OPEC bulletin 8–9/17
Typical in terms of future uncertainty is an evaluation
of the range of long-term energy scenarios. According
to current International Energy Agency (IEA) estimates,
the production volume variation of different primary
energy resources in 2040 with respect to its baseline
scenario (‘New Policy’) exceeds 30, 40 and even (for
coal) 75 per cent. The variation of evaluations for the
respective volumes of end-use energy demand is mainly
in the range of 20 to 40 per cent. Variations in baseline
scenarios offered by other leading analytical centres and
companies are also considerable: there is a twofold, or
sometimes even greater difference, in the estimated
future annual growth rates of primary energy resource
We live in interesting times. On the one hand, we
enjoy unprecedented transparency in markets, compa-
nies, access to information, technological breakthroughs
and pure energy technologies. On the other, we can
observe destructive trends of artificial, unilateral barriers
aimed at the non-competitive promotion of products, the
intimidation of partners, the concentration of technolo-
gies that leads to technological inequality in the world,
as well as the politically motivated limitations in terms
of infrastructure development and financing.
Together we need to define what kind of energy we
would like to see in the future: a foundation for the devel-
opment of humankind or a political tool?
In the era of the Fourth Industrial Revolution and the
‘age of electricity’, the energy source itself is not that
important. What is more critical is the following:
Its ‘on demand’ availability;
The competitiveness of its price; and
Clear and generally accepted consumer qualities.
In view of these considerations, I would like to focus
on several important aspects affecting energy markets:
1. Evolution of the fuel balance;
2. Technological progress; and
3. Rules being shaped for trade, financing and tech-
nological exchange on the energy markets.
World fuel balance
The future balance of hydrocarbons is currently one of the
most significant issues, as evidenced by its discussion at
the St Petersburg International Economic Forum in June.
The general consensus is that the world’s demand for
energy will grow, though the structure and geography of
this demand will change significantly. Growth rates are
most likely to decline, largely owing to technological pro-
gress and increased energy efficiency.
There will be a deep reformof themarket’s geographi-
cal structure, with the expected stagnation or reduction in
energy consumption in OECD countries, while the centre
of consumption growth will shift to the Asia, Middle East
and Africa (AMEA) region, where consumption is expected
to rise by a factor of at least 1.5.
The demand growth for hydrocarbons may reach up
to 20 per cent in the case of oil and even more in the gas
segment by 2035. However, the gross share of hydrocar-
bons in the energy balance will trend lower. Sustained
growth in the world’s GDP will be accompanied by the
continuous expansion of automobilization and electri-
fication in developing countries (primarily, India, Indo-
China and African countries). The use of petrochemical
products will expand in all spheres of modern life — cur-
rently they are used to manufacture nine out of ten of the
objects that surround us.
The global economy has created an infrastructure
focused on the consumption of hydrocarbons over the
past 100 years — trillions of dollars and a huge number
of man-hours spent in countless territories and lands.
Many millions of people have been engaged in support-
ing this industry and maintaining the infrastructure; its
evolution and development continues today. This not
only concerns automobiles, petrol stations and the sec-
tors servicing them, but also related machine building,
marketing and maintenance, etc.
Any infrastructure reform, with any significant change
in the fuel and energy balance, would take at least 25–30
years. Thus, the artificial speeding-up of decarbonization
without proper calculationsmay devalue the investments
made and seriously hit the competitive ability of many
The climate agenda and renewable
Renewable energy will, in any case, be the fastest growing
source of energy. The share of renewables and nuclear
energy will increase in the world energy balance from
15 to 23 per cent by 2035, and the share of renewables
(excluding hydro power) in power generation will grow
from seven to 20 per cent within 20 years.
The growth of renewables in the energy balance is
actively influenced by the UN Climate Agenda aimed at