Countries discuss ending the use of oil, but still depend on it

With the climate crisis, the end of the use of oil is at the center of discussions as never before, but ending the world’s dependence on this commodity will require colossal efforts.

“In 2021, several events clearly demonstrated that this industry has no future,” said Romain Ioualalen, from the NGO Oil Change International.

A few months ago, the IEA (International Energy Agency) published a report, advocating the immediate end of any new investment in fossil fuels. It was a shift in orientation by an institution founded in the middle of the oil crisis of the 1970s with the objective of guaranteeing energy security for rich countries.

Another highlight this year was the COP26 climate summit in Glasgow, Scotland, in which a coalition of countries (not including major oil producers) pledged to move away from fossil fuels.

Representing 80% of the energy currently consumed, fossil fuels were identified at COP26 as responsible for climate change.

“Dependency”

“It’s been known for several years that the end of oil is near,” said Moez Ajmi of firm EY. “But is the world ready to live without oil? Dependence is still very strong, from my point of view,” he added.

The IEA also considers that world demand for oil will continue to recover until it reaches pre-Covid-19 levels next year, around 100 million barrels a day.

In addition, the price of oil has rebounded in recent months, and oil-producing countries hope to continue benefiting from this revenue.

“The speeches about a sector that will remain in the past and that all new investments in oil and gas will end are wrong”, declared the secretary general of OPEC (Organization of Petroleum Exporting Countries), Mohammed Barkindo.

“The transition will happen. I am convinced of that, because there is real awareness, but it will take time,” said Patrick Pouyanné, president of French oil giant TotalEnergies.

For him, current discussions are focused on the end of the oil supply before a revolution in the forms of consumption. Demand for fossil fuels “is going to decline because consumers will get new things like electric vehicles,” Pouyanné said.

In the first half of 2021, electric cars accounted for 7% of global car sales, according to BloombergNEF. A very minority portion, but with strong dynamism.

“The arguments of the oil companies and the large producing countries are short-term and cynical: they look for all possible means to justify a course that is not durable,” lamented Romain Ioualalen.

Whatever the horizon for the end of oil, the big companies in the sector are preparing, whether they like it or not, under increasing pressure. Once reluctant, American oil companies ExxonMobil and Chevron announced this year, for example, investments in the energy transition.

“2022 has the potential to be a true year of transformation,” predicted Tom Ellacott of consultancy Wood Mackenzie.

According to him, “staying on the sidelines of decarbonization is not an option.”

On the new year’s agenda, experts say, there is more investment in wind or solar energy, as well as in carbon capture technologies, or hydrogen.