Abandoning fossil fuels for renewable energy is counterproductive. First, optimize fossil fuel reserves to avoid stranded assets -Senyo Hosi

Stranded Assets: Resources that once had value or produced income but no longer does often because of changes in technology and other external factors.

The CEO of the Ghana Chamber of Bulk Oil Distributors is cautioning decision-makers in Africa’s oil and gas space not to abandon fossil fuel exploitation to pursue heavy investments into renewable energy like western nations are doing but first consider optimizing resources. He cautioned against prematurely devaluing viable resources that would not be in the interest of the development of the continent.
Mr. Hosi was speaking at the UNU-INRA webinar series on the theme “Covid-19 and fossil fuels in Ghana – What is the future of hydrocarbon resources sector, post-pandemic?” on Wednesday, July 1, 2020.
Senyo Hosi stressed that while youth unemployment is one of Africa’s biggest problems, the continent can maximize industrialization which would create jobs among others, by expanding usage of fossil fuels and other natural resources to improve socio-economic development and improve lives.
“Africa is consuming about 15GJ/h [i.e. energy consumption per person] and the whole of North America is [consuming] about 240GJ/h, it really tells you the gap we need to cover to really give our people a real future. Trying to diversify from fossil fuels may not necessarily be the answer. I don’t think when the key input for what you really need as energy has the price dropping, it’s time for you to run away from that input. It’s rather a time to embrace the input. We need cheaper fuels, so cheaper oils will actually give us cheaper fuels. Our effort shouldn’t be on managing stranded assets, it should actually be on AVOIDING stranded assets.”
Hosi, an oil and gas expert said that Africa cannot abandon its significant fossil fuel reserves and follow western nations’ prognosis to problems associated with climate change and stranded assets.
“If you look at our reserves-to-production ratio as Africa we are in our 40s, Europe is 11, 11 years more and they’re practically done with all their fossil fuel reserves. Why do you think they would actually want to promote fossil fuels? We have about 42 years more to utilize our fossil fuel reserves. If we don’t utilize them in time and they become stranded we would have made big fools of ourselves and we would have missed a major economic transition opportunity.”
Senyo Hosi charged African leaders pursue solutions that fit the continent with regard to the usage of natural resources and refrain from imitating European solutions that may be costly and make no socio-economic sense.
“It’s time for Africa to look within. Europe is investing heavily in renewable energy, but it’s not time for Africa to start thinking about that. Let them [western countries] carry on with the technology but Africa must optimize its resources, not focus on resource diversification.”
Other speakers at the webinar were Antonio Pedro – SRO-EA Director, Fatima Denton – UNU INRA Director), Rose Mwebaza – Climate Technology Centre & Network (CTCN), Director Daria Ivleva – Adelphi, Project Manager, Selam Kidane – African Group of Negotiators, Legal Advisor, James Murombedzi- United Nations Economic Commission for Africa (ECA) ACPC, Chief and Stephen Yeboah, African Development Bank (AfDB) – African Energy Portal, Policy and Research Analyst.
The fossil fuel webinar series was organized by the United Nations University Institute for Natural Resources in Africa.