The nations of the Gulf know that the world’s shift to cleaner energy could change everything: Their economies today depend on demand for oil and gas, and their efforts to diversify could take a long time to pay off. But the speed and nature of the energy transition will have economic, political and, of course, environmental consequences. For the special Gulf issue of Bloomberg Markets, we asked energy executives, analysts and activists to map out what they see coming. Their responses have been edited for clarity and length.
How will the transition from fossil fuels change the world?
Tania Ortiz Mena
President of Sempra Infrastructure, which owns and operates natural gas and electric infrastructure
We need to remind ourselves that the energy transition is happening at different paces in the different regions of the world. We all need to keep focused on the developing world: That’s where over 80% of the world population is. We need to focus on the opportunity to help decarbonize those economies. At the same time, it’s an opportunity to help those economies grow.
Sheikh Nawaf Al-Sabah
CEO of Kuwait Petroleum Corp.
We recognize that there is a climate crisis in the world and that we all have to do something about it. We recognize also that the world needs to continue to grow economically, from a population perspective and socially. And these things need to happen at the same time. Throughout the energy transition, hydrocarbons will remain a focus or a central part of the energy mix. There’s simply not enough alternative energy sources available to meet demand growth.
Chief executive officer of RaĂzen SA, Brazil’s top producer of ethanol
It will mean a big shift in the balance of power. It will bring places that are not traditionally powerful and make them more important. Power will be scattered, not so concentrated.
Meg O’Neill
CEO of Woodside Energy Group Ltd., an Australian exploration and production company
While the world goes through this transition, we recognize that there are certain things that we are good at. For example, the trade of energy between places like Australia and North America to parts of the world that are not as blessed with natural resources.
North Asia is probably the most obvious example that we think will continue to be important. There are parts of the world that will be able to deploy renewables at scale—Australia and the US are two great examples—but there are other nations that will need continued trade to meet their energy needs.
Ryan Lance
CEO of ConocoPhillips
It’s coming. What people are realizing is it’s just going to be a lot longer, it’s going to be really hard and it’s going to be very expensive. My concern: The ideal way is to put a price on carbon so everybody sees it transparently and the demand side can react to it and the market can equilibrate. And that’s not going to happen because it’s too politically charged. The problem is what’s happening on the regulatory side of the business. It’s not transparent. The consumer’s not going to see it until they see triple the electricity price in their bill for the month.
John Larsen
Partner at Rhodium Group LLC, which provides independent research and policy analysis on China, energy and the environment
If we end up in a world where temperature changes 2.5C or 2 degrees instead of 4 or 5 degrees because of the energy transition, then that is going to be a much more stable climate, more stable geopolitics, less human suffering and less disruptions from an extremely hot planet. I mean a century out—this is long term. That requires a transition that is relatively fast in human history and comprehensive. So it’s not just cleaning up electric power generation but also really getting down to fairly low levels of greenhouse gas emissions and having whole new industries in place, like a whole industry around carbon dioxide removal. It is not a given that that’s the way the globe is going right now. Technology and development and policy action have put the world on a much better path than it was on even 10 to 20 years ago, but a lot more needs to happen.
Amanda Leland
Executive director of the Environmental Defense Fund
It means less pollution; it means healthier kids. I think it means more reliable energy, cheaper energy, more access to energy. It also has benefits for jobs and economic opportunities for people all over the world. Energy is the lifeline to a stable, safe, modern economy. If you think about the US, it really has leapt forward in the race to invest in clean vehicles as one part of that energy transition. In the US, manufacturers have invested $188 billion, which will help create almost 200,000 jobs, in clean vehicles and clean transportation. There’s a manufacturing boom that’s taking off in places like Michigan and Kentucky and Nevada. This is happening all over the world with clean vehicles and Ârenewable energy, including solar and wind. I don’t want to gloss over the fact that this is very difficult. It’s going to be a long journey. There’s going to be a lot of problems to solve along the way. But with vision and leadership and hard work and real, practical problem-Âsolving, there’s reason to be optimistic here.
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