OPEC : Cleaner oil for a cleaner future

Cleaner oil for a cleaner future

OPEC Bulletin Commentary May-June 2007

The first half of this year has seen the issue of climate change rise higher than ever in the public consciousness in many parts of the world.

Indeed, government pronouncements have been reflecting this heightened level of concern. For example, in the space of just one week, as May slid into June, Australia, China and the United States each made high-level, albeit varied, statements of national policy about this issue, in the build-up to the G-8 summit in Germany, where it featured prominently.

During that same week, environmental protection was a prominent topic of discussion at the European Union-OPEC Joint Roundtable on Energy Policies, in Brussels on May 30. Both sides repeated views expressed at previous meetings of the EU-OPEC Energy Dialogue, that cleaner fossil fuel technologies should be promoted, especially carbon capture and storage, with its huge potential to limit greenhouse gas emissions.

With environmental protection being one of the three pillars of sustainable development, the roundtable recognized that access by the poor to modern energy services would help the achievement of the Millennium Development Goals (MDGs) and the eradication of poverty, which, as was stated at the World Summit in Johannesburg in 2002, is the greatest challenge facing the world today.

China, in unveiling its first national plan on climate change at the beginning of June, touched upon an aspect of the issue which has been at the forefront of discussions for many years, epitomised by the ‘Earth Summit’ in Rio de Janeiro in 1992 and the ‘Johannesburg Plan of Implementation’ ten years later — namely the trade-off for developing countries between tackling climate change and promoting economic development.

This comes right to the heart of the three pillars, the third of which is social progress. Together, they constitute a set of fundamental challenges that affect not just individual countries, but also the future of mankind generally.

However, in a world full of inequities and inequalities, quite clearly the most vulnerable communities are the most impoverished ones. And they will perpetuate their suffering and perhaps take it to even harsher extremes, if they cannot develop their economies and their societies in a sound and sustainable manner — and in a way which reflects the true spirit of Johannesburg.

With regard to the provision of modern energy services, as we stated at the 15th session of the United Nations Commission on Sustainable Development in New York in early May, OPEC welcomes any diversification in the energy mix, which can contribute to the achievement of the MDGs.

Indeed, we believe that the introduction of new fuels could be a good development. However, with energy demand expected to grow by more than 50 per cent by 2030, this will not be sufficient to play a dominant role in meeting world energy needs. Furthermore, some of these fuels also have downsides, with the production of biofuels in some areas, for example, competing for the land, water and food which are also necessary for sustainable development.

In short, there is no escaping the fact that most of the increase in world energy demand will be met by fossil fuels. Therefore, as was acknowledged in Brussels on May 30, if we are to tackle climate change with the sense of urgency that is being called for in many quarters, it is important to continue to promote the development and deployment of cleaner fossil fuel technologies.

With today’s technology, crude oil provides the most accessible, useable and affordable energy source for many countries seeking to develop and modernise their economies. Fuels derived from petroleum have become increasingly cleaner over the years, and OPEC’s Member Countries, which collectively possess about four-fifths of the world’s proven crude oil reserves, have been heavily involved in this achievement. This is hardly surprising, since OPEC is represented at all the major international fora on climate change and sustainable development, and has a clear understanding of what is required for the future healthy advancement of the oil industry.

Clearly, there is no perceived magic solution on the horizon to the tripartite challenges implicit in the three pillars of sustainable development. Realism, pragmatism, judicious prioritisation and making the most of the world’s existing proven resources are some important qualities required to ensure that countries the world over have access to modern energy services in a timely, sufficient and environmentally harmonious manner.

The world cannot wait for new energy sources to be developed in large-scale commercial quantities. Development of new types of energy is, of course, an imperative. But, in commercial terms, the consensus view is one of decades, rather than years. Consumers need to receive their energy in the meantime, and every effort is being made by the oil industry — and by OPEC Member Countries — to ensure that they will receive this energy with environmental credentials that are as sound as existing, available technology will allow.

This Commentary is taken from the May-June 2007 edition of the OPEC Bulletin, which can be downloaded free of charge in PDF format from the OPEC website.

OPEC Bulletin (May-June 2007)

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