Incorporating unconventional and renewable energy into the international energy framework: the diminution of OPEC in a new energy world order

Abstract

Abstract Nearing its 60th anniversary of foundation, the once unchallenged Organisation of Petroleum Exporting Countries (OPEC) faces a modern diminution of influence. This slipping grip of near-hegemonic control exerted over the petroleum industry, is partly reflective of the rising influence of unconventional energy sources, the rising popularity for alternative and renewable energy sources and a downstream consequence of its own exertion of power. With rising international demand for renewables as a means to provide global energy security, the role of the state remains paramount in meeting energy demands. The international framework falls short of enabling a framework that brings renewable energy past its domestic dependency and into an internationally traded commodity. Following the 1973 embargo against the USA, OPEC inadvertently spurred on the need for a diversified market of energy production to ensure global energy security free from the whims of oligarchic groups. The subsequent investment into alternative energy, including the rising technological advancements made in areas such as horizontal and seismic imaging technology (or, ‘fracking’), has led to the diversification of energy production sources and lessened reliance on external importers by the American energy consumption powerhouse. The lessening reliance on OPEC has had a consequential impact on the unofficial head of the organization, Saudi Arabia. From the proposed initial public offering of Saudi Aramco to Vision 2030, all signs point to looming economic troubles for the petroleum dependant state without adequate, and effective, diversification.