Simpatico Views About Net Zero On WPC Ministerial Roundtable

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Premier Danielle Smith speaking during a ministerial roundtable.

Three high-ranking representatives from major oil and gas producing jurisdictions expressed similar views about matters related to net-zero emissions on a ministerial roundtable at the 2023 World Petroleum Congress in Calgary.

These similar views include: the potential of countries from different parts of the world achieving this target by 2050 and why; how to cover the high cost of energy transition in richer, Northern countries and the developing countries of the South; and the dangers of an unbalanced global energy transition.

On Tuesday, Amrita Sen, founder and research director of London-based consultancy Energy Aspects, moderated a ministerial roundtable including Mohammed Oun, Libya’s minister of oil and gas, Tutuka Ariadji, director general of oil and gas at Indonesia’s Ministry of Energy and Mineral Resources, and Alberta Premier Danielle Smith.

Net-zero by 2050?

“Is net-zero achievable by 2050, the answer is yes and no,” said Smith. “Yes, for jurisdictions like Alberta, and Canada, and the other [developed] energy consumers that I mentioned in my opening speech that consume 50 per cent of all of our energy.”

“Then there are 2.2 billion people on the planet with no energy at all,” she said. “I was speaking with the delegation from Nigeria, which is 200 million people, and the challenge of energy poverty for 98 million of their population, almost half their country ... I’m not going to sit in judgment of any country that wants to have the same quality of life as we do ... So, yes for us, but we must be more patient with those nations that have [addressing] energy poverty as their principal goal.”

“There’s no way we can make zero emissions by 2050,” Oun said on behalf of Libyans, and Africans more generally. “If many people in Africa have no electricity today, how can we prevent them from cheaper fossil fuel consumption rather than expensive clean energy systems?”

Sen, the moderator, provided her own personal perspective on the energy transition versus energy transition dilemma. “Energy transition, when we in the West talk about it, is a very privileged concept,” she said. “Sitting in North America it is easy to talk about reducing greenhouse emissions when we don’t really face the energy poverty issue. I grew up in India, so I can talk about this firsthand. When I was growing up energy wasn’t a game. And India today still has over 50 per cent of the world’s population without guaranteed electricity.”

“So, in terms of making energy transition, and achieving net zero, inclusivity is extremely important,” Sen said. “And you have to think about it from a very global point of view, not just sitting from a Western point of view.”

It’s the cost

“The true cost of transition, I think the reality is it’s not going to be cheap,” Sen said. “How are we going to fund it?”

The answer to that multitrillion-dollar question, according to the three representatives on the roundtable, includes financial support and technological transfers from North to South, and their individual jurisdictions continuing to develop and sell their oil and gas resources to provide the revenue needed to support their energy transition efforts.

And the financial support and technological transfers include “the opportunity of Article 6 [from the 2015 Paris Climate Agreement]”, says Smith. “So we can assist those nations that have a longer pathway to decarbonize ... I think our job in the wealthier nations is to get to net zero aspiration by 2050 so that technology can be exported so we can assist in accelerating the transformation while the innovations solve the joint problem of carbon neutrality as well as energy poverty.”

Speaking in terms of energy transition efforts in both Northern and Southern countries, Smith said: “Time is on our side. That’s why I think if we have a realistic timeframe, keeping in mind what natural capital turnover is — we have to spend the money anyways, technology advances anyways — it doesn’t necessarily mean that a better, greener solution is going to be more costly.”

“We have to tap all our resources because the international community will not be able to finance all the clean energy projects all over the world,” said Oun. “So it has to be from income that comes from general resources [of a country] too ... In Libya, we have no other immediate resource to produce other than oil and gas. We need to be allowed to produce.”

Dangers of a lack of balance

And the three representatives on the roundtable, along with Sen, all agreed that the global energy system needs all forms of energy, including decarbonized fossil fuels, to provide price stability, reliability and energy security —especially given the potential for unforeseen environmental and political events.

“We are in real danger of getting boxed into a particular paradigm that has been pushed upon us by the most extreme voices in the environmental movement,” said Smith. “If the only solution is wind and solar and battery and everything else is not green enough, then we can see the danger of what happens when that occurs.”

“The Russian invasion of Ukraine changed everything,” she said. “It stopped the supply chains. It also increased the cost of energy and created a lot of instability. When you are energy insecure — you can’t get electricity for your home or heating for your home or fuel for transport — that raises societal instability. And that’s not something any of us want to see. And so, I think that we got an unfortunate reality check because of the disruption of [Russian] natural gas flows. The consequence of that is Germany is now switching back to coal-fired electricity because wind isn’t working.”

“It’s obvious the whole world is still in need of fossil fuels,” Oun said in a similar vein. “Oil consumption this year will be above 104 million barrels a day. There’s no other immediate alternatives.”

“So there has to be a kind of marriage between all forms of fossil fuels and other forms of energy and making it cleaner and cleaner for a sustainable future,” said Sen.

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