RIYADH: The only way the world can beat sky-rocketing energy prices and ongoing market volatility is through investing in new supplies, according to a top official of a global energy body.
Speaking at the opening ceremony of the 13th International Energy Forum, the organization's Secretary General Joseph McMonigle said that market uncertainties and fuel price volatility are harming consumers, investors, businesses and government.
“The only sure antidote to high energy prices and market volatility is adequate investments in new supplies,” he said, adding that the security of energy supplies has emerged as a top priority for policymakers.
McMonigle added: “Long-term demand has now compounded with risks, particularly in the oil and gas markets.”
The IEF Secretary General pointed out that a lack of funding in the sector could negatively impact the ongoing energy transition and climate actions.
“Underinvestment threatens to undermine energy security, and it can also stop progress on climate goals by undermining public support for climate actions and increasing reliance on more carbon-intense options for the short term as we have seen,” said McMonigle.
He suggested that investment decisions in the energy sector should be based on realistic scenarios and real-time data on demand outlooks to prevent supply shortfalls.
“Clear assessments of the likelihood of ‘scenario outcomes’ based on recent trends, investment levels, consumer behavior and policy enforcement could enhance the usefulness of the outlook for investors and policymakers,” said McMonigle.
While aspirational scenarios are essential for tracking progress toward climate goals, he insisted it is equally important to provide outlooks based on current policies and consumer trends.
McMonigle further pointed out that a better understanding of the future energy outlook is very much necessary to combat the challenges posed due to global crises including climate problems and economic uncertainties.
“Fostering a greater and mutual understanding of the energy outlooks of the IEA, OPEC, and other international organizations, I think have never been more important,” he concluded.
