Fossil still accounts for 80 percent of global energy mix __Eni
Sopuruchi Onwuka
Despite the global hype for energy transition, indications are rife that coal, oil and gas will continue to dominate the global energy demand in the foreseeable future even as new and greener energy forms continue in slow growth that would ultimately extend the envisaged deadlines for total switch.
In its latest statistical report concerning 2022, Italian energy behemoth, Eni, highlighted that global primary energy consumption grew at a rate of almost 1.0 percent with respect to the previous year confirming trends seen in recent decades, with fossil fuels still accounting for about 80 percent of the total energy mix.
The company however stressed the importance of diversifying energy sources to ensure security of supply and support the energy transition.
The Oracle Today reports that Eni and national government, Italy, are in the forefront of global push for energy transition, a trend which seeks secure the freedom of industrialized economies from the global oil market which they consider as channel of dependence on oil economies in Africa, South America, Middle East and Russia.
If energy transition succeeds, then facilities and equipments currently produced in Europe and North America, would now make Africa, Middle East and Russia dependent on the industrialized countries not only for gadgets and equipments that are modeled to run on batteries, but also pour back energy revenues into the waiting hands of current buyers of fossil fuels.
But timelines for energy transition has been a subject of protracted debate, with industrialized nations pushing for a quicker switch while oil dependent economies projecting long term and protracted energy mix sustained by rising demand.
Italy’s’ Eni has published the 22nd edition of its global energy statistics report, highlighting the need to broaden future prospects and pursue diversified solutions supporting a sustainable, secure, and equitable transition.
The report also shows that prices of major energy commodities were affected by the war in Ukraine across all markets, with different degrees of impact depending on the specificities of each and local dependence on Russian supplies.
Key messages from the analysis indicate that renewable installations have been growing exponentially in recent years, with solar and wind contributing just above 10 percent to the electricity mix, compared with more than 60 percent generated by fossil sources.
The Oracle today reports that electricity remains the central phenomenon in the global rave for new energy, and the quality of fuel for power generation would ultimately determine the success of any model towards resolution.
Currently the global economies are calculating the cost and efficiency of running electricity generation either by fossil fuels and new green energy technologies. And environmental impact of fossil fuels and battery technology remains a parallel debate.
Currently, natural gas remains the cheapest and most reliable power generation fuel source despite being fossil fuel. And cleaner solar, wind and hydro power generation technologies remain costly and low in capacity. This explains why the electric vehicle dream is slow in capturing the global dominance and forcing fuel fired vehicles out from the market.
The recognition of gas as cleaner alternative or transition fuel has since raised the market value of the commodity; making low carbon density a price index in the global energy market.
Thus, gas prices rose significantly with direct effects on downstream commodities, and especially electricity.
Eni reported in its 22nd edition of its global energy statistics that Europe compensated for the shortfall in pipeline imports from Russia mainly by attracting additional LNG volumes, albeit at higher prices.
“Global gas demand in 2022 fell by more than 1 percent, after a 2021 post-pandemic rebound (about 5 percent) with divergent dynamics on a global scale: a sharp slowdown in Europe, Russia, and Asia, only partially offset by growth in the United States and the Middle East,” Eni reported.
In the oil sector, Eni reported that tensions due to a decade of lower investments and the war in Ukraine brought Brent’s annual average in 2022 to 101.2 $/b, 43 percent higher than in 2021.
Global oil production increased by 4.3 Mb/d, with growth concentrated in the Gulf OPEC countries due to the unwinding of 2020 production cuts.
Against this backdrop, demand continues to increase (+2.2 Mb/d), reaching 100 Mb/d and almost completely recovering pandemic-related losses (-0.7 percent compared to 2019).
Net refining capacity returned to growth in 2022 thanks to new projects in the Middle East and China amounting to slightly under 2 Mb/d.
In the new energy sector, Eni reported, “critical minerals play a key role in some essential transition technologies.”
As a result, the company stated in the report, production for most critical minerals grew significantly, reflecting an increase in demand; with Nickel and lithium registering the largest increase (over 20 percent).
