In the recent World Energy Congress in Abu Dhabi, there were mixed messages. Climate change was as important as ever. There was not a single dissident message. The aims were closer, but the pathways were ambiguous.
One of the underlying themes was the future of hydrocarbons and especially oil. The geopolitical implications of oil demand weakness, in the long run, was disturbing for the oil-producing countries. Renewables and natural gas were the resources for the future. Hydrogen has the potential to be the common energy carrier for lots of new applications.
Digitalization is the future as it was 20 years ago with a pitch on artificial intelligence and new market models. As the ether of the modern industrial world, digitalization powered by the sensors and software with processors is doomed to change the energy landscape forever.
The customer will be empowered by all the digital tools, distributed generation, solar panels, and electric cars. The future is bright, and the rise of the “new” customer is unstoppable.
So what is wrong?
For one thing, there is an optimist world view and a world we live in. Coal consumption today is higher than 20-30 years ago, emissions are increasing despite cheap panels and Tesla revolutions. Yellowjackets were on the street to protest environmental tax regulations. Meanwhile, the EU may impose minimum tax levels for energy commodities, and consumers are expected to welcome these new regulations with joy.
And there are deep currents. They are harder to see, but the flow and the tensions are there. Low oil prices and the implications are a big question for the oil producers. The sustainability of the shale revolution is a much less important one.
The perpetual regulation machines of the energy world are under investigation. What kind of regulation, in which more participants than ever have discussed complexity and cutting the red tape. The regulation ecole may have reached its limits, and a contraction may be indispensable.
But the harder question was the main question. The theme of the conference was “Energy for Prosperity.” A prosperous world in climate constrained environment with ever-increasing taxes and regulation is questionable for the consumers. Everyone wants to save the planet, but the burden to achieve the aim is an orphan.
Energy transition will not be cheap. Climate change efforts may never be enough. Regulations may not slow down. So who will tell the consumers those bad news? A Mary Poppins song may give a hint: “a spoonful of sugar helps the medicine go down”... So what is the sugar?
From a realist point of view, there is no sugar or at least a sugar that the whole world can reach easily. The aim is precise, but the road ahead may be the hardest of all. A global pilgrimage to a cleaner energy world may not be secure, cheap, or straight forward.
The voyage has started. The concerns are not about the targets but the social, economic, and structural changes waiting for us. There will be losers and winners. Unfortunately, the anxiety for being a possible loser may stress the players more than before. They may end up with the wrong moves.
But all these concerns are minute compared to our aim to leave our children a better world. It is not unreachable, but we need to do more.