.