Tuesday 11 May 2021
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Petroleum and Politics: Side by Side

No cartel has ever been in the midst of us yet legally as the Organization of Petroleum Exporting Countries (OPEC) cartel. These are the guys that manipulate the supply and price of petroleum, evident from the 1973 oil embargo which sent world oil prices soaring to record levels. The oil embargo, masterminded by then Iranian Petroleum and Natural Resources Minister Zaki Yamani quadrupled the price of crude oil and caused economic shockwaves worldwide.
Yet, when one thinks of green energy as an alternative to petroleum, a quote that comes to mind is “The Stone Age did not end for lack of stone, and the Oil Age will end before the world runs out of Oil”. One would assume this intriguing prediction came from a green activist group but to the contrary, it came from Zaki Yamani himself. This titan of petroleum must, at one point, realized that something has shifted after the first 1973 shock wave and advances in technology are beginning to offer a way for economies to diversify their supplies for energy and reduce their demand for petroleum.
This shift towards greener energy is highly influenced by the growing attention afforded to climate change, seeing more and more countries taking the climate change call seriously and without compromise. Namibia for example, who was a participant at the recently held United Nations Climate Change Conference (COP21) in Paris (30 November to 12 December 2015) understands the country’s vulnerability to climate change and recognizes the need to prioritize climate change issues and intergrade them into sectorial policies.
One of the strategies identified is encouraging the notion of sustainable energy and low carbon development through the promotion of green technology, which has seen the Designated National Agency (DNA) within the Ministry of Environment Tourism avail various funds to encourage innovative ideas to combat climate change such as renewable forms of energy (wind, solar. Bio-gas, biomass ect). More so, the private sector has joined the climate change battle by identifying green energy potential and intergrading it into their daily operations, as well as signing Independent Power Producer (IPP) agreements with the Ministry of Mines and Energy to set up renewable energy alternatives such as solar plants and wind farms to supplement the power capacity shortages experienced in the country.
However as forward-minded as alternatives to petroleum may be, their effects would mean loosening the grip on petroleum (mostly oil) and the countries that produce it. This in essence may prove difficult; given the fact that petroleum as a natural resource has for decades build (or ruined) economies and is seen as an economic booster for any country that possesses possible petroleum deposits. In Namibia for example, the fact that there are no Exclusive Exploration Licenses (EPL’s) left off Namibia’s coast means that the drive to find oil, coupled with the recent excitement surrounding the non-commercial oil found by HRT, is high on the government’s agenda. The on-shore exploration activities within the Owambo Basin are evident of this fact as well.
Each and every State is founded on two institutions, namely political and economic, and natural resource extraction (more so petroleum) goes hand in hand with both of them. The global political agenda is what keeps the OPEC cartel in control, making sure that consumers transfer trillions of dollars to producers by keeping the oil price above its true market-clearing value. Despite the various advances made in green energy such as electric cars and possible hydrogen fuel cells capable of storing and distributing energy, the sad reality remains that it will take decades before fuel cells and bioethanol alternatives make a dent in the oil economy. Even so, one would not only need the advancement of these technologies to be 100% effective, but the political leaders of that time should be pro-green without compromise, which is highly unlikely.
Zaki Yamani’s mantra therefore, even though plausible, implies that green energy alternatives will surpass the reliance on oil before it runs out which, is highly unlikely. As long as politics remain tied to the importance of natural resource extraction, one can only hope that green energy alternatives are intergraded to supplement the need for oil and its possible damages to the environment (car emmissions), which in its own right will be an achievement. The current emission laws mean that car producers are more emission-conscious, and these are vital signs that politics has included greens into its daily meal. Perhaps the OPEC cartel cannot be tossed into a dustbin, but one hopes they themselves might invest some money into green alternatives.

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