Forty years ago OPEC, the global cartel of oil producers, held disruptive power over the world’s economy. However, when it meets today in Vienna, in the media shadow of the Paris World Climate Summit, OPEC’s get-together might not quite look like the Alamo, but its members face a global movement to decarbonize that leaves them in the role of price and policy takers, rather than makers, on the global energy stage.
Few analysts, according to Bloomberg, see an early rise in global crude prices from their recent range of US$45 to $65 a barrel. Other observers are even more bearish, predicting prices to stay below $50 through most of the rest of the decade. As if to emphasize their gloom, Saudi Arabia, the largest exporter of crude in the world, dropped its price in the days just before the Paris summit.
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Both OPEC’s gloom, and the outlook for early decarbonizing of the economy, may be exaggerated, however, suggests CBC’s Paul Haavardsrud. Noting the number of oil executives who lined up with Alberta Premier Rachel Notley to show their support for a carbon tax, Haavardsrud argues that while coal’s days may indeed be numbered (Alberta has committed to eliminate coal from its energy suite; major international users like China are also backing away from the fuel), “the sun still isn’t close to setting on the world’s oil powers.”
“Yes, something is going to change,” Jamie Webster, a global oil markets consultant, told Haavardsrud, “but I don’t think you’ll see demand decrease” in the next two decades. Indeed, the International Energy Agency forecasts global oil demand, now about 95 million barrels a day, to continue rising to over 100 million barrels by 2040.
Robert Stavins, who directs Harvard University’s program in environmental economics, appeared to disagree however, telling Haavardsrud that OPEC’s members “now… recognize that climate change is real, the negatives are moving forward, there will be increasingly stringent climate policies throughout the world, and those are going to have the effect of reducing demand for their products.”
