The world may be on an irreversible march toward clean energy, but the past year has brought with it a sobering reminder that 21st-century economies cannot function for the foreseeable future without oil, natural gas and other fossil fuels, said Egyptian Minister of Petroleum and Mineral Resources Tarek El Molla.
In an exclusive interview with The Washington Times, Mr. El Molla acknowledged the transition to renewable power has picked up momentum in recent years, in part because of a concerted effort to bring all stakeholders — including major oil-and-gas companies — to the table.
A longtime Chevron executive himself, Mr. El Molla said that he believes the industry no longer views renewable energy and its advocates as enemies, with widespread recognition around the world that the long-term economic and scientific winds are blowing in the direction of wind, solar and other green sources of power.
But he cautioned there is an economic and political danger to transitioning too quickly. Mr. El Molla cited the Russia-Ukraine war — and Europe’s sudden need last year to quickly find alternatives to Russian oil and gas — as proof that fossil fuels still play a central role in energy markets, even in some of the globe’s most eco-conscious economies.
“With the Russian-Ukrainian war, the answer was clear: The world was not yet ready [for an energy sector] without depending or relying on, to a big extent, fossil fuels,” he said. “If the alternative fuels … were ready to take over, we wouldn’t have this problem.”
“You wouldn’t talk with any single oil-and-gas company that would deny the importance of the transition,” he said. “The idea is, they are saying just give us a reasonable time frame so we will be able to transit with you” and develop new energy sources.
“I think things will get much better now because we joined forces, both sides, and this will accelerate the transition,” Mr. El Molla said.
The Egyptian minister’s trip to Washington came amid yet another period of ferment in the Middle East, still the center of gravity for world oil and gas production. Iran and Saudi Arabia, two of the world’s biggest producers, announced Friday plans to ease a long period of hostility by restoring diplomatic relations. Israel is making a bid to be a major exporter for the first time, exploiting newly available offshore fields. And Egypt itself briefly became a net exporter of oil in 2020 before returning to its customary position as net importer in 2021.
Mr. El Molla’s U.S. trip included a visit to the major CERAWeek Global Energy Forum conference in Houston in early March, where he touted opportunities for international energy investment in Egyptian-controlled fields in the Mediterranean, the Nile Delta, the Gulf of Suez and the Eastern Desert region.
And the Russia-Ukraine conflict has cast a bright spotlight on the continued importance of fossil fuels and the disruptions that war can bring for producers, pipelines and markets. European nations have been among the loudest in calling for a worldwide transition to clean energy, yet many of those countries remained heavily dependent on Russian oil and gas for decades.
When Russian President Vladimir Putin began slashing that energy supply to punish Europe for its economic sanctions on Moscow, European nations prepared for the worst, with some governments warning of fuel shortages and blackouts. Those worst-case scenarios didn’t materialize, largely because Europe was able to secure fuel from America and from other sources.
Russia, in turn, has tried to replace its Western markets with greater sales to countries such as China and India, although at discounted prices.
“I think the lessons are very obvious,” Mr. El Molla said. “You need to diversify and you need to have several options, not only supplier-wise, but also energy-wise.”
‘Disproving the dogma’
In America, one major point of contention centers on the level of emissions-reduction commitments the U.S. should make when its global peers — mainly China — make much smaller promises. For example, former President Obama in 2016 promised that the U.S. would cut greenhouse-gas emissions by at least 26% by 2025 as part of the global Paris climate accord. President Trump, his successor, pulled the U.S. out of that deal, but the Biden administration has re-entered the pact and has even ramped up its emissions-reduction targets.
But the world’s No. 1 polluter, China, has made much more modest promises. As part of the Paris deal, Beijing vowed to cap its emissions by 2030. Chinese President Xi Jinping later added that the country would achieve carbon neutrality by 2060 and argues China is still a “developing country” that shouldn’t be held to the same standards and deadlines as the already industrialized West.
The massive gap in U.S. and Chinese commitments has fueled political dissension in the U.S., with some Republicans and other critics arguing that America shouldn’t handcuff its economy and energy sector while Chinese pollution keeps rising.
It’s a complex problem, Mr. El Molla said, and it is crucial that nations’ individual histories, economies, and technological capabilities are taken into account when crafting a “just transition” away from fossil fuels. Rather than zeroing in on those rifts, Mr. El Molla stressed that the most significant progress will be made by minimizing confrontation.
“When you include everybody, all stakeholders, they will start to get engaged because they will feel responsible,” he said. “It’s about being inclusive and putting everybody at the negotiating table. And I think this is happening now.”
Egypt was home to the negotiating table last year, with the Egyptian city of Sharm El Sheikh hosting the 2022 United Nations Climate Change Conference, or COP 27. Egypt’s own climate initiatives include getting at least 42% of its electricity from renewable sources by 2035.
At the same time, the nation has accelerated its natural gas production and reportedly earns billions of dollars in gas export revenue each year. Some specialists say Egypt has become something of a model on how to responsibly transition to clean energy while also taking advantage of cleaner fossil fuels such as gas.
“Egypt’s energy policy is helping to change the terms of the global debate on climate change by demonstrating that there is a basic compatibility between developing domestic natural gas resources and developing renewable energy sources,” Michael Tanchum, a non-resident fellow at the Middle East Institute’s economics and energy program, wrote in an analysis last year. “Disproving the dogma that natural gas and renewables are in a zero-sum competition, Egypt is advancing as a leader in renewable energy development while also increasing its offshore natural gas production capacity.”
In Egypt, Mr. El Molla said natural gas has played a vital role as a bridge between oil and the renewable fuels of the future — and there have been tangible benefits for the population.
“I think we have been able to demonstrate over the last few years how, even in Egypt, on the scale of our country, how the air quality has improved when we started to use less fuel, oil, to generate electricity while using natural gas,” he said.