Karin Kneissl, the head of the G.O.R.K.I. Center at SPbSU, who served as the Foreign Minister of the Republic of Austria from 2017 to 2019, gave an assembly lecture “Permanent Sovereignty over Resources: The Creation of OPEC” at the St. Petersburg Empress Catherine II Mining University. Rector Vladimir Litvinenko, introducing the guest to the audience, called her “a person who was not afraid to challenge the ideology that has become dominant in the European Union in recent years”.
Her desire for constructive dialog, including with Russia, which, as we know, has not been honored in the West lately, brought her many problems and eventually led to her forced emigration. Due to threats of physical violence, she had to leave first the country and then the EU as a whole. Before moving to Russia, Ms. Kneissl lived for some time in Lebanon, where electricity was sometimes supplied to homes for only one hour a day.
“The basis for sustainable development of any economy is free access to resources. That is, the ability to extract raw materials independently or to purchase them from partners. That is why it is very important for all of us to have information about the problems that the fuel and energy complex is facing today and to realize promising ways to solve them. Especially valuable is the knowledge obtained not from network systems, as they often represent a crooked mirror, but from first-hand accounts, from analysts whose opinion is based on facts and rich personal experience. Ms. Karin Kneissl is an OPEC expert who has long studied the patterns affecting the oil market. I am glad that the meeting with such a high-level expert has gathered a full hall, because it will undoubtedly enrich everyone who is present here,” Vladimir Litvinenko addressed the undergraduate and graduate students, prefacing the lecture.
Forpost quotes the most interesting excerpts from this speech.
Is divestment from fossil fuels and a full-fledged “green transition” possible?
Karin Kneissl: Former Saudi oil minister Sheikh Ahmed Zaki Yamani once said that “the Stone Age didn't end because we ran out of stones”. Many people liked that phrase, and it is now often quoted to say that time is moving forward, technology is becoming more advanced, and therefore the age of fossil fuels is coming to an end.
But how true is this statement? Oil is now the most sought-after commodity on the planet, the demand for it is growing, and 70-80% of energy consumption in the modern world is generated by burning fossil fuels. Let's be frank: if at the current stage of technological development and in the foreseeable future we reduce this figure to at least 40%, we can forget about the stability of energy supply. We will live with constantly running refrigerators, as I did in Lebanon, and we will have no way to wash our clothes or charge our gadgets when we need to.
We are not in a position to give up oil and achieve zero greenhouse gas emissions. In other words, a 100 percent energy transition is impossible. It's simple: there are laws of the material world, and anyone who ignores them is just a populist who raises his status by saying buzzwords associated with the green agenda. But the problem is that they have nothing to do with reality, because without fossil fuels it is simply impossible to achieve the economic growth that every nation seeks.
This is axiomatic. Such industries as metallurgy, machine building and a number of others consume a colossal amount of energy. It is impossible to ensure the stability of its supply at the expense of renewable sources (whose efficiency depends on the vagaries of nature - ed.). But does a country like Germany, for example, want to lose its industry? I don't think so.
The problem is that many specialized companies, which are under legal and moral pressure, are forced to reduce their investments in the hydrocarbon production sector. Or declare that they are reducing their investments, but do exactly the opposite, which leads to a loss of market transparency due to this approach.
How did Russia and Saudi Arabia turn from rivals to partners?
Karin Kneissl: In 2016, when OPEC+ was created, many were skeptical about its prospects, including the UK. However, it has proven to be a viable organization. Many call it a cartel and say it was created to keep prices at high levels in line with exporters' expectations. But, in fact, it is primarily about coordinating oil production to balance the global market.
Given the growing geopolitical tensions, in particular NATO's presence in Ukraine, the military action in the Gaza Strip, the recent attack on the Iranian embassy in Syria, and the Islamic Republic's response, finding this balance will obviously become even more difficult. And this is where the role of OPEC+, whose members hold 80% of all available oil reserves, will become crucial.
Previously, it was impossible to imagine that Russia and Saudi Arabia, which were rivals for a number of reasons, would be able to establish such constructive cooperation. However, it has happened. The partnership at the diplomatic, political level is becoming closer and closer, which allows us to hope that the industry will remain stable on a global scale. I repeat once again: mankind will continue to produce oil and consume it, the only thing that matters is the price of a barrel.
Why is energy sovereignty important?
Karin Kneissl: The notion of permanent sovereignty over natural resources dates back to the sixties of the last century. Many years have passed since then, but in essence nothing has changed. Any state aimed at progress aims to control the extraction of raw materials and technologies of their deep processing, because this is the basis of sustainable development.
Yes, of course, both minerals and final consumption goods can be purchased abroad. But who guarantees that their supplies will not stop at one “beautiful moment”? Two years ago, Russia found itself in just such a situation, although before, probably, no one seriously thought that some imported products, to the presence of which everyone had long been accustomed to in the store, would suddenly disappear.
The essence of the concept of permanent sovereignty over resources is that all peoples should have the right to control their subsoil, as well as receive the main benefits from their development. Unfortunately, the modern world order is far from always in line with this principle, but in the activities of OPEC + it is the prevailing one.
The lecture was held in the format of dialog. At the end of the lecture, undergraduate and graduate students had an opportunity to ask questions. They touched upon such topics as the prospects of the organization of oil exporters, the abandonment of cars with internal combustion engines and a number of others.