Energy transition is late, behind demand surge ___Avuru

Sopuruchi Onwuka

Eminent geologist and petroleum industry investor, Mr Austin Avuru, is not in any panic about the prevailing global indignation against the industry. Instead he is calling on investors to muster funds for investments in meeting rapidly growing demand.

Mr Avuru is a former President of Nigerian Association of Petroleum Explorationists (NAPE). He is a member of Institute of Directors (IoD). He is also eminent in the Nigerian Mining and Geosciences Society (NMGS). He is Chairman of Platform Petroleum and founding Managing Director and Chief Executive Officer of Seplat Energy Plc.

Mr Avuru who is currently the Chairman of AA Holdings, and investment company, spoke exclusively to The Oracle Today on climate change, the prevailing energy transition and their implications on emerging economies like Nigeria.

He situated global warming and consequent climate change in the overall pressure from ballooning global population on finite resources of the earth, adding that rising demand for energy and environmental impacts from industry activities form part of the cumulative human impact on the planet.

His comments came in the wake of the meeting of global leaders at the 26^th Conference of Parties (COP26) on the United Nations Framework Convention on Climate Change (UNFCCC) in Glasgow, Scotland. The meeting ended with mixed signals of rising oil prices amidst call for energy transition from fossil fuels.

The Oracle Today reports that oil had breached the $85 per barrel mark as global economies revive from COVID-19 downturn, pushing analysts to predict further surge to $100/bbl as demand indices grew stronger.

Key industrialized nations of the world who champion energy transition had also in the period of the meeting pleaded with the Organization of Petroleum Exporting Countries and its 10 key oil producing allies (OPEC+) to boost oil supplies in order to weaken market forces and pull prices.

Mr Avuru said the global mission to reduce greenhouse gas emission into the air in order to cut the rate of atmospheric temperature might achieve minimal impact if pressure on limited resources of the earth is not first reduced.

In a hearty chat with our correspondent in his high profile Ikoyi office, Mr Avuru also doused fears that the global automobile industry might leave Africa behind as manufacturers begin diversification from internal combustion vehicles.

He pointed out that development new energy options to replace finite fossil fuels was already running late because global economic planners failed to envisage the need to meet future energy requirements for a fast growing and urbanizing world population.

He pointed out that failure to address population explosion around the world has led to increased pressure on earth’s finite resources; a situation he said has impacted on the environment from all fronts and led to depletion of natural shields like carbon sinks and the ozone layer.

“You see, the world population has grown from less than 500 million from the time of Jesus Christ to about eight billion; and the size of the earth and everything that supports life has remained unchanged. Every day, more land is claimed from nature for farming, housing, roads and all that. Virgin forests are fast depleting because nearly every section of the earth has seen some form of cultivation,” he buttressed.

The Oracle Today reports the Secretary General of the Organization of Petroleum Exporting Countries, Dr Mohammed Barkindo as saying that global population would rise by 1.8 billion people by 2045 and mount additional pressure on energy demand.

Dr Barkindo said that greater proportion of the emerging world population would come from sub-Saharan Africa where, according to him, energy poverty is acute and environmental impact very severe. His pointed out that global leaders that push for energy transition from fossil fuels must recognize the right of poor nations to affordable energy.

Mr Avuru said that the race for energy transition is late and almost futile in the face of the prevailing strong demand for fossil fuel. He expressed strong doubts about the capacity of the renewable energy industry to meet immediate and future global demand.

Instead of grieving over the global rave over energy transition, Mr Avuru stated, producing nations and petroleum investors should seize the opportunity to solidify their market positions. He projected that the rising capacity from renewable energy industry would continue to fill gaps in the global energy mix as fossil fuels reach peak production and embark on natural decline.

“Whether you like it or not, fossil fuel is finite resource. So, at a point in time which is not very far; there will be a peak, and after that decline will set in. So the race to replace fossil energy is logical but it should have started long time ago.”

On the mass diversification into electric vehicles by the global automobile industry and its impact on oil demand and transportation in developing countries, Mr Avuru allayed fears of grounding the fuel based transportation in Africa and elsewhere; pointing out that the manufacturing firms which are committed net zero targets and environmental and social governance (ESG) are not accountable for emission by product consumers.

While calling for rapid establishment of local capacity for vehicle manufacturing, he predicted that the market demand would continue to mount commercial pressure on foreign automobile producers to maintain production lines for internal combustion engines.