One word: interdependence. In an era of globalisation, expanding international trade, instant mass communications, rapidly advancing technology and greater mobility; it is perhaps the word that most aptly fits the world in which we live.
And at the heart of all this is the global energy system, something on which the whole world depends. It is a system that is finely balanced and one where stability must be the mantra. The right decisions need to be made, as the interrelationships between economic growth, social progress, energy security and the protection of the environment become ever more fundamental. OPEC attaches great importance to this, which can be viewed in the Riyadh Declaration that concluded the Third OPEC Summit of Heads of State and Government in Saudi Arabia last November.
The Organization has long recognised the importance of adopting a multilateral approach to the producer-consumer dialogue. This includes being actively involved with the International Energy Forum Secretariat and the development of the Joint Oil Data Initiative (JODI), as well as conducting energy dialogues with the European Union, China, Russia, a number of other non-OPEC producers and the International Energy Agency.
As an industry inclusivity is paramount. We must continue to push existing and new avenues of co-operation with innovative thinking, collaboration, timely adaptation and swift action on key issues. It begs the question: what areas should we be looking at?
Whilst JODI has made much welcome headway in advancing the provision of accurate, reliable and timely data, improvements can still be made to ensure a better understanding of the market. We all know that certainty is vital. None of us want the volatility that has characterized the recent past, since it is damaging to all responsible parties.
What is important is to recognize that we are not just talking about historical data. For example, recent energy and environmental policy initiatives, involving subsidies for competing fuels and higher tax rates, tend to push towards a reduction in oil demand. We need to know exactly how these will play out given the long-lead times and major investments required. Over- or underinvestment is not conducive to a well-balanced market.
Technology is an important area too, particularly in the promotion of cleaner fossil fuel technologies. This was highlighted at the recent OPEC Summit, with four Member Countries – Saudi Arabia, Kuwait, Qatar and the UAE – announcing that they would contribute a total of $750 million towards funding research into energy, the environment and climate change.
One such technology is carbon dioxide capture and storage, which is a proven technology and has a large economic mitigation potential. What needs to be recognized, however, is that developed countries, bearing the historical responsibility, and having the technological and financial capabilities, should take the lead in the development and deployment of this technology, as well as in its transfer to developing countries.
The human resource is a further area of concern and the difficulties in finding and hiring skilled labour need to be addressed at a global level. This means concerted efforts to restore this essential capacity, by facilitating education and training in energy disciplines, and making the industry an attractive career choice.
What is clear is that we need to co-operate with each other to promote synergies and drive real change in our industry that benefits all parties. Not just as producers and consumers, National Oil Companies and International Oil Companies, but as partners working together towards the shared objective of a stable and sustainable energy future in an increasingly interdependent world.