The end of oil is not as near as it appears

– Back in the 1970s, there was widespread talk about the impending end of oil, with claims that reserves would last only 50 years. Now, fifty years later, we can still say that oil reserves are sufficient for nearly another 50 years, despite consumption being several times higher than it was half a century ago, said Leszek Wiwała, President of the Polish Organisation of Petroleum Industry and Trade, during the debate titled ‘The Twilight of Oil: Pipe Dream or Realistic Scenario?’ at the Economic Forum in Karpacz.

– At present, the twilight of oil appears to be on the horizon, but the process is unfolding very slowly. A shift towards low-carbon, alternative fuels is undeniably necessary. While oil consumption will steadily decline, particularly in Europe and the United States, countries like India and China are expected to significantly increase their use for transportation over the next two decades –more than offsetting the reductions seen in the West, noted Leszek Wiwała.

Goals versus reality

In her mandate to the new European Commission, President Ursula von der Leyen reaffirmed the proposal for a 90% reduction in greenhouse gas emissions by 2040. According to the European Commission’s analytical reports, fossil fuel consumption within the Union is projected to decrease by 74% by that time.

– Realistically, however, the 'twilight of oil' will largely depend on the pace at which low- and zero-carbon energy sources are developed, cautioned Aneta Wilmańska, director of Orlen’s Brussels office.

The International Energy Agency predicts that global oil demand will peak in 2029. A year later, demand is expected to decline, driven by the growth of renewable energy sources (RES) and increasing government pressure to implement decarbonization policies.

The transformation is underway, but it must be approached with caution, especially given current geopolitical factors. Europe is at war, and global tensions are high.

In such conditions, the appetite for risky behaviour and revolutionary change diminishes. Traditional fuels remain vital for the normal functioning of the economy and are also crucial for military operations.

Aneta Wilmańska highlighted that the outbreak of the war in Ukraine has prompted the European Commission and EU Member States to reassess their strategies for ensuring energy security.

– Aneta Wilmańska stated that the destabilization of energy markets and Russian aggression against Ukraine have shifted the focus of Community actions. In addition to climate goals, considerations of security and, more recently, the competitiveness of the EU economy now play a crucial role in shaping policy.

A quarter-century for change is a relatively short span of time.

Europe aims to achieve carbon neutrality by 2050, leaving just over 25 years to reach this goal. Given the scale of the necessary changes, this timeframe is quite brief. Entire sectors of the economy must transition to entirely new pathways.

How do transformation processes function in practice? Qemetica, in collaboration with Employers of Poland and the Instrat Foundation, conducted a survey among representatives of Polish industry. According to Piotr Szlagowski, Director of Strategy at Qemetica, the survey reveals that while Polish entrepreneurs are incorporating decarbonization into their strategies, it is less reflected in their investment expenditures. Additionally, there are notable disparities, with large companies being more proactive in this area compared to medium and small enterprises.

Aneta Wilmańska emphasized that while setting ambitious goals is relatively easy, preparing, financing, and implementing the necessary investments is far more challenging.

– Today, with the adoption of numerous regulations under EU law, there is widespread recognition that such ambitions come with significant costs and technological challenges. While we support climate goals and acknowledge the necessity of reducing greenhouse gas emissions, it is also crucial to consider economic and social conditions when determining pathways to climate neutrality," said the director of Orlen’s Brussels office.

Regulatory challenges

Businesses warn that excessive EU restrictions and regulations could undermine European industry. They continue to press EU decision-makers with their concerns and demands.

This concern led to the creation of the Antwerp Declaration, directed at EU governments and the new European Commission. Simultaneously, the Polish Chamber of Chemical Industry (PIPC) released the Polish Chemical Sector Manifesto. These efforts aim to safeguard the competitiveness of European industry.

Tomasz Zieliński, President of PIPC, emphasized that by tightening regulations on European industry, policymakers are inadvertently creating an opportunity for Chinese products to enter the market.