Full Title: Having It Both Ways: GCC Oil Faces Peak Demand
Author(s): Antoine Halff, Robin Mills
Publisher(s): Columbia Center for Global Energy Policy
Publication Date: December 15, 2021
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Description (excerpt):
This paper, part of the work by Columbia University’s Center on Global Energy Policy on oil and gas and the energy transition, examines two broad actions being taken by petrostates to remain relevant in a decarbonizing world: demand defense and demand creation.
Demand defense involves many tactics, including price and volume policies that drive out high-cost competitors and ensure maximal use of the generally lower-cost oil reserves held by GCC states. These states can, for example, encourage the development and deployment of technologies such as carbon capture, utilization, and storage that may make continued use of fossil fuels during the transition more palatable. They can also adopt oil and gas production techniques that generate a smaller carbon footprint, such as curbing gas flaring and venting practices to reduce methane emissions, and electrifying offshore installations. In addition, they can attempt to support demand by investing in improved vehicle fossil fuel efficiency to cut the environmental impacts and the cost of travel.
In addition, GCC countries can look to create new demand for their oil and gas reserves, tapping into new or growing businesses and regions. Petrochemicals for products with anticipated demand growth such as plastics and other non-metallic materials is an area of intense focus. Investing in new energy creation, such as hydrogen production, is also being considered through pilot projects. And while most oil producers have a keen interest in capturing existing high oil demand in China and India, others are looking to emerging economies, mostly in Africa and parts of South Asia, which still face energy poverty. With the right infrastructure investments, these regions could create substantial new demand as fossil fuels substitute for unsustainably harvested biomass, which can result in better—if not zero-carbon-ideal—health, environmental, and climate impacts.