Oil and gas less monopolized than renewables, affordable CO2 capture technology exists - COP29 speakers

MOSCOW. Nov 15 (Interfax) - Fossil fuels, particularly oil and gas, have a number of advantages over renewable sources of energy, the head of strategy, innovation and sustainable development at Russian oil company Gazprom Neft, Denis Demin said at the United Nations COP29 climate change conference.

Opinion on clean energy is now shifting toward accessibility in terms of technology and price, and this is closer to the reality in the world, where almost a billion people experience energy poverty, he said.

Countries are now foremost trying to ensure energy security, Demin said. The United States, for example, has been ramping up production of oil and gas in recent years and has already become a major exporter of crude, oil products and liquefied natural gas (LNG).

China, meanwhile, has become the dominant producer of renewable energy and manufacturer of everything related to it, thereby solving the problem of reducing its own energy dependence and developing large technology markets.

The European Union consistently fought its dependence on oil and gas imports from Russia, but the result has been mixed, as its dependence on Russian hydrocarbons has decreased but its dependence on U.S. LNG has grown, Demin said. Furthermore, in the area of renewable energy, the EU has acknowledged its dependence on China, which makes about 90% of Europe's solar panels.

Demin also said that about 1 million wind turbine blades that are now turning in the world will have to be literally buried in the next 20 years. "Of course, the industry is working on ways to recycle, but mass technologies have not been invented here so far. The situation with solar panels is about the same," he said.

"Renewable energy is a young industry, it has not yet travelled the road of forming a complete value cycle," Demin said.

Meanwhile, "oil, and next to it gas, actually, is one of the least centralized, least monopolized energy sources in terms of supply - the oil market is the most liquid commodity market in the world," he said.

"More than half of the oil produced in the world is sold on international markets and costs about the same in different corners of the world. The U.S., which is the largest producer of oil, has about 20%, which is negligible compared to, for example, China's share on the electric vehicle market, or, even more so, in production of lithium or solar panels," Demin said, adding that internal combustion engine technology is also widely available.

Furthermore, oil dominates in the transport sector, despite the rapid growth of electric vehicles, and for the most part there are no alternatives to it in marine and air transport, he said.

Demin also said that the oil industry tries to minimize environmental impact along the whole chain from exploration to filling station using, among other things, the latest technologies, such as biotech, unmanned aviation systems and artificial intelligence.

"Renewable energy sources make it possible to not increase global emissions, rather than reduce. The necessary solution for reducing emissions is CO2 capture and storage technology, which no one but the oil and gas industry can do, because this is our competency and we're already doing this," Demin said.

"But financial incentives are needed here, because the international market of voluntary emissions that currently exists and prices are insufficient for humanity to be able to fully utilize this technology," he said.

Demin also said that, despite the fact that extracting oil and gas is becoming more complex throughout the world and this requires heavy investment in technology, prices for them in 2024 are about the same as they were 20 years ago, factoring in inflation. This is the chief merit of the oil industry, providing the world with affordable energy despite the increasingly complex process of extracting resources, he said.

The IR director at Russian gas producer Novatek, Alexander Nazarov recalled forecasts for the growth of the global population and its energy consumption and remarked that humanity has never before in its history refused to use a single type of energy resource. "There was the coal era, but now we consume more coal than in the coal era. We burn more firewood than in the middle ages, simply because there are far more of us," he said.

Nazarov also agreed that various countries are now choosing their energy balance based on energy security, meaning the availability of energy resources at home, within the country. The need to ensure energy security is pushing countries to make decisions to build generating capacity based on the most accessible rather the cleanest types of energy resources. Furthermore, artificial barriers are being imposed between countries, he said.

The price of oil and gas has been about the same in oil equivalent terms for the past two years (at about $70-$80 per barrel) while coal costs about $25 per barrel, so its consumption is growing, he added.

"And one should not forget that renewable energy sources can also be finite. One of the risks of climate change, for example, is the availability of hydropower generation. It has been falling in recent years, and in countries where its share of consumption is high," Nazarov said.