Expert in energy issues, diplomat Carlos Pascual, former US ambassador to Mexico and Ukraine, gave an exclusive interview about the international energy market and the discussions on energy transition to the G20 website. He declared that the Global South countries must have a voice in the global energy system.
According to diplomat Carlos Pascual, the next US elections and the conflicts between Ukraine and Russia, and Palestine, are some of the issues that may influence the energy market and the discussions about energy transition around the world. During the 3rd Energy Transition Working Group meeting, he coordinated a table on geopolitics and energy that gathered experts from the field. At the occasion, he presented some tendencies in the face of the main current geopolitical factors.
Carlos Pascual is a Cuban-American diplomat who has served as US ambassador to Mexico and Ukraine. He also served as coordinator for International Energy Affairs at the United States Energy Resources Bureau. He is currently a vice president and head of Geopolitics and International Affairs at S&P Global in Mexico.
Read the exclusive interview the expert gave to the G20 Brasil website.
What we are also facing is the challenge of investing in a new energy economy with new fuels, new sources, such as wind, solar, hydrogen, and new technologies with carbon capture. But we must do this in parallel with meeting the demand and the energy economy of today. Otherwise, we will simply not be able to reach the transition and that is what is so hard today.
What is the current overview of the global energy market? What are the points of convergence and conflict?
We are at a historical moment for energy transition around the world. Never before had we sought to completely transform the nature of energy production and use. It took 100 years for petroleum to become more widely used than coal, with both continuing to play roles in the energy system. We are now trying something different, something we have never done, which is to completely change the fuels we use to start using renewable energy and, eventually, gradually eliminate the use of hydrocarbons. This hydrocarbon transition is extraordinarily challenging and will take time. So how can we satisfy the energy economy we have today? We must be able to meet the demand for energy in order to keep prices at a reasonable level. If we do not manage to find a way to meet the demand, we risk raising the prices.
What we are also facing is the challenge of investing in a new energy economy with new fuels, new sources, such as wind, solar, hydrogen, and new technologies with carbon capture. But we must do this in parallel with meeting the demand and the energy economy of today. Otherwise, we will simply not be able to reach the transition and that is what is so hard today.
Given the vastly different realities in each country, what is the importance of the G20 in finding a common path for the energy transition?
The G20 is absolutely essential because it reflects a vast array of countries with different economic interests and natural resources. These are the world's major economies. They are the largest energy consumers. And so the G20 proportionates a forum in which potentially 80% of the world's energy demand and global emissions are actually represented. If we can find a way to advance within the G20 to reach an agreement, then it becomes an important basis for the rest of the world to be able to gather in consensus and reach success. So developing a sense of confidence in the G20 is fundamental to ensuring open discussions.
Brasil must manage to bridge the gap between energy-producing countries; it is an emerging economy with the capacity to align with developing countries and understand their interests and opinions on the transition. So as a critical stakeholder at the G20, Brasil has an enormous responsibility on its shoulders to continue being a leader and helping find solutions that can bring the world closer.
I think that giving the Global South countries a voice in the global energy system and respecting that voice is key. There is much criticism on the table about how to provide energy to millions of people and how you obtain and reduce the cost of capital so that decarbonization technologies can be taken to the emerging economies in the Global South.
I think that giving the Global South countries a voice in the global energy system and respecting that voice is key. There is much criticism on the table about how to provide energy to millions of people and how you obtain and reduce the cost of capital so that decarbonization technologies can be taken to the emerging economies in the Global South.
At the end of the day, one of the critical things will be to bring the private sector into the situation and see what projects can be commercially attractive and produce significant return to the industry and, at the same time, benefit the countries that have less resources at their disposal to develop their technologies. Bringing the private sector into these discussions will also be important because we need private resources to be able to boost the capital required to make the investment to create the necessary capacities and reach the potential that the countries from the Global South have.
