The Secretary General who addressed a gathering to mark this year’s energy week said, “What is clear is that world energy demand is set to grow. In OPEC’s World Oil Outlook, world energy demand rises by 52 per cent over the period between 2010 and 2035.
He said that renewables, from wind, solar, small hydro and geothermal, are expected to grow at over seven per cent per year, often as a result of government support and incentives.
El-Badri said they certainly hold promise; but globally their share of the energy mix will still be less than three per cent by 2035, given their low initial base.
He said that both the share of biomass and nuclear remain at steady levels throughout the period 2010-to-2035, at around nine per cent and just below six per cent respectively.
The Secretary General said, “It is clear that fossil fuels will continue to play the dominant role in meeting demand, although their overall share will fall from 82 to 80 per cent. Throughout most of this period, oil will remain the energy source with the largest share, although its overall share declines from 33 to 27 per cent. Coal’s share remains relatively stable at around 27 per cent. The share of natural gas, however, is expected to rise from 22 to 26 per cent.
He said that focusing specifically on oil, our projections see demand increasing by around 20 million barrels a day during the period to 2035.
El-Badri said there will be a big shift in the balance between the OECD area and elsewhere, leading to a steady decline in demand in all OECD regions. It will be developing countries that drive demand, with developing Asia accounting for most of the global increase.
He said that the transportation sector will be the main source of growth, continuing a trend seen since 1980.
The Secretary General said, “And of course this will also mean significant expansion in the downstream. For example, in OPEC’s World Oil Outlook, it is expected that there will be around 20 million barrels a day of additional crude distillation capacity required in the period to 2035. The majority of this is in the Asia- Pacific and the Middle East.
He said the industry is capable of meeting the big demand increases, through its huge resource base.
El-Badri said the US Geological Survey estimates the world’s ultimately recoverable resources of crude oil and natural gas liquids at more than 3.8 trillion barrels.
He said, “There are the recent tight oil developments in North America. This is welcome news – it adds depth to global supply, aids market stability and provides further proof that the world is not running out of oil. However, questions remain over how sustainable this will be in the long term.
El-Badri said taking all this into account, it is clear that the market outlook is a favourable one for the oil industry. And it is up to all of us to ensure that this works out in practice.
He said, “What the oil market needs most of all, as it seeks to meet the rising levels of demand with the necessary investments, are order and stability. This means a clear vision of the way ahead, together with a cooperative and harmonious approach from all the leading players.
The Secretary General said this vision must be a broad one, linking market stability with other key global issues, notably sustainable development and the environment.
He said that the future path for the industry is marked with uncertainties. These can have significant impacts on investment in future capacity to meet the rising levels of demand.
El-Badri said, “When planning for the future in the oil industry, whether this is five, ten or even 20 years ahead, we need a clear idea of where the market is heading. Otherwise we may end up wasting huge amounts of capital on unused plant and equipment.”
Information from National Mirror was used in this report.