Publish What You Pay (PWYP) Asia Pacific held an online discussion through zoom media with the theme “Oil, Gas, and Mining in The Energy Transition” on Tuesday (29/6). In this discussion, David Manley, Senior Economic Analysis of the Natural Resource Governance Institute (NRGI) was present as a resource person.
Chadwick Llanos, PWYP Global Council opened the discussion by saying that the issue of energy transition is currently very important to be considered and discussed, considering that there are so many initiatives from several coalition countries that care about the issue of energy transition, so it should also be an important discussion for the Council Global later.
David Manley started his presentation by sparking several questions as a topic of discussion “What are the future opportunities for the energy transition? How can mining-producing countries utilize their mineral resources if the energy transition actually occurs later?”, said David.
According to him, the energy transition that is currently happening is a problem that is really the beginning for most of the global future, especially for mining-producing countries. Furthermore, David emphasized that suggestions that can be made to deal with this is to use scenarios using strong data both logically and internally.
The current energy transition can also occur in two scenarios, namely a fast-moving transition or a slow-moving transition. A fast-moving transition scenario will force a faster decline in demand for fossil energy, especially oil, and cause prices to fall. On the other hand, this scenario will encourage strong demand for mineral materials that support renewable energy infrastructure such as nickel, copper, cobalt, etc.
Meanwhile, the transition scenario that moves slowly will cause the impact of climate change to become increasingly unavoidable as a result of the use of fossil energy which is still far above the threshold to maintain a 1.5 degree temperature increase in accordance with the Paris Agreement. The slow-moving transition scenario still looks at the prospects for the oil industry for the next one – two decades, and an increase in mineral demand although not as big as the fast-moving transition scenario.
“The International Energy Agency (IEA) has issued several scenarios and data that can be used as a basis for starting the energy transition, moreover we do not know what will happen from the results of the energy transition later, so making scenarios is a very strong way to deal with that uncertainty,” added David.
David Manley also emphasized that there are three main issues in the extractive industry in the context of the energy transition, namely the growing risk to the viability of the oil industry, in particular the issue of prices which are predicted to decline during the energy transition process; increasing demand for gas as a complement to renewable energy; and the massive increase in demand for minerals that support energy transition processes, such as lithium, nickel, copper, etc.
“It should be understood that this energy transition will make countries compete to get key minerals as renewable energy infrastructure materials. Countries that have mining natural resources must really prepare for the “mineral booms” scenario in the future and the principles of good mining governance must also be addressed immediately to welcome this scenario,” said David.
At the end of the Chadwick Llanos discussion, the PWYP Global Council revealed that the various concerns that arise from an energy transition make us want to really understand what this issue means and the impact it will have in the future by trying to reduce the use of fossil fuels and so on. It is also hoped that this energy transition discourse will truly provide justice for the next generation.