Haitham al-Ghais, Secretary-General of OPEC, delivers a speech at the Global Energy Show in Calgary on Tuesday.Jeff McIntosh/The Canadian Press
There is no oil demand peak on the horizon, the head of the Organization of Petroleum Exporting Countries says, taking aim at a “flip-flop” in policy from the International Energy Agency, which he says has undercut crucial investments in the oil and gas sector.
Haitham al-Ghais, the secretary-general of OPEC, said Tuesday at the Global Energy Show in Calgary that the group projects global oil demand will surpass 120 million barrels a day by 2050.
“In our long-term projections, we see the forecast that global primary energy demand is going to increase by a staggering 24 per cent from now to 2050,” he said.
“Our forecasts are not based on ideology. They are based on data and analysis of data, and they clearly indicate that oil would remain an integral part of the energy mix at around 30 per cent still in 2050,” he said.
Meeting that ever-rising demand will only be possible with adequate, timely and necessary investments in the oil industry, he said.
But comments by the IEA have threatened those investments, he said.
“OPEC has been very concerned by the IEA’s flip-flop on the critical issue of industry investments,” he said.
Mr. al-Ghais specifically pointed to IEA reports between 2017 and 2020, which projected that oil would remain a cornerstone of global energy security. But in 2021, the agency changed its tune, saying there should be no investments in new oil and gas projects. Now the IEA has again stressed the importance of oil industry investment, he said.
Mr. al-Ghais also addressed the issue of climate, saying OPEC recognizes the importance of investing in technologies such as carbon capture and storage to battle greenhouse gas emissions.
Member countries have all signed the Paris Agreement, he noted, and recognize the importance of investing in green sources of energy, “because energy sources are not locked in a zero-sum competition.”
Rather, Mr. al-Ghais said, “all forms of energy will be needed to meet future demand and growth.”
Plastics made from oil will be needed for the synthetic resins and polymers used for the blades of wind turbines, for example, as well as solar panels and electric vehicles, he said.
While he pushed for developed countries to support other economies through funding climate finance technology, he added that “there is no one-size-fits-all solution to addressing the climate matters.”
“We welcome the recent moves towards policies grounded and pragmatic energy realities, and that recognize that we face an emissions challenge and not an energy sources challenge.”
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The veteran Kuwaiti oil executive was invited to the conference by Alberta Premier Danielle Smith. Dialogue between OPEC and Alberta dates back to 1989, Mr. al-Ghais said, adding that the group is committed to continue discussions with producers around the world, including Canada.
“We are acutely conscious of the important role that other major producers around the world, including Alberta, play in the international oil market and in the industry,” he said.
“International orientation is important, given the rapidly evolving global energy landscape.”
OPEC+, which pumps about half of the world’s oil and includes OPEC members and allies such as Russia, has put forward plans for an increase of 411,000 barrels a day for July as it looks to wrestle back market share and punish overproducers. It is set to unwind production cuts for the fourth straight month.
Mr. al-Ghais’s comments come in the wake of forecasts by research firms and the U.S. Energy Information Administration that oil demand growth and crude prices will fall by the end of the year.
Growth in global oil demand for the rest of the year is expected to fall to one of its weakest levels since 2001, says research firm S&P Global, which this week revised its price outlook for benchmark West Texas Intermediate crude down to as low as the upper-US$40 mark.
The United States is expected to bear the brunt of the effects from an oversupplied market, because U.S. shale production is more responsive to price shifts compared with other sources of non-OPEC supply, such as Canada, Guyana and Brazil.
Editor’s note: A previous version of this article incorrectly quoted Haitham al-Ghais, the secretary-general of OPEC, as saying that global primary energy demand is projected to increase by 44 per cent from now to 2050. Demand is projected to increase by 24 per cent.