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Alan Mammoser

Alan Mammoser

Alan Mammoser writes about energy, environment, cities, infrastructure and planning. He writes the weblog, www.warmearth.us

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5 Takeaways from the Oilprice Interview With OPEC Sec. Gen. al-Ghais


Since the public spat over long-term forecasts between the leading voice of the world’s oil producers – OPEC – and consumers – the International Energy Agency (IEA) – broke out last fall, it remains apparent that a deep divide exists between them. Their contrasting reports were published last October in the weeks leading up to COP28. 

In a recent interview with Oilprice.comHE Haitham Al Ghais, OPEC Secretary General, reaffirmed his organization’s position on long-term oil demand while elaborating on its perspective on carbon emissions. 

His comments reflect a very different outlook from that of the IEA on key variables that will determine much of the world’s energy future. 

Forecasts rising and falling 

In its flagship World Oil Outlook (WOO) last fall, OPEC upped its long-term forecast for global oil demand to its highest level ever, predicting an increase of 23% from 2022 to reach 116 million barrels per day (mb/d) in 2045. Meeting this demand will require $14 trillion in oil sector investments, approximately $610 billion annually, by 2045. 

At about the same time, the IEA in its World Energy Outlook (WEO), significantly lowered its long-term projections and, in its three scenarios, made the bold prediction that demand for all fossil fuels will peak by 2030. 

This drew a sharp rebuke from OPEC, which stated that such projections were unrealistic and would hamper investment. 

Now, six months later, with demand for oil, natural gas, and renewables rising worldwide, it appears that OPEC is winning the argument, at least in the near term. The IEA has revised upward its forecast for petroleum demand in 2024. But in the long term to 2050 – the net-0 target year – their outlooks completely diverge.

Yet both embrace an energy transition, or at least acknowledge the need to address the problem of carbon emissions. 

The Secretary-General speaks on climate

In the interview, Secretary General Al Ghais held to the position that long-term oil demand will rise substantially while he also expressed support for the UN’s ongoing climate diplomacy.  

“It is...important to stress that the oil industry was proactive at COP28, with 52 oil companies representing 40 percent of global oil and gas production – including many from OPEC Member Countries – endorsing the Oil and Gas Decarbonization Charter,” he said.  

“In doing so, they pledged to reduce carbon emissions to net zero by 2050, end routine flaring by 2030, and curb methane emissions to near-zero by 2030.”

While avoiding the term ‘energy transition,’ he spoke of the need for dealing with climate change and carbon emissions. 

“The OPEC Secretariat, which supports its Member Countries with research and data on a variety of key oil and energy industry issues, is fully cognizant of the importance of climate issues,” he told Oilprice.com. 

“Post COP28, our goal must be to reduce emissions – the core objective of the Paris Agreement – while ensuring energy security and universal access to affordable energy.”

Technical solutions

Mr. Al Ghais placed a strong emphasis on technical solutions, mentioning what OPEC sees as the key technologies. 

“Fostering technological innovation will also remain a key focus for OPEC. In this regard, our Member Countries will continue to invest in upstream and downstream operational efficiencies; deploy vast expertise to further help decarbonize the oil industry; and mobilize cleaner technologies at scale.”          

“We believe in an all-technologies approach, which is why our Member Countries are investing in carbon capture utilization and storage, direct air capture, the circular carbon economy, as well as other energy sources, such as hydrogen, renewables and nuclear.”

No peak for petrol

“When looking at realistic outlooks and strategies for both climate and energy, what the future shows us is that we need to embrace all forms of energy,” the Secretary-General told Oilprice. 

“It is not about choosing one source over another, especially as energy demand is set to rise by 23% by 2045, on the back of the global economy doubling in size, the world’s population surpassing 9.5 billion, and given that billions still lack access to basic forms of energy.” 

Mr. Al Ghais characterized OPEC’s position as an ‘all-peoples, all-fuels, and all-technologies’ approach to ensuring energy security while reducing emissions. He then got to the heart of the matter. 

“There appears to be some outlooks that are ideologically driven, with an extremely narrow framing of the challenges before us.”

“For example, the IEA's net-zero scenario is a normative one, which describes what needs to happen to achieve its pre-specified future.”

“It is true that renewables – mainly solar, wind and geothermal energy – will expand faster than any other source of energy in the coming decades, given their low starting base”. 

“However, hydrocarbons will still be required well into the 21st Century and beyond, and we see oil retaining the largest share of the energy mix at almost 30 per cent, and global oil demand increasing to 116 million barrels a day by 2045.” 

Different outlooks on key variables

Of course, to call a scenario ‘normative’ is not in all cases a valid criticism; a scenario is not a forecast. It is meant to guide, not necessarily predict. 

It appears that OPEC in its forecast, and the IEA in its scenarios, are looking at the future from opposite perspectives. They are making opposing bets, so to speak, on key variables. 

OPEC, in its forecast, is betting that electric vehicles and other forms of carbon-free transport will not come to dominate in the years ahead, that China will remain heavily reliant on fossil fuels in its power system, that India’s demand for petroleum will steadily rise, and that any decline in demand for hydrocarbons in the developed world will be more that offset by rising demand in the rest. 

The IEA, in its scenarios, makes opposing assumptions on all of these.  Related: Against All Odds American Oil Soars Under Biden


The agency projects global oil demand peaking at 102 million barrels per day before 2030. Demand for natural gas will also peak in 2030. 

In the three scenarios of its 2023 World Energy Outlook, it projects oil demand declining to 2050: to 97.4 mb/d in its ‘Stated Policies Scenario’; to 54.8 mb/d in its ‘Announced Pledges Scenario’; and to approximately 25 mb/d in its ‘Net Zero Emissions by 2050 Scenario’. 

It projects that renewable energy, mainly wind and solar, will be 50% of electricity generation capacity by 2030, up from 30% currently, while renewable energy investment will exceed investment in fossil fuel projects. 

The IEA sees electric car sales increasing greatly with a concomitant decline in gasoline demand by 2050, while OPEC expects demand for gasoline to rise by 2045. 

Meanwhile, China’s economy will evolve while its clean energy use grows; the IEA sees China’s growth rate moderating and lower future demand in the country’s energy-intensive industries. And while India’s oil demand is rising to 2030, its long-term rise will be less than what OPEC thinks. 

War of words

The diverging perspectives, and accompanying rhetorical battle, are likely to intensify.  

IEA Executive Director Fatih Birol may have unwittingly fired the first shot last summer when anticipating the WEO report, saying that the world is now at “the beginning of the end of the fossil fuel era.” OPEC’s rebuke of the IEA scenarios followed. 

Things heated up last week at CERAWeek in Houston, when Amin Nasser, CEO of Saudi Aramco, offered forecast figures similar to OPEC’s and then went further. Nasser openly disparaged the significant progress in renewables during the past two decades, saying it’s done little to reduce carbon emissions despite enormous investment, while he criticized a ‘visibly failing’ energy transition. 

His remarks had the ring of triumph over a nemesis. From what he said, it appears that the rising rhetorical battle over greatly different viewpoints and hopes for the future of energy is just starting to heat up. 

Perhaps, instead of going down that path, OPEC and the IEA should sit down and politely argue over the key variables, setting out their differing positions clearly, point by point. Then, they might keep silent and allow people, governments, and investors to decide. 

By Alan Mammoser for Oilprice.com

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