• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 32 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 8 hours How Far Have We Really Gotten With Alternative Energy
  • 1 day The United States produced more crude oil than any nation, at any time.
  • 16 hours China deletes leaked stats showing plunging birth rate for 2023
  • 2 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 7 days Bad news for e-cars keeps coming
U.S. Shale Mergers Could Bring Steadier Oil Prices

U.S. Shale Mergers Could Bring Steadier Oil Prices

Analysts suggest that the merger…

OPEC’s Trillion-Dollar Bet Against U.S. Shale

OPEC’s Trillion-Dollar Bet Against U.S. Shale

OPEC's strategy to defend market…

Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

More Info

Premium Content

Developing Nations Look to Balance Oil and Gas Opportunity with Climate Concerns

  • The International Energy Agency (IEA) recommends leaving new oil discoveries in the ground to achieve global climate aims.
  • African and Caribbean nations face pressure to choose between economic development and climate action.
  • Developing countries need support from high-income countries in the form of financing for renewable energy development.
Oil, Gas

As the world focuses on transitioning to green, there are big questions about whether new oil and gas resources should be developed. On the one hand, new oil regions present the opportunity to develop lower-carbon oil and gas through less damaging operations. On the other, the International Energy Agency (IEA) and environmental organisations say it is vital to transition away from fossil fuels to green alternatives and leave any new oil in the ground, to achieve global climate aims. However, many recent oil discoveries have been made in low-income countries across Africa and the Caribbean, offering them the opportunity to develop their natural resources for significant revenues, which is difficult for many to turn down. 

For decades, the Western World has been exploiting fossil fuel resources to provide power worldwide and bring in high revenues. This has led regions such as China, the U.S., and the European Union to be some of the world’s biggest polluters. High levels of greenhouse gas emissions produced from fossil fuel production and industrialisation have contributed to climate change, an issue that the governments of many high-income states are attempting to tackle through decarbonisation and a green transition. However, a global green transition will require support from governments around the globe, from both rich and poor nations. 

To combat climate change, the IEA recommends that oil and gas producers decrease their production and leave any new oil discoveries in the ground. However, there is still not enough renewable energy capacity to make the switch, meaning that the global demand for fossil fuels remains high. In addition, many oil discoveries in recent years have been made in Africa and the Caribbean. These regions are looking increasingly attractive to producers looking to develop “low-carbon” oil operations and move away from existing depleted oil fields. Oil and gas majors insist that developing these regions would help decrease the carbon emissions associated with oil and gas production, as well as help low-income countries improve their economies. 

The World Bank estimates that the African continent held around 40 percent of the natural gas discoveries from 2010 and 2020. Many countries have increased their reliance on the region following the Russian invasion of Ukraine and subsequent sanctions on Russian energy, as they seek out alternative gas supplies. However, environmentalists worry that developing new oil and gas regions could quash efforts to tackle climate change. To ensure there is enough energy to replace the demand for gas, significantly more investment must go into developing the world’s renewable energy and nuclear power capacity. In addition, high-income countries must provide financing for developing countries to establish their renewable energy industries and allow them to turn down the opportunity to earn high oil and gas revenues. 

Nevertheless, turning down money is a difficult pill to swallow, particularly as many African and Caribbean powers view the Western World as highly hypocritical. The African Energy Chamber believes that “At a time when both African and Caribbean nations are making great strides towards developing recently discovered oil and gas reserves, countries whose development was driven by hydrocarbons are accelerating efforts to transition to a renewable energy future. This transition has seen wealthy nations establish a ‘green agenda,’ one which does not take into consideration Africa’s economic needs.” 

Macky Sall, the President of Senegal – a country which discovered a deposit of 15 trillion cubic feet of gas in 2015 – explained, “How can you tell people in Africa, where half the population does not have electricity … ‘Leave your resources in the ground’?” He added, “There is no sense in that, and it is not fair. We need an energy transition that is fair.”

Meanwhile, Mohamed Irfaan Ali, the President of Guyana, a massive new oil power, stated, “Did you know that Guyana has a forest that is the size of England and Scotland combined… a forest that stores 19.5 gigatons of carbon, that we have kept alive? “I’m going to lecture you on climate change. We have kept this forest alive that you enjoy, that the world enjoys, that you don’t pay us for, that you don’t value,” in response to calls to leave its oil in the ground. 

Further, many believe that Africa’s fossil fuel problem stems from the decades-long involvement of foreign oil majors who have exploited the region’s resources. Vanessa Nakate, a Unicef goodwill ambassador, says “Oil and gas giants have sold African leaders big promises that gas is the key to development. But this week’s analysis by energy experts at the IEA makes those seem even more dubious. It predicts that beyond 2025 there could be too much natural gas in the global energy system, causing a “gas glut”.” Nakate calls for greater investment in Africa’s renewable energy sector, which would give leaders across the region a reason to leave their fossil fuel resources undeveloped. 

By Felicity Bradstock for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on May 04 2024 said:
    Developing countries should ignore the IEA recommendations totally and focus on developing whatever oil and gas reserves they have.

    Their first priority is to eliminate energy povertly as is the case in Africa and develop their oil and gas reserves in order to deal with economic problems including better health care and education and help their economies to grow.

    And since they are very low emitters because of less industrialisation, the demands of their economies should take precedence over climate jchange goals.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • Carlos Everett on May 18 2024 said:
    Felicity, it was very nice , very green article, but what you are asking is impossible. The $ is always going to be the deciding factor, as these people are the poorest in the world. The only way this can work, is if renewable energy becomes much cheaper than its alternative, natural gas or oil.

    I will give you a real life example. I worked for the 3rd largest oil company in the world for 35 years. In my fifties, we had a 5000 square foot home in Houston, with no trees in the yard to block the sun . I tried once in 2006 and another time in 2014, and i had 3 companies come and provide me estimates to convert the house to solar. Again we lived in Houston, with plenty of sun year around. Both years, these companies wanted anywhere from $70,000 to $110,000 of cash for me to invest, and that included the federal kickback reduction on taxes. I did the calculations, it would have taken me 25 years to pay this project out and there was no way that i could afford to convert. I would read the Wall Street journal and several times a year, i would read several articles saying the same thing about others who tried to convert to solar, but could not afford it. Many people have tried but what the Government is asking is impossible and to ask a poor country to do this is very insulting to them.

    Now you are asking the poorest countries in the world, to develop Solar or wind power when neither is cost efficient, because they are not avaliable in the night or only 12 hours a day.

    Financially, this does not work, so your articles are filled with lies and not examining the real world and the IEA comments are not filled with any solid economics behind them. By the way if you look at Greenhouse gas emissions, the USA was one of the only counties in the world in the last two years to decrease gas emissions, so you need to cite real world facts in your article.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News