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IEA: OPEC Can’t Save The Oil Market

Ross McCracken

Ross McCracken

Ross is an energy analyst, writer and consultant who was previously the Managing Editor of Platts Energy Economist

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Why Don’t We Fight Wars Over Carrots?

Carrots

What are the geopolitics of carrots? It’s an odd question to ask, but one posed by veteran oil analyst Professor Paul Stevens at the LNGgc conference held October 9-10 in London. The point of the question is that carrots do not have geopolitics because they are cheap, abundant and available nearly everywhere.

Stevens was comparing carrots to renewable energy and contrasting both with oil. Renewable energy is widely distributed and available in some form to all countries.

Oil resources, at least conventional resources, are highly concentrated in the Middle East, while the main areas of consumption, with the exception of North America, tend to lack domestic reserves commensurate with demand.

Stevens’ observation was that decarbonization will de-politicize the provision of energy in terms of geopolitical competition for access to oil reserves and supply.

However, before this promised land is reached, geopolitics is likely to have some very real impacts and there is no certainty that energy security will improve. The path of decarbonization, whether fast, slow or unfinished, is likely to prove rocky.

Rapid change

The wide gap between climate change ambitions and current policies, alongside the large drop in renewable energy costs, suggest that oil companies may be substantially underestimating the likely speed and scale of change.

Take, for example, ratings agency Fitch’s recent report Midwest US Set To Experience Strong…




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