A fo­cus on the fu­ture of en­ergy

The Pak Banker - - Front Page - Mo­hamed Al Asoomi

THE Emi­rates Cen­tre for Strate­gic Stud­ies and Re­search re­cently held its 18th an­nual En­ergy Con­fer­ence, which fo­cused on en­ergy a term that bears a lot of mean­ings and de­ter­mines the fu­ture of the world at a time when it sparks un­end­ing de­bate over its cur­rent and fu­ture prospects.

Dur­ing the con­fer­ence, a speaker high­lighted the sweep­ing changes wit­nessed by the world in be­gin­ning of the last cen­tury, when he won­dered what the new world sys­tem means, re­ply­ing that it means po­lit­i­cal power and gen­er­al­i­sa­tion of en­ergy sources.

There­fore, the con­fer­ence ad­dressed sev­eral topics, es­pe­cially the role of tech­nol­ogy in the global en­ergy sys­tem and the im­pact of tech­no­log­i­cal devel­op­ment on the en­ergy in­dus­try. The im­pact of tech­nol­ogy on the fu­ture of the en­ergy in­dus­try was ex­am­ined from two main as­pects, the first of which is tech­nol­ogy's con­tri­bu­tion to find­ing alternative to fos­sil en­ergy source, which would be a tremen­dous break­through in the global econ­omy.

The sec­ond as­pect is re­lated to the role of tech­nol­ogy in in­creas­ing the re­serves of tra­di­tional en­ergy sources by ex­trac­tion of oil, gas and coal in larger quan­ti­ties, which is a cru­cial is­sue to pro­duc­ing coun­tries.

This year, there are many is­sues that con­cern oil and gas pro­duc­ing and con­sum­ing coun­tries. Th­ese is­sues are very im­por­tant to the GCC coun­tries and the fu­ture of their economies, es­pe­cially af­ter the re­cent re­lease of con­flict­ing re­ports about the oil in­dus­try in the Gulf.

Start­ing with the Gulf, most West­ern and GCC ex­perts have agreed not to drop oil prices be­low $80 (Dh293.60) per bar­rel, and that the era of cheap oil is gone for good, for sev­eral rea­sons.

First, some coun­tries have, in re­cent years, devel­oped their oil out­put from deep wa­ters, where the cost is es­ti­mated at $75 per bar­rel, as the price fall be­low this level means halt­ing pro­duc­tion in th­ese fields, which pro­vide the global mar­ket with sig­nif­i­cant oil quan­ti­ties. Hence, halt­ing pro­duc­tion in th­ese fields will re­sult in a short­age of oil sup­plies and con­se­quently high prices again. This clearly means that oil ex­port­ing coun­tries have only three decades to make the most of their enor­mous oil rev­enues to di­ver­sify in­come sources and pre­pare for the post- oil era.

Sec­ond, th­ese con­clu­sions are con­cern­ing the promis­ing oil pro­duc­tion in the United States, where pre­vi­ous re­ports show that it would achieve self-re­liance by 2020. How­ever, th­ese re­ports are ex­ag­ger­ated as stated by Amer­i­can ex­perts who at­tended the con­fer­ence

The fact, the United States will achieve a ma­jor progress in oil and gas pro­duc­tion over the next seven years by pro­duc­ing nat­u­ral gas from shale rock, which has been pro­duced in large quan­ti­ties in re­cent years, thus lead­ing to a drop in gas prices to record lev­els. This will bring about a qual­i­ta­tive shift that will en­able the United States to re­duce its re­liance on im­ported oil.

The US im­ported 13 mil­lion bar­rels per day over the past five years, com­pared to its pro­duc­tion of 7 mil­lion bar­rels a day, since its daily con­sump­tion was 20 mil­lion bar­rels a day in 2005.

In 2020, US oil pro­duc­tion will reach 11 mil­lion bar­rels per day and will im­port seven mil­lion bar­rels, a re­verse im­age of what the pic­ture would be in 2020 com­pared to 2005. Yet, it will not be a self re­liant on oil and will not turn into an ex­porter.

Apart from ma­jor oil ex­porters at present, such as the GCC and Opec coun­tries and Rus­sia, other promis­ing coun­tries like Brazil, Aus­tralia and some African coun­tries are ex­pected to join the club of oil coun­tries. On the level of con­sump­tion, the world oil map will shift to­wards Asia-which its in­de­pen­dence on im­ported oil is in­creas­ing con­sid­er­ably, es­pe­cially from the Gulf re­gion. In brief, many im­por­tant topics and is­sues re­lated to en­ergy were high­lighted by re­searchers from var­i­ous coun­tries around the world through pre­sen­ta­tions and work pa­pers.

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