Decades from now, oil and gas will continue to account for the majority of global energy consumption, Russian Deputy Prime Minister Alexander Novak said on Thursday.
Oil and gas, which currently account for around 85 percent of the global energy mix, cannot be entirely replaced, the Russian official said the Russian Energy Week forum.
Oil currently accounts for around 31 percent of the world’s energy consumption, Novak said, adding that “it is obvious we will never move away entirely from hydrocarbons in the coming decades, despite the various projections of the future of gas and oil.”
According to the Russian official, the share of oil and gas in the world’s energy mix is set to drop from 85 percent to around 65-70 percent, not to 20-30 percent as some experts have forecast.
Russia has a more sobering view than some of the estimates of major reductions in oil and gas consumption because it thinks not only about the “hype” about new energy sources, but also about energy security, primarily Russia’s energy security, Novak added.
Russia’s view about the future of global energy demand and energy mix is more aligned to the outlooks of Saudi oil giant Aramco and of OPEC, which say that the world will continue to need a lot of oil and gas, even in 2050.
Global oil demand is expected to continue to grow into the mid-2030s to 108 million barrels per day (bpd), after which it is set to plateau until 2045, OPEC said in its 2021 World Oil Outlook (WOO) last month.
OPEC sees oil demand growing “strongly” in the short- and medium-term before demand plateaus in the long term. Renewables other than hydropower and natural gas are set to grow the most between 2035 and 2045, when oil demand is expected to be flat, according to OPEC’s estimates. Renewables and natural gas will continue to play a significant role in the evolving energy mix.
By Charles Kennedy for Oilprice.com
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In fact the global demand for oil and natural gas will continue to grow at a slightly decelerated rate well into the future underpinned by growth in both world population and the global economy and by the fact that renewables on their own will never be able to satisfy global energy demand without oil and gas because of their intermittent nature.
Russia has enough oil and gas reserves to keep it exporting both for more than a century. Therefore, it shouldn’t shy away from telling the world that oil and gas are here to stay.
Russia, the Arab Gulf producers and Venezuela shouldn’t give any credence to claims by environmental activists, divestment campaigners and IEA about the future of oil and gas. They will continue to have a bright future well into the future.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London