OPEC: Oil Is Indispensable for Global Electrification

Oil and petroleum-based products are indispensable in the process of increasing electrification and expansion of power grids globally, OPEC Secretary General Haitham Al Ghais said on Monday, noting that the energy mix is not a zero-sum game.

The head of OPEC criticized claims that there would be only one winner in the drive to “electrify everything”.

“OPEC does not believe that energy sources are locked in a zero-sum game; nor can the history of energy be reduced to a succession of ‘energy replacement events,’” Al Ghais wrote in an article posted on OPEC’s website on Monday.

“Reality tells us that oil does not operate in isolation, cut off from other sectors and industries. Rather, such is the versatility of petroleum and petroleum-derived products that they play an indispensable role in a host of other sectors and industries,” the secretary general added.

Since oil is an essential part of the production and transportation of materials needed to expand power grids so that they could accommodate growing shares of renewables, the calls for a halt to investment in oil and gas are irresponsible, according to Al Ghais.

“To put it simply: calls to halt new investments in oil projects jeopardizes the production of oil products essential for the smooth functioning and expansion of the electricity grid,” OPEC’s secretary general wrote.

OPEC and its chief have recently criticized forecasts from energy pundits and from the International Energy Agency (IEA) that oil is on track for a peak in demand this decade and that renewables will rapidly replace much of the world’s need for oil.

Last month, Haitham Al Ghais said that peak oil demand is not on the horizon, and blasted the IEA’s prediction that global oil demand would peak before 2030.

“It is a dangerous commentary, especially for consumers, and will only lead to energy volatility on a potentially unprecedented scale,” he said.

By Charles Kennedy for Oilprice.com

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