“Like it or not, today, oil still represents 30 per cent of the global energy mix. When you add gas to that, it’s about 56, 57 per cent. With coal, fossil fuels, as they call it, still represent 80 per cent.”
“And you know what? From 1980, it was about 80 per cent too.”
Those are the words of Organisation of the Petroleum Exporting Countries (OPEC) secretary-general Haitham Al Ghais, delivered at the second edition of Energy Asia in Kuala Lumpur last June, where he shared the stage with my colleagues.
I walked away from that panel impressed not just by the rigour of the numbers, but by how unapologetically the 56-year-old former Kuwait Petroleum Corporation (KPC) analyst defended each one.
His stark remarks serve as a reality check – despite decades of climate pledges and record investment in renewables, the world remains as dependent on fossil fuels as it was four decades ago.
That contradiction was front and centre at the three-day conference, where Big Oil’s and Wall Street’s finest gathered under the theme “Delivering Asia’s Energy Transition”.
Rather than fixating solely on renewables, I called for a more pragmatic, inclusive and realistic path – one that balances climate urgency with surging energy demand.
For the Asia-Pacific region, the challenge is particularly acute.
The region accounts for 40 per cent of global energy demand today and is projected to hit 50 per cent by 2050. At the same time, over 150 million people still lack access to electricity, while 350 million more face unreliable supply.
For as long as humans have walked the earth, energy has been the universal enabler for human development.
To address Asia’s growth ambitions even as it aims to achieve net zero, US$88.7 trillion in energy investment will be needed until 2050. Artificial intelligence and digitalisation are accelerating demand.
Electricity demand from data centres is set to reach 945 terawatt hours (TWh) globally by 2030 – more than double from the 415 TWh registered in 2024 and accounting for over 20 per cent of total demand growth in the period.
On these fronts, Asia faces a unique dilemma – surging energy demand driven by rapid economic growth and a burgeoning middle class, set against the urgent need to decarbonise.
In a chapter I contributed to Goldman Sachs’ 1H2025 Sector Outlook last month, I made the point that Asia simply cannot pursue the same transition trajectory as developed economies that can afford to focus predominantly on renewables.
For many countries in the region, energy security and affordability remain non-negotiable.
Unlike some developed nations that can focus solely on renewables, Asia cannot afford to compromise its energy security or economic growth for ambitious, yet potentially unrealistic, climate targets.
This implies a continued – albeit cleaner – role for fossil fuels in the near term, while ramping up investments in renewable and low-carbon solutions. This pragmatic approach must ensure that the transition benefits all segments of society, preventing energy poverty or economic disruption. The latest J.P. Morgan’s strategic brief also reached the same conclusion.
When affordability and security come into play, environmental goals will inevitably take a backseat.
That’s the reality.
The United States (US) government is rightly exiting the Paris Agreement, raising questions over the long-term implications for global climate policy.
The world’s largest economy and its banking giants are opting out of the climate consensus as well.
In a speech at the multilateral institution’s New York headquarters recently, US President Donald Trump had labelled climate change “the greatest con job in the world” and claimed renewables are “a joke. They don’t work.”
While in the conference holding room the other day, I caught up with Indonesia’s climate envoy, Hashim Djojohadikusumo, who confided that his government is rethinking the global climate accord’s usefulness after Washington’s decision to pull out.
Hopes that China would step up to be the leader in battling global warming then appeared to take a hit when its President Xi Jinping said the country would cut its emissions by a measly 7 per cent to 10 per cent.
Still, several energy analysts suggest this could be a case of consciously underpromising in order to overdeliver.
Reducing emissions, evidently, is not a profitable business.
The US will end up with a low-cost structure, while others who try to do the ‘right thing’ may end up being less competitive.
These are the questions every economy has to ask.
Just two years ago, the US government was leading and the world was behind it.
And bear in mind, it’s a high-capex, non-profit-making business when it comes to the environment.
