After agreeing with Russia and other OPEC+ member nations to maintain ongoing supply cuts through the end of the year, OPEC officials upped its medium and long-term global crude oil demand projections as part of the group’s annual forecast for 2023. The head of the cartel also warned that ongoing efforts to subsidize a faltering energy transition away from fossil fuels to renewables into existence threaten to deprive the global oil industry of the investments necessary to maintain energy security.
“Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos,” OPEC Secretary General Haitham Al Ghais writes in the report’s forward. Ghais added to his written remarks during the event in Riyadh launching the group’s 2023 World Oil Outlook, saying, “Over the past year what is clear is that we have seen populations voice concerns about the costs and actual benefits of net zero targets. There are some who unfortunately continue to push the extremely risky narrative of dismissing oil with talk of oil demand dropping by almost 25 million barrels a day by the year 2030.”
This was a clear reference to a recent report from the International Energy Agency (IEA), in which its analysts predicted the world would achieve long-predicted peak oil demand later in this current decade. It is a finding that stands at odds with projections by OPEC and other credible studies, leading many to believe that the IEA’s finding is motivated more by wishful thinking and politics than sober statistical analysis. (RELATED: CHRISTOPHER BARNARD: The GOP Can Win By Embracing Climate Solutions, Rejecting Climate Hysteria)
In stark contrast to the IEA’s finding, the OPEC study finds global demand for crude oil expanding by 23% through the year 2045, when demand will stand at 116 million barrels of oil per day. This 2045 number represents an increase of 6 million bopd above the projection in OPEC’s 2022 World Oil Outlook. Obviously, meeting that growth in demand will require high levels of new investments in finding and developing reserves around the world, and the report pegs that number at $14 trillion in additional investments by 2045, up from $12.1 trillion projected in 2022.
In his forward, Ghais advocates for an ‘all of the above’ approach to energy supply. “At OPEC, we believe that the future needs to see energy transition pathways that strive for an inclusive ‘all-peoples, all-fuels and all-technologies’ approach,” he writes. “We need to follow sustainable paths that enable economic growth, enhance social mobility, boost energy access, and reduce emissions at the same time.”
Then, the Secretary General adds this: “Calls to stop investments in new oil projects are misguided and could lead to energy and economic chaos. History is replete with numerous examples of turmoil that should serve as a warning for what occurs when policymakers fail to acknowledge energy’s interwoven complexities.” (RELATED: DAVID BLACKMON: How The Biden Regulatory Agenda Could Make A Looming Crisis Much, Much Worse)
One such example of turmoil that should serve as a warning for policymakers to respect the need to maintain energy security is taking place now in real time, caused by the brutal, inhuman Hamas terrorist attacks on Israel. With its pledge to remain steadfast in support of Israel, the United States is now effectively involved in two simultaneous wars on two continents, rendering the Biden administration’s decision to drain the country’s Strategic Petroleum Reserve to levels not seen in 40 years for purely political purposes in the lead-up to the 2022 mid-term elections now even more starkly irresponsible.
History shows us clearly that, in every war fought since the advent of the oil economy more than 120 years ago, energy security was the key factor. The winning side has always maintained ample supplies of petroleum and keep its supply lines open to power its military. You can’t run tanks with wind turbines or solar panels.
It is a harsh lesson the Biden administration seems to have lost sight of, and one OPEC is smartly urging the rest of the global community to keep in mind as it strives to achieve climate-related goals.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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