Managing the Tide of Green Revolution: OPEC needs to evolve to stay relevant
Every living thing in the universe tends to evolve in order
to guarantee its own survival that includes the Covid-19 virus that has been wreaking
havoc across the globe at many levels, including those of the beleaguered oil
industry.
Even the virus in question, despite the absence of a ‘brain’
in the biological sense, appears to be evolving, because the latest data shows
it’s not as ferocious as it was during the First Wave of the pandemic.
That means it has evolved, not necessarily in Darwinian
sense, taking millions of years, for a purpose: to guarantee its survival for
the next few years or even decades; it simply does not want to destroy its
host, us, the human beings.
In short, it is not as 'stupid' as it has been portrayed to be, due to lack of what we have in a corresponding, anatomical sense. It holds the whole world hostage, while remaining at microscopic level, until its goal is achieved - hardly an inverse ingenuity.
In this context, there is a humble lesson to be learned for
the OPEC, the organization of the oil petroleum exporting countries.
At a time when the countries that rely on oil revenues to
balance their books in the presence of plummeting oil prices, more often than
not, the solution that the OPEC usually coming up with, has been the enforced
production cuts.
The organization has failed – or deliberately ignored – to
think that the move has always been against the instincts of those who govern
the countries in question, because the latter know it’s easier said than done.
Production cuts may have brought about the intended goal in
the short run too – keeping the oil price stable. The strategy - if you can
brand it that way - however, is clearly not working in the long run and it is there
for all to see.
The OPEC must have got a rude awakening this week when the
British government announced that it does not want vehicles powered by
petroleum products after 2030 on the British roads, in a decade.
It’s a pretty ambitious plan and only history will tell how
feasible it is. The fact of the matter, however, is that the Green ambitions
are very much alive and kicking.
In the presence of these monumental challenges, the OPEC cannot
afford to just focus on production cuts, something that its members reluctantly
embrace, perhaps as a last resort; getting into an intense PR exercise is not
the answer either.
It must invent a visionary blue print for the future of the organization
from the top that can effortlessly permeate downwards to face up to the inevitable
realities. It needs folks of Steve Job’ calibre at the decision making level, if
the organization that has been in existence for over 6 decades - in order to
stay relevant.
Otherwise, it may well face the challenges that the old
Soviet Union faced in the 80s. There is
a risk of the organization collapsing from within.
Some members of the organization, such as the UAE, are not
strict conservative idealists any more.
The way they developed diplomatic ties with Israel against all odd is a
classic example that progressive thinking is rife in the region as never before
in the history.
These countries may not toe the line of the OPEC for ever.
They may stubbornly refuse to buy the well-hackneyed ‘solution’ – the production
cuts – at some point in the future.
The encouraging news is that there will still be a place for
fossil fuels, even beyond the next decade, despite the dreams of Green
enthusiasts; the existing alternatives have not crossed the redline to be
irreversible; nor are they good enough to be serious substitutes.
I cannot imagine a world without fuel pumps – or pump
attendants staring at the empty sky in utter despair – after a decade from now.
That means the OPEC still has time to come up with a grand
solution – or be a part of it – for a
world where the protection of the environment and sensible use of petroleum
products co-exist.
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