LETTERS TO THE EDITOR

Summer 2009

by Abdalla Salem El-Badri

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Sir,
The Organization of the Petroleum Exporting Countries agrees with many of the points which Andris Piebalgs makes about the nature of today’s energy mix. OPEC has long welcomed diversity in supplies and it is clear that the use of renewable energy is set to grow, albeit from a very low base. Other sources of energy – such as nuclear power – are also expected to play their part, though as history demonstrates, we should be ever alert to their associated safety risks and their intensive capital requirements. Realistically, though, fossil fuels will continue to satisfy most of the world’s energy needs for the foreseeable future.

That being the case, OPEC shares Piebalgs’ view that technology has the potential to help meet the demands of a more carbon-constrained world. Some of our member countries are currently pushing the boundaries in this respect. Algeria, in tandem with international oil companies, is at the forefront of research and development into carbon capture and storage, a pioneering technology that could significantly reduce greenhouse gas emissions from conventional fossil fuels. It is OPEC’s view that more must be done on this front, and our member countries will continue to make progress in this field.

We must also look to developed countries to take the lead in global efforts to mitigate greenhouse gas emissions, given their historical responsibility. They have comparative technological and financial advantages over other nations in this area. More action by developed countries would therefore both be equitable and in accord with the United Nations’ principles of common but differentiated responsibilities and respective capabilities, recognized at the Rio Summit and under the UN Framework Convention on Climate Change.

Piebalgs says that a case can be made for setting targets for renewable energy and providing these industries with financial support. OPEC has long been calling for clearly stated, non-discriminatory energy policy objectives from consuming nations, since these will contribute to oil market stability. However, since such policy objectives will be factored into the investment decisions of oil producing countries, we must be sure that they are transparent and realistic. We must also remain fully aware of the impact of bio fuels with regard to efficient land use, food prices and water.

Commissioner Piebalgs recognizes the advantages of diverse energy supplies. Given that oil is such an important element in this mix, excessively low oil prices are a problem. They inhibit much-needed investment in long-term oil production capacity and curtail investment in other sources of energy, including renewables. Every technology, every energy source and every project has its price. Therefore, a stable and realistic price for oil is important – one that takes into account the broader questions of long-term energy supply, demand and investment.

If we are to achieve a sustainable solution to global energy needs, one which supports continued world economic growth, it is vital to maintain transparent, open dialogue and cooperation. This will help everyone – including energy producers and consumers alike – to reach a greater level of understanding of the issues we all face.