It’s all rhetoric at this point, even on the issue of global warming.
A segment of the scientific community still challenges the assertion that the planet is experiencing measurable warming.
If that rings a bell, you probably read “The slow death of net zero” which came out on January 15 this year. Europe’s politicians wish you’d forget, as the Continent rushes en masse for the climate-policy exits this year.
“Net zero” referred to the ambition to achieve zero carbon-dioxide emissions on a net basis by midcentury for purposes of averting climate change.
Europe used to love this stuff, even though it was perhaps the most preposterous policy idea anyone has ever had.
Undeterred by the costs, industrial carnage, scientific uncertainties and sheer futility of attempting such a thing when China and India refuse, Europe went all in on its war on carbon.
At Energy Asia 2025, one clear message resonated – the global energy transition cannot be a one-size-fits-all race, especially for Asia.
To meet that demand while ensuring energy security, both traditional and new energy systems must co-exist, for now.
To be fair, what we now need is more energy with fewer emissions to serve a growing population,
with a limited runway for the planet’s health, and that investment and spending across both conventional and renewable energy systems continues to be required.
However, there are flawed expectations surrounding energy transition efforts.
Reality has revealed a transition plan that has been oversold and under-delivered for large parts of the world, especially Asia.
Despite predictions of fossil fuel decline, oil demand still exceeds 100 million barrels per day, with no sign of collapsing.
Energy security and affordability have at last joined sustainability as the transition’s central goals.
Pragmatism is replacing idealism and that is a good thing, particularly for Asia.
The goal is not to abandon traditional energy; it is to improve it while expanding new solutions at a realistic pace. In Asia, where coal remains a primary feedstock for power generation, natural gas offers a viable bridge.
A coal-to-gas shift reduces emissions by roughly 40 per cent, delivering meaningful decarbonisation without compromising energy security.
Therefore, global cooperation is crucial for the “just transition” to take place.
As the saying goes, if you want to go fast, you go alone.
But if you want to go really successfully, you go together.
It’s time to put your money where your mouth is.
The transition also must be managed carefully.
We cannot abandon “system A” – fossil fuel-based infrastructure – without building “system B”, the cleaner energy alternative.
There is a dawning realisation, either by policymakers, regulators and even the more informed interested public that we can’t switch overnight when systems are not yet mature.
If we were to switch from a molecule-based to an electron-based energy system, there is the intermediate question of minerals.
Going forward, every barrel produced must be an advantaged one, not only from the perspective of cost but also from the perspective of carbon intensity.
That includes deploying carbon capture and storage, eliminating methane leakages, and deploying floating liquefied natural gas platforms to reduce emissions from hydrocarbons while still meeting demand.
For now, fossil fuels remain the bedrock of the global energy system, just as they were four decades ago.
And if OPEC’s top voice is to be believed, they may not be going anywhere soon.
Global energy giants are ramping up investments in Malaysia and the region, recognising that to meet future energy demand, security can never be downplayed.
Shell PLC has pledged to invest RM9bil in Malaysia over the next two to three years.
TotalEnergies, fresh off its acquisition of SapuraOMV Upstream Sdn Bhd, is now the third-largest operator in Malaysia.
It recently added stakes in multiple gas-rich blocks offshore Sarawak and signed a deal with PETRONAS for Indonesia’s Bobara block.
PETRONAS and Italy’s Eni have formed a joint venture to consolidate selected upstream assets in Malaysia and Indonesia, targeting up to 500,000 barrels of oil equivalent per day.
Japan’s Inpex Corp has returned to Malaysia to explore six blocks offshore Sarawak and Sabah, while ConocoPhillips is eyeing new investments in Sabah.
Medecci Lineil is co-head of Strategic Engineering for Algorithmic Leverage (SEAL), Goldman Sachs’ elite quantitative strategy group within the Investment Banking Division. Any opinions expressed are solely his own and should not be taken as representative of the firm.
