Page 5 - FSUOGM Week 07 2021

FSUOGM COMMENTARY FSUOGM

Petrostates to lose trillions of

dollars in revenues amid clean

energy push: report

New “wake-up call” analysis from Carbon Tracker looks at impact of shift

towards lower-carbon energy

GLOBAL A new report estimates that the shift towards the energy transition increases,” Carbon Tracker
lower-carbon energy will cost oil and gas pro- states. “Compared with industry expectations,
ducing countries trillions of dollars in govern- petrostates’ government revenues would be $9
ment revenues over the next two decades. trillion lower over the next two decades under
The findings by Carbon Tracker are a the low-carbon scenario. The majority of this
“wake-up call” for countries heavily reliant on oil decrease is driven by lower prices, rather than
and gas to fund public spending to diversify their lower volumes.”
economies. Carbon Tracker has also called on The report, which will be launched on Febru-
richer states to help those with weaker finances ary 24, attempts to quantify the potential short-
to make the transition towards cleaner energy. fall in revenues under a low-carbon scenario
The Beyond Petrostates report focuses on 40 compared with budget receipts over the past dec-
countries with the greatest fiscal dependence on ade. Suriname is set to see the biggest percentage
oil and gas revenues. These so-called petrostates shortfall of 94%, as most of its oil reserves are yet
are predominantly in the Middle East, North and to be developed. It is followed by Timor-Leste,
West Africa and South America. They stand to Colombia, Cameroon and Sudan.
see a 46% drop in these revenues as the world Among countries in the former Soviet Union
makes the transition to renewables and other (FSU), Ukraine is set to see a 74% shortfall, while
low-carbon energy sources. Azerbaijan, Russia and Kazakhstan are antic-
While hydrocarbons will continue to domi- ipated to have deficits of 68%, 47% and 41%,
nate the world’s energy mix for decades to come, respectively. Turkmenistan is near the bottom of
the International Energy Agency (IEA) and oth- the rankings, with a shortfall of only 2%.
ers have slashed long-term demand forecasts in In the Middle East, the country expected to
light of the coronavirus (COVID-19) pandemic have the biggest shortfall is Bahrain, at 70%. It
and accelerated pushes by countries to decar- is followed by Oman (54%), Egypt (45%), Saudi
bonise their economies. This has led to produc- Arabia (44%), Qatar (41%), Iran (39%), Kuwait
ers reducing their price predictions and writing (38%), the UAE (34%), Iraq (30%) and Yemen
off billions of dollars of production assets no (0%).
longer viewed as commercially viable. Carbon Tracker then assesses countries’
“Populations that are heavily reliant on fos- vulnerability to the energy transition based on
sil-fuel production face lower government reve- their dependency on these revenues. The coun-
nues and job losses as the pace and inevitability of tries ranked as the most vulnerable in Tier 5 are

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