Analysis by Energy Workforce President Tim Tarpley
OPEC Secretary General Haitham Al Ghais spoke at a Nigerian oil and gas conference on Tuesday, highlighting in his remarks that global demand for all forms of energy is forecast to rise by 23% through 2045. Al Ghais brought up this projection in the context of a larger discussion on calls to limit or stop funding new oil projects as being unrealistic and unwise.
At the same time, he spoke about the need to tackle fossil fuel emissions, including developing and deploying emissions reducing technology and processes such as carbon capture and sequestration.
This tremendous worldwide increase in energy demand is coming at a time of significant disruption in the world’s energy trade system. The Russian invasion of Ukraine continues to disrupt the world oil and gas markets. Western sanctions imposed on Russia haven’t stopped its fossil fuel exports, but they have made them a lot less lucrative for Russia. Russia’s finance ministry said last week that fossil fuel revenues were €34.1 billion in the first half of this year — a 47% drop compared with the same period last year. That’s despite crude exports hitting a postwar high in April of an average of 8.3 million barrels a day, according to IEA. Russian gas exports to the EU have also decreased to about a fifth of their pre-war level due to sanctions, a general change in posture from Europeans towards Russian gas, as well as the destruction of the Nord Stream pipeline.
Other major geopolitical risks remain on the horizon as well. Over the past week or two Iran has continuously harassed — and in some cases attempted to board and detain — oil tankers in the Persian Gulf region, and Russian aircraft have repeatedly challenged U.S. aircraft operating within Syria. These incidents should serve as a reminder that other flashpoints around the world could flare up at any point and further destabilize and challenge the world energy markets.
Permitting Reform Still Alive on the Hill, Senate Likely Next Move
Over the weekend, Senate Majority Leader Chuck Schumer (D-NY) sent a Dear Colleague letter to his caucus highlighting upcoming legislative action he sees in the coming months. On the topic of potential bipartisan legislation, he mentioned permitting reform being at the top of that list. This is good news, especially in the context of reports of continued discussions between Senate Energy leaders Sen. Joe Manchin (D-WV) and Sen. John Barrasso (D-WY) about a legislative path forward. The two have even scheduled the first in a series of planned hearings next week. Should future action occur before the end of this Congress, we expect the next move to start in the Senate, so these are all good signs that momentum is still there on the issue.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.