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Wednesday , December 7 2022

Balanced energy policy or a chaotic transition

This post has been read 8914 times!

NET zero decarbonation, carbon storage, hydrogen, and biofuels are the new vocabulary of the current age. How soon will we move away from fossil fuels? Will it be by the end of 2050? Is the world moving too fast? Will the US producers increase or decrease investments in oil and gas? Are we hearing constant messages from the American administration in its fight against higher oil prices for making the American voters happy? Is it practical? Meanwhile, oil companies are reducing their investments by more than 50 percent, or leaving the core of OPEC+ producers, which are facing hostile criticism for pushing the oil prices up when they are being asked to both invest and reduce prices at the same time. Today, the world is facing some imbalance in its energy supply in oil and gas.

This is mainly aimed at pushing away from fossil fuels, knowing well that it is not possible to reach the targeted date of the end of 2050. Europe is facing a shortage of gas supply from Russia because of the politics involved. It is depending more than 40% on one single supplier. A compromise must be reached in this regard. At the same time, demand for gas is increasing from Asia, which will require taking some volume from Europe and directing it to the new Asian market. The USA is losing 1.5 million barrels of crude production in order to pave the way for the US administration to move away from fossil fuels with pressure and support from the shareholders.

On the other hand, coal, which is the dirtiest fuel and the main cause for global pollution. is still on demand. Major producers and consumers are not ready to phase it out. Regardless, OPEC+ still has to meet the global oil demand, despite the fact that some oil countries are just not able to meet their quota obligation, thereby causing oil losses rather than oil gains. Energy mix is the answer to the problem related to climate change instead of getting rid of fossil fuels altogether. The oil industry is the better option for handling and tackling such complicated future challenges than politicians or environmentalists with their given deadline dates and without consulting. They are listening to the owners and operators of oil and gas without knowing that they are given some unrealistic deadlines. This could cause chaos through high inflation rate, higher oil prices, and global recession. All are committed to clean air, clean energy, and net zero decarbonation. However, 2050 is too soon to switch completely away from fossil fuels. Balanced energy is needed with a mix of oil and gas, as a situation without them will turn out to be chaotic.

Kamel Al-Harami

By Kamel Al-Harami
Independent Oil Analyst

email: naftikuwaiti@yahoo.com

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