In 1998, the Abu Dhabi Chamber of Commerce and Industry had organised a symposium on the future of oil, during which three industry experts talked about the post-oil era, one of whom set 40 years as being the life expectancy for oil.
Developments in the last two decades have pretty much validated those forecasts, as indicated by the many substantive technological changes in the oil industry.
The European Union (EU), including the UK, have announced plans to ban the use and sale of petrol cars by 2040.
Ban on petrol cars
The EU will also end the production of diesel cars by 2037, while Britain has allocated $750 million to build an electric car-charging network, as indicated by Sadiq Khan, the London Mayor.
The UK capital will also become a zero emission city by 2025.
In parallel, the Paris climate agreement stipulates the reduction of car emissions to zero by 2050. Many developed and developing countries are signatories to the agreement.
For example, India has approved the use of electric cars by 2030 on a national level, while China, the world’s largest oil importer, is moving forward in the same direction by speeding up the development of electric cars.
Meanwhile, the chairman of Shell, one of the world’s largest oil companies, recently replaced his Mercedes car with an electric one, as a gesture to encourage the use of eco-friendly vehicles.
Even in the Gulf, cities such as Abu Dhabi, Dubai and Riyadh seek to extend the use of electric vehicles to preserve the environment and reduce the burden of climate change.
This does not mean that oil has lost its importance.
The demand for oil will increase steadily in the coming years until it reaches its peak in 2030.
Then, demand will decline marking a countdown for the end of the oil era, whereby oil producing countries are seeking alternatives through sweeping changes in their economic policies, such as the future visions announced in some GCC countries.
To illustrate, motor fuel consumes 25 per cent of oil demand, while transportation acquires 40 per cent.
But other transportation modes have taken a turn in switching to other types of fuel.
Aircraft, for example, have begun to use natural gas, which has been burdened by excessive production and falling prices.
Natural gas is a clean energy compared to oil and its derivatives.
Certainly, this is a big challenge and countries need to prepare for it over the next 20 years, during which oil prices will suffer significant pressure due to the imbalance between supply and demand.
They can make the best use of the upcoming 15 years during which demand for oil will continue to be high.
Fifteen years do not represent a short period … but they can pass swiftly by.
Among oil producing countries, the UAE and Saudi Arabia are the most prepared GCC countries for this phase through their future visions.
Bahrain has a similar vision that can be activated by injecting fresh investments for economic diversification and improving energy sources.
It can build a platform to import natural gas, as this approach can be enhanced by building solar power stations, as is the case of Saudi Arabia and the UAE.
So alternatives are available, but they will require extra efforts to strengthen the economic and financial infrastructure to diversify sources of income and maintain high standards of living, while providing resources to protect national security from external threats and maintain stability.
That is the certain warranty for development.
Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.