By Ifeanyi Onuba
…Oil To Retain Highest Share In Global Energy Mix By 2045
Despite the perceived threat of energy transitioning, which is being pushed by the plan of developed countries to move from fossil fuel to more cleaner energy sources, Nigeria is set to earn more revenue from the oil and gas sector.
The additional increase in oil and gas revenue for Nigeria is based on the projection by the Organization of Petroleum Export Countries that global primary energy demand will increase by 23 per cent from the 285.7 million barrels of energy per day in 2021 to 351 million barrels of energy per day in 2045.
OPEC gave the projection in it’s 2022 World Oil Outlook Report for 2045 which was obtained by THE WHISTLER on Sunday.
The Organization in the Report explained that the driver of global energy demand would be the non-
Organisation for Economic Cooperation and Development countries. The demand is being projected to rise by almost 69 mboe/d in the period to 2045.
According to the Report, India alone is expected to account for almost 28 per cent of the rise in energy demand.
After a moderate medium-term increase, the OPEC Report added that energy demand in the OECD is set to experience a gradual decline, reaching 102.2 mboe/d in 2045, down by 3.6 mboe/d relative to 2021.
Oil demand, it stated, is anticipated to increase from 88.3 mboe/d in 2021 to 100.6 mboe/d in 2045, with its share in the energy mix dropping from almost 31 per cent to just below 29 per cent.
Despite decelerating oil demand growth, the Report noted that oil is set to retain the highest
share in the global energy mix during the entire period.
It explained that Coal is the only primary fuel that will see a demand drop within the outlook period, noting that this would experience a
decline from almost 75 mboe/d in 2021 to 58.2 mboe/d in 2045.
The Report added that strong policy headwinds and numerous commitments to phase out and phase down coal based power are the major drivers of this trend.
Despite the short-term market distortions, OPEC said in the Report that gas demand is projected to increase by almost 19 mboe/d to 2045, supported by demand in all sectors, replacing coal and traditional biomass use.
The Report reads in part, “By 2030, gas is set to overtake coal and become the second largest fuel in the energy mix.
“With strong policy support and declining long-term costs, other renewables (mostly wind and solar) are the fastest and largest growing category in the energy mix, adding almost 31 mboe/d in the outlook period.
“Nuclear power is expected to increase by more than 50 pee cent from 2021 levels,
reaching 23.3 mboe/d in 2045. Strong policy support and the rising need for low carbon base load power sources are the major drivers for this trend.
“Biomass is forecast to increase by around 8.6 mboe/d between 2021 and 2045, attributed mostly to the rising advanced use of biomass.
Energy intensity is expected to drop in all regions, thanks to increasing energy
efficiency in final usage and transformation, as well as the rising share of
“The largest improvements are expected in China and India.
Despite rising energy demand growth, per capita consumption in non-OECD
countries will remain far below the per capita energy usage in OECD countries in 2045. This is especially true for regions such as Sub-Saharan Africa and India.”
In recent years, the narrative on environmental sustainability and climate change-related policies has largely dominated the energy sector.
COP 26 in Glasgow in late 2021
resulted in agreement on the ‘Paris Rulebook’ and ‘Glasgow Climate Pact’, as well as
an agreement to phase down coal-based electricity generation.
Financial investors have increasingly shifted to focus on ESG standards, with significant knock-on consequences for capital access and capital flows in the energy sector.
In addition, several major western companies have announced strategic shifts, with a rising focus on renewables and a reduction in their exposure to oil and gas.
However, at the end of 2021 and into 2022, with issues related to adequate energy
supplies, investments and the conflict in Eastern Europe, there has been a sudden re-emergence and renewed acknowledgement of energy security and energy affordability
Consequently, this has forced market participants to reorder their priorities,
particularly in the short-term.
In Nigeria, the Nigerian National Petroleum Company Ltd is leading the drive for massive investments in critical gas infrastructure in Africa to boost the exports of the product to Europe and other continents.
The NNPC Group Chief Executive Officer, Mallam Mele Kyari had while speaking during a panel session at the ADIPEC Strategic Conference held on November 2 in Abu Dhabi, the United Arab Emirates, said the energy transitioning aspiration has changed the dynamics of the global oil and gas industry.
He said currently, the global community is faced with a stark reality of sourcing for more cleaner energy, adding that within this context, Nigeria has adopted gas as it’s transition fuel.
The NNPC Boss said the Federal Government recognized the importance of gas to the global energy mix, stating that this is why huge investments are being made in the sector.
Currently, the NNPC Boss said working with the government of Morocco, Nigeria is building a gas pipeline infrastructure.
He said, “There are very very stark realities that we are facing. Of course, it is also true that there is a huge impact of our business on climate. So, that is also real, we have the finance, we have to face the reality of today and the truth is that we do need the energy of today.
“What we are doing is to build that capacity to clean and refined capacity so that we can take care of our current needs. And transit gradually, utilize the resources of today and ultimately, use gas as a transition fuel.
“We can’t do this except we have the infrastructure. Perhaps we have one of the largest oil producing country, the largest resources, 203trn cf of gas; over 200bn barrels of oil, but we know that we have the resources that can be of help to everyone and that is why we are engaging in the West African subregion including Morocco and all the way to Europe to create a backbone infrastructure that will take gas from Nigeria all the way to eleven countries into Morocco and hopefully in Europe.
“In essence, there is so much gas available that we all need today and it is becoming more and more critical for energy industry globally.”
To harness the gas potentials, he said collaboration has become critical with all stakeholders.
NNPC To Earn More Revenue As OPEC Projects 23% Increase In Global Energy Demand is first published on The Whistler Newspaper
Source: The Whistler.