THE world is running toward a future of new energy that seems to hold promise for both producers and consumers, but insufficient investments, unstable geopolitical factors and the cost of applying new technology to daily life add uncertainties to the prospect.

Embracing new energy realism

U.S. Secretary of Energy Rick Perry, as he spoke to those attending CERAWeek held by IHS Markit on March 5-9, said the United States and the world are now witnessing a new trend: new energy realism.

He said that new energy realism rests on the fact that America is amid an incredible energy revolution.

“This dramatic process is a decisive break from the 1970s, when America followed a flawed policy,” he said.

According to Perry, the United States has moved from an era of perceived energy scarcity to one of unprecedented energy abundance. “That abundance is the result of technology and innovation,” he said.

In an interview with Xinhua during CERAWeek, Secretary General of the International Energy Forum (IEF) Sun Xiansheng said the United States used to be a major importer of oil, but that status has dramatically shifted ever since a sharp increase in American shale oil production in recent years has resulted in the reduction of oil imported from the Middle East.

“U.S. shale production plays an important role in keeping market balance,” Sun said, adding that the world consumption center has shifted from the West to the East.

Sun believes the new trend is having a significant impact on global economic development and is providing a chance for both the United States and China to cooperate more closely on matters of energy.

The International Energy Agency (IEA) released an energy outlook at CERAWeek that indicated that China and India are leading the oil demand, driven by their robust economic growth.

Global uncertainty remains

The uncertainty mainly lies in the question of whether there will be investments flowing into the oil industry sufficient enough to deflect the possibility of bottlenecking in the supply chain as demand continues to grow.

Fatih Birol, executive director of the IEA, on more than one occasion told attendees of CERAWeek that investments need to be made or there could be a bottleneck in the supply of crude oil within three years.

Investment into the industry had two consecutive years of declines of 25 percent or more — once from 2014 to 2015 and again 2015 to 2016. Since that time, investments have risen, but certainly not to the level before 2014.

According to Birol, the world loses 3 million barrels a day because of the decline of aging oil fields.

Mohammad Senusi Barkindo, secretary general of the Organization of Petroleum Exporting Countries (OPEC), agreed with Birol on the assessment that investments must be made.

“We have seen sharp contraction in investment, especially long-cycle projects both onshore and offshore,” Barkindo said, adding that “2018 [is] not looking very positive at the moment.”

The OPEC secretary general raised a call to arms for the industry.

“The global industry needs to focus on this imagined threat, because we are sowing the seeds for a possible or believed future energy crisis. That is not in the interest of this global economy,” he said.

Crude oil prices are also sensitive to geopolitical factors.

With growing energy demand, world engines need to import more energy from other countries and regions and must face the challenge of geopolitical complications and uncertainties.

Renewables on the track

Today, fossil fuels are about 81 percent of the fuel mix in the world. Leading industry organizations believe that number will decrease, but to what level is unknown.

Most industry leaders agree that the pollution problem associated with fossil fuels is caused by the generation of power. Many power plants have transitioned from the use of coal to natural gas, which is much cleaner.

For instance, China is converting its power generation from coal-fueled plants to gas-fueled plants.

Furthermore, renewables are beginning to have more of an impact in the fuel mix and appear to will have a growing role in the years to come.

The emergence of renewable energy is a positive global trend, but more time is needed to develop technology and management in this field, Sun said.

“Personally, I believe renewable and clean energy is a positive trend in the future. The only question is how fast it will grow. If every country work together and make more efforts, the day may come quicker,” Sun said.

According to Sun, over the last two to three years, the cost of renewable energy has decreased significantly thanks to technological development. However, there remain huge costs challenges in this field.

China is leading the way in promoting renewables and electric vehicles (EVs).

Executive vice president of the State Grid Corporation of China (SGCC) Wang Min said at CERAWeek that SGCC has built the world’s largest Internet of Vehicles (IoV) network in terms of coverage and number of devices, connecting 17 charging facility operators and providing access to about 170,000 charging docks.

Besides using cutting-edge technologies, such as big data and cloud computing, the SGCC has also achieved universal plug-in and payment methods for most charging stations nationwide. EV owners can use a mobile phone app to locate nearby charging docks.

The quick charging facilities have been built by the SGCC to cover 150 cities across China and along a 31,000-kilometer stretch of highways.

The five-day CERAWeek, which ended Friday in the United States, is an annual energy meeting held by the London-based information company IHS Markit featuring prominent speakers from the energy, technology and financial sectors.

This year’s meeting was attended by more than 3,000 guests from over 50 countries and regions.

(Xinhua)