OPEC seems to have gone into some strange form of denial about the future of oil and gas.
Some 190 countries signed a deal at the Paris climate conference in December which aims to drastically reduce the output of greenhouse gases from Fossil fuels by 2040 and bring about total decarbonisation by 2070.
Yet OPEC’s World Oil Outlook report released just before Christmas says global reliance on oil and gas will continue unchanged for another quarter century.
Fossil fuels will make up 78% of the world’s energy in 2040 barely changed from today, it says, and global demand for crude oil will rise by 18mln barrels a day (bopd) to 110mln bopd by 2040.
The Twelve member OPEC cartel, which is dominated by Saudi Arabia and controls over 30% of world crude exports, has shaved its long term forecast only slightly by 1mln bopd and this is due in part to weaker economic growth.
So there will be no significant diminution of greenhouse gas emissions, if OPEC is right.
The cartel’s reasoning behind its forecasts is that the fleet of cars in the world will rise from 1bn to 2bn cars over the next 25 years and 94% of cars on the road will still be powered by petrol and diesel.
The expectation of many that gas gussling cars will be replaced by hybrid, electric and hydrogen vehicles is misplaced, the cartel says.
“Without a breakthrough in technology, battery electric vehicles are not expected to gain a significant market share in the foreseeable future.
“Electric cars cost too much. Their range is too short. The batteries are defective in hot or cold conditions.”
The cartel predicts battery-powered electric cars will capture just 1% of global vehicle sales by 2040.
OPEC also says there will be little demand for other alternative-energy vehicles powered by hydrogen fuel and natural gas due to high costs and lack of refuelling stations.
The cartel counts hybrid electric cars as oil-powered, because most of them run on gasoline. It says hybrids will capture 14% market share by 2040.
But OPEC is living in a time warp.
They live in a world when oil and gas seemed so abundant, cheap and efficient that for generations not enough investment was made in alternatives.
Moreover, concern over man-made carbon emissions causing climate change has been slow to gather pace, as the abysmal failure of the Copenhagen summit to reach a climate deal just six years ago attests.
Everything is different now.
Necessity is the mother of invention. As many wars have shown a crisis or emergency is a great catalyst for scientific innovation.
Climate change might not yet be categorised as a war, but there is much greater degree of urgency about it than before and this has meant a blitz of investment in new technologies and products.
There is now a race to win the battery prize.
Clean energy company Phinergy Alcoa is claiming a potential range of up to 1,000 miles with a system which creates energy through a reaction of aluminium and water with oxygen.
A team of chemists in Cambridge in the UK says it has cracked the technology of a lithium-air battery with a capacity to take a car from London to Edinburgh on a single charge.
This to mention just two innovators working on batteries there are many more.
Goldman Sachs in London is betting that battery costs will fall by 60% over the next five years, driven by economies of scale as much as by technology.
The driving range will increase by 70%.
Ford has recently announced that it will invest US$4.5bn in electric and hybrid cars, with 13 models for sale by 2020.
Toyota, the world’s largest car manufacturer and pioneer of the Prius hybrid has spent multi-millions of dollars and bet its future on hydrogen fuel cars, starting with the Miral its first mass market product. It has hinted that it will end all production of petrol and diesel cars by 2050.
Goldman Sachs expects ‘grid-connected vehicles’ to capture 22% of the global market within a decade and by then, it says, the car giants might think twice before investing any more money in the internal combustion engine.
This is a world away from OPEC's forecasts.
The Saudis, having driven the oil price down to US$35 a barrel in a vainglorious attempt to maintain its market share, now have their heads stuck in the sand; and there’s an awful lot of sand in Saudi Arabia.