Powering change

There is no one path for the energy transition – and OPEC believes the world needs to take an all-options, all-solutions and all-technologies approach to ensuring energy security

A global, multilateral approach will be vital in evolving a sustainable and balanced energy transition in which no one is left behind. Together, we need to ensure that the necessary investments are made in all energies, simultaneously progressing the imperatives of economic growth and development, energy security and affordable access, and environmental sustainability. In this regard, the G20 is an essential voice.

The challenges before us are enormous and complex. We have been delivered a reminder of this with the recent strains related to energy affordability, energy security and the need to reduce emissions, playing out across the world in 2022. 

Focusing on only one of these issues while ignoring the others can lead to unintended consequences, such as market distortions, heightened price volatility, investments being shelved and energy shortfalls. Success requires a delicate balancing act, comprehensive and sustainable solutions, and having all voices at
the table. 

We need to ensure energy is affordable for all; we need to transition to a more inclusive, fair and equitable world in which every person has access to energy as set out in United Nations Sustainable Development Goal 7; and we need to reduce emissions. Oil has a great role to play in each part. 

Meeting the world’s needs

In the Organization of Petroleum Exporting Countries’ World Oil Outlook, we see oil still making up close to 29% of the world’s energy needs by 2045. This will require huge investments, with the report showing that oil-related investments across the full value chain amount to $12.1 trillion between now and 2045. 

However, we all need to recognise that the reality globally is that not enough investment is going into the industry. This is true for all energies. To put it simply: the sustainability of the global energy system is at stake. 

OPEC members remain committed to investments to ensure supply meets demand and we stand ready to invest further in efforts to decarbonise the industry. 

An investment-friendly space

This requires all industry stakeholders to work together to ensure a long-term investment-friendly climate, with sufficient finance available. One that is sustainable and works for both producers and consumers, and for developed and developing countries.

With all this in mind, we know this is no time to exclude the oil industry. We have recently heard calls for oil-producing countries to play a key role in ensuring stable and sustainable global energy supplies, and at the same time we also hear demands from industrialised countries to end financing for fossil fuel projects. 

It is difficult to bridge these two statements, but further delays in investments will surely lead to more volatility and turbulence in the energy landscape.

In terms of tackling climate change and reducing emissions, we fully believe that the oil industry can be part of the solution to unlocking a low-emissions future. The history of the oil industry has always been focused on innovation, on providing solutions to the most intractable of challenges. 

For example, carbon capture utilisation and storage, including direct air capture, blue hydrogen and other technologies, can be leveraged – along with the promotion of the circular carbon economy – to improve overall environmental performance. Moreover, OPEC members are also investing heavily in renewables. 

A lead role

OPEC is ready, willing and able to play a key role, just as it did with the huge energy challenges the world faced at the start of the pandemic, when Saudi Arabia provided impressive leadership of the G20 during 2020, particularly in bringing all parties to the table during the time of crisis.

OPEC continues to put its faith in dialogue and cooperation. Our door is always open. We believe there is no choice but to work together on these issues to avoid energy volatility and insecurity. 

The G20 leaders in Bali need to look holistically at the fundamental pillars of successful and orderly energy transitions, namely energy security, affordability and sustainability.

Following the right paths

We need to follow all the right energy transition paths and appreciate that there is not just one path for all. There are many ways to get from one point to another. OPEC believes that the world needs to take an all-options approach, an all-solutions approach and an all-technologies approach.