What future does oil still have?

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Abu Dhabi, It's an unbelievable number: According to Arab Minister of State Sultan Ahmed Al Jaber, it will take you ten trillion dollars over the next few years – not to invest in renewables, but in oil and gas projects. The CEO of Abu Dhabi National Oil Company (Adnoc) estimates that so much is needed to keep oil production at its current level.

“The population is growing. And in order to cope with the rising thirst for energy, the world will not be able to manage without oil and gas as the main source of energy in the future, “said Al Jaber at the opening of the World Energy Conference in Abu Dhabi on Monday. Clear statements from the Minister of State of the United Arab Emirates, one of the largest oil exporters in the world.

It is the first time that the largest and most important energy summit in the world takes place in an Arab country. The new hosts set the tone right at the beginning: there will be no end to the fossil energy sources so fast.

Only every three years do the governors from the energy industry, science and politics come together at the World Energy Conference. But rarely were the issues more pressing than now. Because the industry is in the middle of one of the biggest disruptions in its history: the change from a fossil to a regenerative world – at least it seems so.

While Europe is discussing carbon taxes, coal emissions and wind power, global energy supply is still firmly in the hands of fossil giants such as Saudi Aramco, Exxon Mobil or Shell. Four-fifths of the world's demand is still being met by coal, oil and gas, despite more and more wind and solar power plants.

Since 1980, the world has burned a trillion barrels of oil. And contrary to the long-standing fear of the world's oil reserves are not running out, but today are almost three times as high as then. New production techniques and the shale oil boom in the US make it possible. “We are in the middle of the golden age of fossil fuels and not even a tiny reduction in the concentration of CO2 in the atmosphere,” says Dieter Helm, economist and founder of the energy market consulting firm Aurora Energy Research in an interview with Handelsblatt.

In 2018, CO2 emissions increased by 1.7 percent year-on-year to 33 billion tonnes. After a decline between 2014 and 2016, this will once again indicate an accelerated increase in global CO2 emissions. At the same time, coal-fired power is increasing again.

“China not only builds in its own country, but also finances hundreds of coal-fired power plants in the rest of the world,” says the Oxford professor. There could be no question of a turning point in the energy world.

No good prospects

In fact, the World Energy Council (WEC) paints a bleak picture just in time for the start of the conference in Abu Dhabi. Three scenarios have been created by the merger of energy companies and government officials from around the world – and no one is able to meet the two-degree target by 2040. “Even though we initially assumed that in Germany, there is no blueprint for the energy transition – every technology and every energy source is needed,” says Uwe Franke, President of the World Energy Council in Germany. In order to achieve the climate goals, international cooperation on the political level must improve significantly, he warns.

“There is a lot of promise, but we do not see that these promises will be fulfilled,” says Leonhard Birnbaum, COO of the German energy company Eon and also a member of the World Energy Council. “Whether we create the global energy transition, decides not in Europe,” he says to the results of the new WEC study.

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For while the coal miners can not go off the grid fast enough here, China and India are continuing to explode the dirty fuel with all their vigor. Last year, coal consumption rose again for the first time even after three years.

In the long term, experts assume that there will be less coal in the energy mix. “The majority of investments are still in oil and gas, not renewables,” says energy expert Helm. “If we continue as before, that is very disturbing,” warns the Briton. “We live in a world of China first, Russia first, US first and Brazil first,” he criticized the spread of protectionism.

The US, China and India are the focus of global climate efforts. No one uses as much CO2 as these three countries. Ten billion tons of CO2 were blown up by coal-fired power plants from all over the world last year – 85 percent of them are in the USA, China and India.

The average age of the existing kilns is 12 years, but the International Energy Agency (IEA) estimates that they will last 30 to 50 years. The CO2 slings will therefore heat up the earth for many more decades. Overall, 70 percent of the increase in energy consumption is attributable to coal and natural gas.

At the World Energy Conference in Abu Dhabi, however, the international community paints a very different picture. Hardly any stand, no matter if from a Chinese, Arab or American company comes without striking references to the “green energy future”. Even the world's largest oil company Saudi Aramco wants to score with a window that not only looks fashionable, but can also generate solar energy at the same time.

Asked about the future of energy for Saudi Arabia, Minister Abdulaziz Bin Salman Al Saud, freshly appointed last Sunday, skipped the mark. “We are reducing our emissions, we are reducing our methane emissions, and we are building renewables,” said the Saudi prince on Monday, referring in particular to the expansion of new nuclear power plants in his own country.

Rethinking? None

Nuclear energy is also counted as renewable energy in Arab states. “We have already taken an important step. After all, it is no longer oil minister, but Minister of Energy, “notes bin Salman.

A week before the UN climate change conference in New York, a rethinking of the global community on energy matters seems even more than ever. “This change is about changing the world's infrastructure and that of the entire economy. It's not like upgrading your phone, “said John Philip Browne, former head of oil giant BP and current chairman of the Letter One Energy investment fund. “The energy mix will change, but that takes time. The change is progressing slowly, “he is sure.

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At the same time, investments in renewable energies are falling worldwide. Last year, $ 272.9 billion was invested in solar, wind, biomass, hydropower or geothermal capacity. That was 12 percent less than in 2017, according to the latest report “Global Trends in Renewable Energy Investment” by the United Nations, the Federal Ministry for the Environment and the Bloomberg New Energy Finance think tank. According to the authors, development is mainly due to a U-turn in China.

After a strong expansion of the green electricity, the country has recently reduced investment significantly. With $ 88.5 billion, Beijing is still one of the largest single investors in renewables, accounting for one third of global spending in 2018.

Another reason for the decline in global investment, however, is that the price of solar energy has fallen significantly. Since 2009, costs have dropped by 80 percent. With regard to the globally installed capacity of renewable energies, the overall trend is therefore upward. Within a decade, it quadrupled to 1,650 gigawatts.

“We can cope with climate change,” economist Helm is convinced. “But only with an international CO2 tax, a massive reduction in our CO2 consumption and investment in research,” he explains. If everyone continues as before, then the world will continue to warm up and sustainably damage our standard of living, Helm is convinced.

More: The world's largest solar power plant is in the Middle East. Upgrading the company's own carbon footprint can be good for Abu Dhabi.

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