With leading international energy players planning steep cuts in their Oil & Gas investments with an eye on their Net Zero pledges, the world faces potential ‘energy starvation’ – a scenario that could see oil prices spiking to $100 - $200 per barrel, Dr Mohammed bin Hamad al Rumhy, Minister of Energy and Minerals, has warned.
Delivering the opening remarks at a ‘Ministerial Dialogue’, jointly hosted by the Ministry and the International Energy Agency (IEA) on Thursday, Dr Al Rumhy appealed for a holistic and equitable approach to energy transition imperatives, on the one hand, and the threat of ‘energy starvation’ for the energy-deprived, on the other, if investments in fossil fuels dwindle abruptly.
The two-hour virtual session, focusing on the theme, ‘Clean Energy Transitions and Economic Resilience in the Middle East and North Africa’, also featured remarks and presentations by, among others, Dr Fatih Birol, Executive Director — IEA, and high-level officials representing Iraq, Egypt, Algeria and Oman. The keynote address was delivered by Ali Allawi, Iraq’s Deputy Prime Minister and Minister of Finance.
Earlier, Dr Al Rumhy cautioned against any “unilateral recommendations” in the pursuit of energy transition objectives. “Unilateral recommendations on how we should tackle this may not necessarily serve us well in tackling this challenge,” he said. “For example, recommending that we should no longer invest in new oil – to which a statement has been issued along these lines – I think it’s extremely dangerous! My fear is the issue of ‘energy starvation’! While we talk about energy transition, let’s not forget that there are, according to my information, nearly two billion people right now with no access to energy at all.”
Calls to address ‘energy starvation’ – first raised 10 – 15 years ago at the Riyadh-based International Energy Forum (IEF) – have largely gone unheeded, he lamented.
While acknowledging the importance of climate mitigation objectives in the form of Net Zero pledges and so on, Dr Al Rumhy stressed the importance of addressing the needs of energy-deprived populations of the world.
“We should not forget energy starvation for many of the third world countries, particularly in Africa, Asia and South America,” he said. “It’s very easy to sit in our comfort zone and talk about energy efficiency, solar and renewables, and then forget that a third of the world’s population is suffering from a lack of energy. So we need to find solutions in parallel.”
Any hasty reductions in Oil & Gas investments in the rush to achieve energy transition goal would potentially create “turbulence”, he warned. “My biggest fear is that if we abruptly stop investing in the fossil fuel industry, there will be energy starvation and the price of energy will just shoot up. Although I agree with (IEA Executive Director) Fatih that the demand for oil and gas may go down – in the short term, it could rise to a $100 or $200 per barrel scenario, which although may sound attractive today, it’s something that many of us, if not all of us, would not like to see happening in the market.”
Also taking part from Oman were Eng Salim bin Nasser al Aufi, Under-Secretary of the Ministry of Energy and Minerals; Dr Salim al Huthaili, CEO – OQ Alternative Energies; and Steve Phimister, Managing Director – Petroleum Development Oman (PDO).