Eric Watkins
Oil Diplomacy Editor
The Organization of Petroleum Exporting Countries forecasts continued growth in global oil demand over the next 20 years, while acknowledging the potential impact of environmental policies on the energy market.
"Over the period 2009-30, consumption in developing countries increases by more than 22 million b/d. Of the total global oil demand growth in the long term, 75% is in developing Asia," OPEC said in its 2010 World Oil Outlook.
OPEC noted that by 2015, demand is expected to reach 91 million b/d, a slight rise over the 90.2 million b/d predicted in last year's report due to better than expected recovery from the global economic crisis.
However, while recovery from the crisis has been faster than previously expected, OPEC's report still said precrisis demand levels from 2007 were unlikely to be repeated again until 2011. By 2030, OPEC predicted that demand will reach 105.5 million b/d.
Developing countries will be responsible for most of the increased demand over the medium and long term, OPEC said. "OECD oil demand falls slightly over the medium term," a point "also reflected in long-term projections," the report said.
OPEC Sec.-Gen. Abdalla Salem El-Badri expressed confidence that the organization would be in a position to meet the projected growth curve, saying that "there are clearly enough resources to meet future demand."
In connection with output, El Badri expressed considerable confidence, saying, "Practically, we don't see any effect on the supply side before 2014." The 12-member group claims to hold 80% of the world's crude oil reserves or about 1.06 trillion bbl.
Climate change concernsHowever, the report did note that concerns over climate change and resulting environmental targets presented oil producers with new challenges.
"Legislation in some form or other is very likely to move ahead, with knock-on impacts for oil demand, probably oil supply and almost certainly (for) refining," OPEC said, underlining the need for due caution on the part of producers.
The organization warned that the potential of such legislation "to reduce demand growth and further increase competition for product markets sends a clear signal that project developers will need to remain cautious about any investment decisions."
In a word, the report was sounding an alert to consumers by openly advising its members to be wary of investing in their industry given competition from non-OPEC suppliers or other forms of energy than oil.
And, sounding an uncommon political note, OPEC said less-developed countries should not have to bear the burden of their more developed partners' century-old pollution.
Despite the growth in demand taking place largely in Asia over the coming 20 years, OPEC noted that Annex I countries (Europe, North America, Japan, Australia, and New Zealand) will still account for 64% of all carbon dioxide emissions since 1900.
"This underscores the need to fully reflect the historical responsibility in reaching an agreed outcome in the current climate-change negotiations," OPEC said, as it called on more developed nations to make the largest contribution towards fighting climate change given "their technological and financial capabilities."
Even as the OPEC report concluded that the proportion of fossil fuels in the global energy mix would gradually decrease slightly over the next 20 years, it still insisted that by 2030 fossil fuels—oil in particular—will remain the most important form of energy for world consumption.
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