Does the World Need You to Fight Energy Poverty?

I’m writing my next book about The Moment. I’m exploring the forces laying bare the challenges of the energy transition—as in last month’s post “The Three Ts of Energy Realism.” I’m looking at what The Moment means for you, the oil and gas leader. To seize this opportunity of a lifetime to lead in the energy future, we need to understand the stakes.

Today we’re looking at another arena in which industry leaders are reading The Moment in either of two ways: energy for emerging economies. The takes are similar to those I looked at in “The Grid Is in Trouble”—but the stakes are even higher and the penalty for missteps even more severe.

Across our industry we have widespread agreement that there is a driving need for oil and natural gas resources to be available for the “other 7 billion people,” as Arjun Murti so compellingly puts it. Yet you—the industry leader—must understand how your passion for this topic can come across as unserious and insincere, causing you to forfeit the opportunity of The Moment: to answer the call of civic leaders ready to have pragmatic conversations about the energy future.

So how do you both passionately care about human flourishing around the globe and understand the real-world limitations of your engagement on the subject? That’s what I cover today.

All of these things are true: The six facts about energy for development we agree on

Regardless of your perspective on The Moment (lead or double down on the status quo), we industry supporters can all agree: Emerging economies are demanding—and deserve—access to the energy that literally empowers a middle-class lifestyle. Before we get into the pitfalls of the usual oil and gas arguments about solving energy poverty, let’s first review the six facts about the global need for energy that all of us can agree on:

1. Developed countries benefited from easy energy availability. The rise in energy consumption and emissions in the developed world came alongside notable increases in GDP output, quality of life, and middle-class growth. Economic growth and energy consumption have been closely tied throughout much of modern history. There are no high-income countries with low energy consumption. Full stop.
2. Seven billion people have yet to reap the same benefits. Over 64 percent of the world’s people live in emerging markets and developing countries (other than China); they have an average per capita income of one-fifth of the developed economy average. According to the Energy Institute’s statistical review of world energy, roughly 750 million people do not have access to electricity, and the average energy consumption per capita in Africa, South Asia, and Central America is about an eighth of that in North America. Further, more than 2.6 billion people cook with high-pollutant, low-density fuels such as biomass.
3. Emerging economies cannot “leapfrog” industrialization. There is broad shared interest in ensuring that many of the world’s fastest-growing populations have the economic opportunities afforded by middle-class energy access. Take Nigeria, where the population is expected to be 400 million by 2060, surpassing that of the United States. An economy like Nigeria’s must have access to levels of energy—and reliability of that energy—that allow for building industrial sectors such as manufacturing and chemical production in support of the economic and infrastructure needs of their population.
4. Coal continues to power industrialization and economic growth. Although the International Energy Agency predicts coal demand will drop in 2024 and plateau through 2026, coal demand in China and India continues to rise in sync with energy demand. China is the global leader in coal consumption, accounting for 56 percent of global coal consumption in 2022, and China and India accounted for over 70 percent of the growth in global coal demand in 2021. China and India have over 173 gigawatts and 29 gigawatts of coal-fired power in construction in addition to their 1,147 gigawatts and 240 gigawatts in operation, respectively.
5. Energy demand in other developing countries is rapidly growing. Energy demand and consumption will continue to increase as countries develop and raise their populations out of poverty. According to the Gas Exporting Countries Forum, Africa’s primary energy demand is expected to increase by 82 percent from 2021 to 2050. Sub-Saharan Africa will account for 84 percent of the growth, as those countries work to expand energy infrastructure, to provide for the half of the population that currently does not have access to electricity.
6. Natural gas is a significant climate solution. The easiest step to take globally to reduce current and reasonably-anticipated-future emissions is replacing coal-fired power and direct use of coal with natural gas. Coal produces more than twice as much CO2 for every kilowatt-hour of electricity as natural gas. But natural gas infrastructure requires more international support. (You can’t just dig it up and load it on a truck!) Notably, natural gas is expected to account for roughly 30 percent of Africa’s energy growth from 2021 to 2050. Mozambique, Tanzania, Algeria, and Nigeria are developing LNG projects to provide energy and generate revenue to address economic challenges.

It’s noteworthy that all of those facts can be controversial outside of the industry! And that’s an important consideration as we consider how to talk about energy to address global poverty.

Two reads on what to do with these facts

I am passionate about the role that our industry can play in emerging economies. Proof point: I’ve served on the board of the Energy for Growth Hub, an NGO dedicated to dramatically increasing energy access for the 3 billion people living in energy poverty globally, since it was founded. And yet, as I laid out in “Why I’m Not Talking About Energy Poverty Anymore,” it’s ineffective when oil and gas leaders talk about addressing energy poverty.

Todd Moss, of the Energy for Growth Hub, in “Do We Need Big Energy to Fight Energy Poverty?” identifies the inherent tension we are addressing today. (Please note who is providing all the human power in the photo featured in that article!) Industry supporters have our own language and take on the topic that do not work with our stakeholder audiences.

For example, throwing around “human flourishing” has become seen as a dog whistle among industry supporters for rationalizing status quo energy production. I have sat in many rooms where stakeholders rolled their eyes at the industry proponent expounding on the importance of addressing energy poverty. Just because the information is true doesn’t mean it is compelling or credible to our problem-solver stakeholders.

Addressing energy poverty will be a big part of the rhetoric of The Moment—but if we keep up our current rhetoric around energy poverty we’ll end up shut out of the conversation. So if you are passionate about addressing energy poverty (and The Moment), here’s what you can do:

• Educate yourself on energy poverty—from sources outside of industry. The discourse around energy poverty is deeply political, extremely sophisticated, and full of nuance. It’s a heavy lift. Start your journey here! If you’re not prepared to make that effort, don’t talk about energy poverty in the context of rationalizing oil and gas use today. Period.
• Follow industry developments and how they play out among stakeholders. There’s a lot of promising work underway. Many African countries have partnered with international energy companies, often with partial project ownership. These projects provide energy sources and generate tax revenue to address economic challenges. If you’re going to make the case for the role of oil and gas in the world, it’s important to understand what’s happening on the ground and how those developments are playing out. Speaking to generic, hypothetical LNG imports or domestic oil development is not credible.
• If your company is doing real stuff, keep doing it. You should continue talking about the tangible work your company is doing on the ground to bring energy to communities that don’t have it. Work that actually provides better energy to these communities—by expanding access or replacing dirtier fuels—is fair game.
• Support all of the above. Low-carbon and renewable energy help fill in the gaps. Renewable and biofuel energy consumption in 2023 grew 4.9 percent in South and Central America, 5.3 percent in Africa (not including the Middle East), and 6 percent in the Asia Pacific region, providing low-carbon energy to meet rising demand.

As?Moss says, “if we’re going to solve energy poverty, we’re going to need Big Energy too.” So let’s stop talking about it and instead get after the real, hard work of understanding and addressing energy poverty.?

Thank you to Morgan Gass for her writing contributions to this piece. Adamantine is helping companies understand how to engage in The Moment: Reach out to learn more. Not sure where to get started? Start by forwarding this email to three colleagues! Do you know that our industry is important to the energy future? Hit that like button below.

Walk the walk,

Tisha