At the completed 24th St. Petersburg International Economic Forum (SPIEF-2021), a lot of time was devoted to discussing the future of the world energy market. Rosneft Chief Executive Officer Igor Sechin spoke at the session “Transforming the World Energy”. In his report “World Energy at a Crossroads”, he shared his vision of the prospects for the domestic fuel and energy complex and spoke about the main risks of the industry. Alexander Frolov, Deputy Director General of the Institute of National Energy, spoke about how accurately the report of the head of the largest Russian oil company describes the state of affairs in the industry.
“If we try to describe the energy component of the forum in just two words, then they will be“ sustainability ”and“ balance ”. A kind of quintessence of these reflections was the extensive report of the head of Rosneft, Igor Sechin, made on the last day of SPIEF-2021, “Frolov said.
Frolov agrees with Sechin’s thesis that the pandemic has only exacerbated the process of regionalization of the economy, and she again raised the issue of the formation of regional centers within a multipolar world. In practice, the crisis has shown the effectiveness of various approaches to solving the problems that have arisen.
“For example, the United States has sent its oil and gas sector free to float, essentially pumping money into the stock market. This looks at least ironic if we remember that even President Obama in 2009 indicated the need to reindustrialize the United States. As a result, we observe the inflation of financial bubbles (including in the fuel and energy complex), which burst during the next crisis, ”the expert believes.
According to him, now in the United States under environmental slogans the capitalization of “green” companies is being inflated, to which the administration of the new president is extremely sympathetic. But the isolation of the capitalization indicator from the real contribution to the economy in general and to the energy sector in particular is not news, but a problem. “It was precisely defined in the report by Igor Sechin,” added Frolov.
China is quite rightly cited in Sechin’s report as a positive example of dealing with the crisis and implementing energy strategies. “This country did not inflate financial bubbles by overheating the economy with direct cash infusions, but supported the real sector. At the same time, she does not abandon modern trends in the energy sector. Moreover, China is the absolute leader in the commissioning of renewable generation capacities and in the development of electric transport. Now China intends to develop hydrogen energy as well, ”Frolov said.
China stands out for balance and moderation. For example, increasing the share of renewable energy sources (RES) is not an end in itself for the PRC. Solar and wind power plants help to solve environmental problems, but they also load the Chinese industry with orders, which has taken over the leadership in the production of equipment for renewable energy from Europe. And at the same time, China is increasing the number of nuclear and gas power plants. He also does not give up coal in power generation, carrying out a large-scale modernization program in this area, the expert said.
Frolov believes that Igor Sechin in his report rightly outlined a problem that green idealists simply dismiss, expecting that it will be resolved by itself: if, according to existing forecasts, by 2030 the demand for the most widespread lithium-ion batteries will grow by more than 7 how to process these volumes?
“Even now, only 5% of batteries are recycled. And here one more question arises: is it not worth taking into account the systems of energy storage and capacity for their recycling in the structure of costs for the creation of “green” generation? Apparently not worth it, otherwise it will suddenly be discovered that there is a colossal carbon footprint behind the wind and the sun. And it is not at all worth talking about the need for a multiple increase in the extraction of metals (including rare earths) to meet the plans for the development of renewable energy sources. By the way, an amazingly excessive share of renewable energy sources in the country’s energy balance, as a rule, leads to high tariffs for the population, ”he said.
It is noteworthy that the level of direct subsidies and other forms of state support for green energy is growing. For example, now “the European Union is beginning to actively pump state money into hydrogen energy, trying to solve not so much environmental problems as problems with the accumulation of electricity generated from renewable energy sources. At the same time, the same Western countries are moving from information defamation of oil and gas companies to direct non-economic pressure.
As an example, Frolov cited the situation with the US presidential administration, which intends to demand that American banks and international financial institutions refuse to finance coal and oil and gas projects around the world. And the Danish court demanded that Shell take increased commitments to reduce greenhouse emissions. Which, by the way, were already quite ambitious for the company.
Sechin’s report became an example of a deep, capacious and laconic analysis of not only the industry, but the entire world economy through the prism of the energy and oil industry, the well-known Russian economist, Doctor of Economics Mikhail Delyagin is convinced. “Its high quality, fundamental nature and consistency, the very possibility of which has already been forgotten by analysts who wallow in the streams of verbiage, have literally become a breath of fresh air,” he said. “Sechin was perhaps the first official to clearly record the trend of regionalization of markets, which is replacing globalism.” He very clearly recorded the global political significance of the coronavirus: “It was the pandemic and the course of the fight against it that ultimately predetermined the outcome of the US elections. In the near future, we will see its influence on the change of political elites in other countries as well ”.
Delyagin believes that the report of the head of Rosneft showed that the world economy is recovering – and in the second half of the year one can expect a shortage of oil due to a sharp increase in demand for this familiar and traditional for the world raw materials.
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