Changing the Mix: Renewable Energy and the Continuing Need for Fossil Fuels
Calderon, Alvaro Silva, Harvard International Review
OPEC cares passionately about world energy as a whole and not just about petroleum. I Cleaner, safer, and easier energy. Energy. for development. Energy that can enrich the lives of even the world's poorest communities.
A key mandate of our Secretariat in Vienna, Austria, is to conduct research into all matters of world energy that relate to petroleum, and this also includes such topics as sustainable development, environmentalism, and world trade. This is to ensure that OPEC and its 11 Member Countries always have an up-to-the-minute understanding of the latest developments in the world energy industry., how these developments fit in with the objectives and the values of the Organization, and how they can best be articulated in an informed and constructive manner, in both oral and written form, to audiences of many different persuasions and agendas.
Our Member Countries span three continents and possess a rich blend of cultures, heritages, political institutions, economic and social systems, geophysical features, and other natural attributes. They consist of Algeria, Indonesia, the Islamic Republic of Iran, Iraq, Kuwait, the Socialist People's Libyan Arab Jamahiriya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Despite their natural and understandable differences, these countries are united by their common desire to nurture their collective interest as oil-producing, developing sovereign states. Implicit in this is their commitment to ensuring order and stability, in the international oil market, with reasonable prices, secure supply, and fair returns to investors. This is not just rhetoric.
While these objectives are enshrined in the OPEC Statute, which was adopted shortly after the Organization's establishment in 1960, they have a much more fundamental premise to them--they are sheer common sense. If OPEC wishes to shift its oil in the market in an effective and mutually beneficial manner, then, in the final analysis, it has to give the market what it wants. Here, "mutually" refers to the interests of producers and consumers. We all crave stability, fairness, consistency, and transparency. These are all qualities that lie at the heart of OPEC's stipulated and practiced objectives.
Of course, the critical words here are "give the market what it wants." In this context, other parameters emerge, including the nature of the market, time horizons, capabilities, attitudes, and regulation. In other words, what market are we talking about? Does it essentially consist of the established consumers and, increasingly, the newly industrializing states? What about the least-developed states? How do they fit into the conventional understanding of the world oil market? Time horizons introduce a further element for consideration, with the contrast between short-term and longer-term factors; this can be quite blatant in some areas. Then there are the onward march of technology, evolving political agendas, such as environmentalism, world trade and sustainable development, and the countless regulations and statutes that accompany these and other agendas. Viewed in this light, giving the market what it wants becomes a complex business, because one must first determine exactly what it is that the market wants.
But the issue extends even further than this. The special situation of oil-producing developing countries, particularly members of OPEC, accounts for the addition of three more dimensions to the notion of providing the market with what it wants: historical opportunism, Third World solidarity, and Integrity assertion. These developing countries are living out a moment in history when they are well-endowed with a commodity, crude oil that is highly prized in the modern industrialized world. However, since crude oil is a finite resource and when viewed in an historical context, the countries' period of wealth is all too brief, they must ensure that every opportunity is taken to derive the maximum benefit from their crude oil reserves while they have them so that the export revenue they earn on world markets can be used to develop their economy and improve the welfare of their citizens in a sustainable manner. …