“By 2040, I believe hydrocarbons will remain the key component in the energy balance as no one has yet found anything to compare with hydrocarbons in terms of capacity. And in terms of availability, there is so far nothing to compete with hydrocarbons,” Sorokin told the main plenary session of the Tyumen oil and gas forum, dubbed ‘The future is today – new possibilities for the industry.’
“Renewal sources and hydrogen could well account for up to 30 percent of the energy balance compared to about 12-15 percent now.”
Wednesday’s plenary session was chaired by the Sergey Brilev, Deputy General Director of the Rossiya television channel and President of the Global Energy Association. It was Brilev who raised the question about the future role of hydrogen.
Sorokin said it was too early, from the standpoint of technological development, to say whether hydrogen could replace oil or gas as a fuel source.
“But we see the colossal funds being channelled to this sector in the European Union, the United States, Japan and China. It is clearly this sector that will undergo development.”
Sorokin said Russia was in a good potential position to occupy an appropriate market niche once the technology proves ready.
“In the first instance, we have gas – a source of ‘blue hydrogen’. And our task, as a country, made possible by our energy strategy, is to make use of the potential provided by our energy resources to ensure that investment flows generated in other countries, cost-free funds, make their way as much as possible to our country.”
Sorokin said the availability of what amounts to cost-free capital was an important factor in the development of renewable energy resources.
Central banks the world over, he said, had offered many “easing” opportunities to boost economies since 2008, including an easing of key interest rates, and this had distorted energy markets considerably.
“The phenomenon we see today of shale oil was largely made possible by the fact that shale oil companies had access to unlimited financing,” Sorokin told the gathering.
“For practically 10 years, they generated a negative cash flow and produced no profitability for shareholders. By the same token, this largely allowed for the development of renewable energy. But the phenomenon is interesting because if you finance a loss-making sector or loss-making technology for 10 or 15 years, sooner or later they will achieve such great volumes or a technological network that they will become profitable.”
This, Sorokin said, had been the case with shale oil technology, Tesla “and the case of many companies working in the field of renewable energy”.
But hydrocarbons, he said, remained the foundation of the Russian budget and the national economy.
“They will still be a colossal resource for the next 10 to 15 years and we will have to make use of them,” he told participants.