Image: Organization of Petroleum Exporting Countries
On October 31st, 2022, the Wall Street Journal published an article titled, "OPEC Sees Booming Oil Demand Until Middle of Century." Author Will Horner discussed a recent report by the Organization of Petroleum Exporting Countries (OPEC), which calls for a $12.1 trillion investment in the oil industry by 2045. In the document, OPEC cites the economic growth and population expansion of developing countries as the driving factors behind the increased reliance on oil. Furthermore, Horner mentions a growing split between developing nations, which will increasingly rely on oil, and Western nations, which are increasingly pushing back against its use.
OPEC is not wrong in some of its assumptions. It is expected that the global population will increase by 1.6 billion by 2045, and 96% of the growth will occur in the developing world. This will require an enormous increase in energy consumption and fuel use across the world. However, why would the developed world sit back and allow other countries to make the same mistakes that they have been trying to correct over the past century?
Citizens of developed countries and their leaders should be encouraging the energy transition not just at home, but abroad as well. The developing world should be incentivized to follow suit, and take part in the change that is already occurring. By allowing struggling countries to build an infrastructure and economy based on fuel sources that will quickly become obsolete, the developed world is ensuring an inequality that will endure for lifetimes.
It's worth noting the obvious bias that is present in the OPEC report. Each member country's economy depends on the export of petroleum. On top of this, almost all member countries are a part of the developing world. They are quickly being left behind by "the West," as developed countries rapidly restructure their economies around renewables, not fossil fuels. In its own annual report, the International Energy Association, which represents many of the world's largest energy-consuming nations, predicted that demand for fossil fuels could peak around the mid-30s, with the change being accelerated by the Russian-Ukraine war. This is over a full decade before OPEC is predicting the peak. Clearly, there is an ulterior motive at play.
Maybe the IEA report is too hopeful. Maybe the OPEC report is too critical. In the end, does it matter either way? It's clear that in the near future, the developing world is going to have to advance its economies rapidly to keep up with growing populations. This will pose a massive challenge, but there's a bright side; it's been done before. Growing countries today must rely on the technologies of the future, not those of the past. The US, UK, and every other first-world country got to where they are now by looking forward, not back. Every person should be able to see the opportunity that we have before us. Change is happening as we speak. The developing world is a blank canvas. Let's help paint a picture that can last for years to come.
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