Energy executives warn it will be a long and costly road, while activists and analysts say there are significant benefits and little time to lose.
Article content
(Bloomberg Markets) — Gulf states know that the global shift to cleaner energy could change everything: Their economies now depend on demand for oil and gas, and their diversification efforts could take a long time to pay off. But the speed and nature of the energy transition will have economic, political and of course ecological consequences. For the special Gulf edition of Bloomberg Markets, we asked energy managers, analysts and activists to outline what they expect. Your responses have been edited for clarity and length.
Advertising 2
Article content
How will the transition away from fossil fuels change the world?
Article content
Tania Ortiz MenaPresident of Sempra Infrastructure, which owns and operates natural gas and electricity infrastructure
We must remember that the energy transition is progressing at different speeds in different regions of the world. We must all continue to focus on developing countries: over 80% of the world’s population lives there. We need to focus on the opportunity to help decarbonize these economies. At the same time, it is an opportunity to support the growth of these economies.
Sheikh Nawaf Al-SabahCEO of Kuwait Petroleum Corp.
We are aware that there is a climate crisis in the world and that we all need to do something about it. We also recognize that the world must continue to grow economically, population-wise and socially. And these things have to happen at the same time. Hydrocarbons will remain a focus or a central component of the energy mix throughout the energy transition. There are simply not enough alternative energy sources available to meet the growth in demand.
Ricardo MussaChief Executive Officer of Raízen SA, Brazil’s largest ethanol producer
Top stories
Article content
Advertising 3
Article content
It will mean a major shift in the balance of power. It will bring out places that are not traditionally strong and give them more meaning. Power will be scattered and not as concentrated.
Meg O’NeillCEO of Woodside Energy Group Ltd., an Australian exploration and production company
As the world goes through this transition, we realize that there are certain things we are good at. For example, energy trading between places like Australia and North America to parts of the world that are not as blessed with natural resources.
North Asia is probably the most obvious example, which we believe will continue to be important. There are parts of the world that will be able to deploy renewable energy on a large scale – Australia and the US are two great examples – but there are also other nations that will need continued trade to meet their energy needs.
Ryan LanceCEO of ConocoPhillips
It’s coming. What people are realizing is that it’s just going to take a lot longer, it’s going to be really difficult and it’s going to be really expensive. My concern: The ideal way is to set a price for CO2 so that everyone sees it transparently and the demand side can react to it and the market can balance itself. And that won’t happen because it’s too politically charged. The problem lies in what is happening on the regulatory side of the business. It’s not transparent. The consumer will only see it when he sees three times the price of electricity in his monthly bill.
Advertising 4
Article content
John LarsenPartner at Rhodium Group LLC, which provides independent research and policy analysis on China, energy and the environment
If we end up in a world where the temperature changes by 2.5°C or 2 degrees instead of 4 or 5 degrees because of the energy transition, then that will be a much more stable climate, more stable geopolitics, less human suffering and less disruption due to the environment being an extremely hot planet. I mean a century later – that’s long term. This requires a relatively rapid and comprehensive transition in human history. So it’s not just about cleaning up electricity generation, but also about bringing greenhouse gas emissions to relatively low levels and establishing completely new industries, such as an entire industry around carbon dioxide removal. It is not a given that the world is currently developing this way. Technology, development and policies have put the world on a much better path than it was 10 to 20 years ago, but much more still needs to happen.
Amanda Leland, Executive Director, Environmental Defense Fund
It means less pollution; it means healthier children. I think it means more reliable energy, cheaper energy and better access to energy. It also brings benefits in terms of jobs and economic opportunities for people around the world. Energy is the lifeline of a stable, secure and modern economy. If you think about the US, they have really leapt forward in the race to invest in clean vehicles as part of the energy transition. In the U.S., manufacturers have invested $188 billion in clean vehicles and transportation, which will help create nearly 200,000 jobs. A manufacturing boom is underway in places like Michigan, Kentucky and Nevada. This is happening around the world with clean vehicles and renewable energy, including solar and wind energy. I don’t want to hide the fact that this is very difficult. It will be a long journey. There will be a lot of problems to solve along the way. But with vision and leadership, hard work and real, practical problem solving, there is reason to be optimistic here.
Article content