The world is embracing energy transformation with opportunities and uncertainties ahead. At the energy industry conference CERAWeek held on March 11-15, politicians, businessmen and experts believed cooperation and innovation should be highlighted to achieve energy abundance and security.
ENERGY TRANSFORMATION: COMPANIES NEED TO ADAPT
The world is undergoing an energy transformation that will have deep impact on oil and gas industry, said participants at the 38th CERAWeek held by the London-based information company IHS Markit.
With consensus among more and more countries on climate change, the future of clean energy was thoroughly discussed among business leaders and policy makers.
Energy companies must adjust themselves to the global trend of energy transformation, Liu Chaoquan, vice president of China National Petroleum Corporation Economics and Technology Research Institute, told Xinhua.
"The change features transformation from low-carbon to cleaner energy such as solar, wind, hydrogen, and nuclear," he said.
Liu believed that the role of oil is weakening in the long run thanks to the global trend of energy transformation. In the short run, oil prices are related ly to factors like geopolitics.
"Energy companies must realize that a short-term price hike does not mean long-term prosperity in the oil industry," he said.
The International Energy Agency (IEA) Executive Director Fatih Birol also pointed out that environmental carbon footprint remains a challenge for global energy industry.
"We think there is an important homework for the oil executive here today which is the environmental footprint," he said, adding that not all energy companies take environmental issues seriously enough.
China is at the forefront of energy transformation, Liu said, adding that China's inventory and annual increment of electric vehicles account for more than half of the world's total, and so is the country's solar and wind installed capacity.
GEOPOLITICS: UNCERTAINTIES AHEAD
In this year's CERAWeek, geopolitics were highlighted by business insiders and government officials. In its five-year outlook released at the event, the IEA said geopolitical issue is becoming an increasing concern over the global energy market.
"We are seeing that geopolitical concerns (are) casting an increasing shadow on the oil markets today and tomorrow," said Birol, admitting that this situation is rarely emphasized by the IEA in the past.
"This is something of concern to (the) Intentional Energy Agency as we wanted to see oil markets is only an oil market," he continued.
The International Energy Forum (IEF) Secretary General Sun Xiansheng argued that geopolitics is associated ly with energy and that the link is even more pronounced today.
"U.S. sanctions against Iran may lead to a shortage of oil and gas supply. Venezuela is in turmoil and its oil production has already fallen from 4 million barrels per day to 1 million barrels per day. The Brexit issue has been dragging too long that the tension may have a huge impact on the European energy industry. These geopolitical problems will create uncertainties in the supply of energy market," he said.
Commenting on the U.S. energy development, Sun said driven by technology, shale oil has boomed in the country in recent years.
"The rapid growth of shale oil transformed the United States from a major energy importing country to an exporting country, shaping the global landscape," he said.
Sun's thought was echoed by Roger Diwan, vice president of financial services and energy at IHS Markit.
"Shale has brought that structural volatility and we haven't solved that problem yet," he said.
COOPERATION: TOWARDS ENERGY SECURITY
In the new context of global challenges, energy security was emphasized among national and international leaders. Many argued that smoother and r cooperation and collaboration between energy producers and consumers are crucial to achieve energy security.
The United States and China, as large oil and gas producers and consumers, have natural opportunities and great potential to cooperate in the energy field, said IEA senior oil market analyst Toril Bosoni.
Bosoni said the biggest increase of imports, both oil and gas, is coming from Asia, in particular China.
According to her, there is not enough of oil from the Middle East to support the growing demand of China and the rest of Asia, and more oil flows will come from the United States and Latin America.
"China's already the largest buyer of U.S. crude and we think that will continue in the years to come," she said.
Besides, international organizations such as the IEA and the IEF also need to shoulder more responsibility to facilitate energy cooperation.
The IEF consists of energy producers, consumers and trading nations, Sun said, adding that efforts should be made to promote smoother cooperation among them.
"We should encourage energy producers to strengthen their productivity, enhance energy supply, and address energy poverty issues," he said.
INNOVATION &TECHNOLOGY: KEY TO FUTURE DEVELOPMENT
Looking into the future, entrepreneurs, scholars and politicians all believe that technology will play an increasingly important role in both supply and demand sides of the energy industry.
The IEA's five-year outlook released at CERAWeek showed that the industry has established digital learning on the supply side. Thanks to the usage of digitalization edge and competitive and innovative service sector, the U.S. shale development cost today are one-third below the 2015 levels.
On the demand side, electric vehicles are playing a very significant role, sending an important signal to the traditional oil companies.
Delivering a speech at CERAWeek, U.S. Energy Secretary Rick Perry said the United States is embracing a "new American energy era" with the help of innovation and new technologies like artificial intelligence.
Perry recalled that there used to be a pessimistic view of global energy which claimed that the days of energy abundance were over.
"Thanks to innovation, we've got more than enough energy to share with the world," he said.