As the global oil and gas industry continues to experience rapid transformation, energy partnerships could have a “halo effect on political and diplomatic areas” across the world, according to Dr Fatih Birol, Executive Director of the International Energy Agency (IEA).
Addressing the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2020 Virtual Conference – the world’s largest online gathering of energy industry leaders – Birol outlined the challenges faced by the industry before charting the evolving global energy map.
“In terms of global energy demand, we expect to see a decline this year of about 5%. To put this into context, this year’s decline is 7 times larger than the decline following the 2008/9 financial crisis,” Birol told a session dedicated to the geopolitics of the oil and gas industry,”
However, he said the IEA has identified increasing investment in clean energy technologies, which is on track to reach $40 billion this year and is changing the face of geopolitics in the energy sector.
“The one that is critical for me is carbon capture, utilisation and storage, which provides a very good bridge between energy realities and climate imperatives,” said Birol.
“I have watched the transformation of the global energy map and how new supply and demand patterns affect statecraft and calls for cleaner energy present both opportunities and challenges.”
He said the recent growth of US oil and gas production has “materially transformed energy geopolitics in multiple ways,” pointing out oil production in the United States has risen more than 240% since 2007 and the country’s entry into the LNG export market is producing global partnership opportunities.
“I believe energy partnerships can have a halo effect on other political and diplomatic areas,” Birol said. “With respect to US natural gas production, in 2016 when the US started exporting LNG in earnest, it was the 15th biggest exporter in the world, three years later in 2019 the US was the third largest LNG exporter. These new energy markets are a positive development that can improve geopolitical stability and promote a more prosperous world.”
