OPEC said on Tuesday that the oil phase-out was a “fantasy” as the Saudi-led cartel predicted demand would continue to rise until at least 2050, a key year in the fight against climate change.
The oil cartel’s forecast contrasts with an estimate by the Paris-based International Energy Agency, which sees demand for fossil fuels peaking this decade as the world turns to renewable energy and electric cars.
In the group’s annual World Oil Outlook (WOO) report, OPEC Secretary-General Haitham Al Ghais said oil and natural gas make up more than half of the energy mix today “and are expected to do the same in 2050.”
“What the Outlook highlights is that the fantasy of phasing out oil and gas has little to do with reality,” Ghais said in the report’s foreword.
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“A realistic view of demand growth expectations requires adequate investment in oil and gas, today, tomorrow and for many decades to come,” he added.
Demand for oil alone is expected to reach 120.1 million barrels per day (bpd) by 2050, up 17.5 percent from 102.2 million bpd in 2023, the report said.
OPEC also raised its forecast for 2045 to 118.9 million bpd, compared with 116 million bpd at last year’s WOO, which did not consider 2050.
“There is no peak oil demand on the horizon,” Ghais said.
At last year’s COP28 UN climate summit — hosted by the OPEC member United Arab Emirates — nations agreed on the goal of “fossil fuel transition” to achieve net zero emissions by 2050.
The landmark deal also called for tripling global renewable energy capacity by 2030.
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The agreement was reached after the Organization of the Petroleum Exporting Countries urged its members to drop language that it “targets” fossil fuels, after an earlier draft included the words “phase-out”.
“While energy policy ambitions remain high, the outlook expects greater scrutiny and pushback on some overly ambitious policy goals, from both policymakers and the public,” OPEC said in Tuesday’s report.
“It is clear that energy security remains a primary concern,” the report said.
The report said the increase in demand is due to the growing global population and rising demand from India and other non-OECD countries.
Among sectors, the largest demand will come from petrochemicals, road transport and aviation.
The WOO emphasized that “all energy sources” must be expanded, “with the exception of coal.”
Renewable energy is booming
While OPEC opposes phasing out fossil fuels, its report noted that demand for renewable energy, mainly solar and wind, will grow at the fastest rate, quintupling between 2023 and 2050.
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However, oil is expected to retain the largest share of the energy mix at 29.3 percent in 2050 compared with 30.9 percent last year, WOO said.
Natural gas will overtake coal for second place, accounting for 24 percent of the mix by mid-century, up slightly from 2023.
The share of renewables will increase from 3.2 percent last year to 14 percent in 2050.
The report, however, said petrol-powered vehicles “are expected to continue to dominate road transport”.
OPEC’s numbers contrast with the IEA, which advises its member states — mainly Western democracies — on energy policy.
IOC executive director Fatih Birol told AFP last week that oil demand was slowing.
He credited the growth of electric cars and a weakening Chinese economy as contributing to the slowdown in oil demand.
“The transition to clean energy is moving fast and faster than many people realize,” Birol said.
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But he warned that “without moving away from fossil fuels, you will never reach” the landmark Paris agreement goal of limiting warming to 1.5 degrees Celsius above pre-industrial levels.
Source: AFP