Fossil fuel leaders embrace the energy addition era

Fossil fuel leaders have welcomed a paradigm shift in the narrative regarding the energy transition.

Speaking to CNBC on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), OPEC Secretary-General Haitham Al Ghais said there has been a “big shift” in the way industry leaders and policymakers are now talking about meeting rising global energy demand.

“Three years ago, it was all about energy transition. Energy transition, climate change [and] get rid of fossil fuels. Today, it’s about [how] we have to have a balanced approach,” Al Ghais told CNBC’s Dan Murphy in an exclusive interview.

“So, it’s a very different tone, which … I must say, sounds like music to my ears because this is what OPEC’s been advocating for the last two, three, four years actually,” Al Ghais said Tuesday.

His comments were echoed by several industry players at the UAE’s annual oil summit, with many championing the concept of “energy addition” to secure supply and accommodate new demands from sectors like artificial intelligence.

This energy addition refers to a push to develop new technologies, such as renewables like solar and wind, in parallel with existing fossil fuels. Energy transition, by contrast, typically refers to the transfer from one energy source to another.

Climate scientists have repeatedly warned that a substantial reduction in fossil fuel use will be necessary to curb global heating, with the burning of coal, oil and gas identified as the chief driver of the climate crisis.

UAE Minister of Industry and Advanced Technology Sultan al-Jaber said at the opening of ADIPEC on Monday that global electricity demand will continue to soar through to 2040, with power for data centers set to grow fourfold and 1.5 billion people expected to move from rural areas to cities.

The minister, who also serves as CEO of UAE oil giant ADNOC and led talks at COP28, said renewable energy technologies were on track to more than double globally by 2040, with liquified natural gas (LNG) demand poised to grow by 50% and oil set to stay above 100 million barrels per day.

“This all adds up to something far more complex than a single path energy transition,” al-Jaber said. “What we are talking about here is reinforcement — not replacement. In fact, what we’re really talking about here is energy addition.”