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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

developing countries.

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