innovate ICEA

Post COVID-19 New World

Khondkar A. Saleque

I t is now a revealing reality that the world will never be the same again after COVID-19 global pandemic is contained and is overcome. IMF (International Monetary Fund) and IEA (International Energy Agency) and other international agencies in their forecasts have indicated major changes in the world order in post COVID.

In the severity of avalanche, COVID-19 has already surpassed all other health pandemics over the past 100 years after the Spanish flu. Many have started considering its telling impacts as similar to what happened as a consequence of the second world war. COVID-19 has spread over 213 countries across all continents except Antarctica with lightning speed and is still rocking. The balance of economic power may shift, many reigning world leaders may have to quit, some major international companies may be liquidated, many developing countries may become poor again. No one can predict when a pandemic will be contained and overcome but surely the combined endeavours of different countries would lead to the discovery of vaccine and agreed decision of the right medicine for combatting COVID-19 would be achieved.

Till such time world community will have to live with COVID-19 unfortunately. Economic recovery and pandemic management will proceed side by side. Human behaviour, day to day activities would change in the new world. The overarching all-round impacts of COVID-19 health pandemics on the Economy, Energy, Trade and Commerce, Civil Aviation & Tourism, Education and Skill Development, Science and Technology is indicating that world order will completely change when the pandemic is over.

The nature and character of the coronavirus are not yet accurately diagnosed, no vaccine has been approved, no direct medicine has also been approved universally. Some countries applying a wellresearched model and strict quarantining and lockdown have successfully tide over, many countries including leading economies of the world are still grappling with the avalanche of the pandemic. Grounding of airlines, severe restrictions on the road, railway, riverine transportation have adversely impacted on economy threatening major global recession. The oil market crash is indicating the negative growth of the Organization

of the Petroleum Exporting Countries (OPEC) and Gulf Cooperation Council (GCC) countries. Developing and underdeveloped countries may be the worst sufferers as the health system must have been almost completely crippled. The economic recession of GCC countries has already caused huge job cuts of expatriate countries mostly from developing countries. If pandemic continues for a while huge food shortage, even famine can not be ruled out. Consequently, all these may lead to a change of government, toppling down of empires. However, among all these significantly reduced uses of fossil fuels for reduced demand has a visible positive impact on the environment. The air is cleaner, the water is free of contamination, birds are making merry, flowers are growing better, wild animals and aquatics are enjoying. World leaders would now better realise why all must now work together to realise less than 2 degree C (if possible, less than 1.5 degree C) global warming by the end of the century to save this mother earth for irreversible damage.

The lessons learned from COVID-19 must encourage world leaders in working together for a decarbonized economy.

Investing more on research and development of renewable energy, contributing more to the Green Climate Fund (GCF) for assisting developing countries in reducing emissions.

Qatar’s real GDP is projected to slip to -4.3 percent in 2020, Oman’s is projected to fall to -2.8 percent compared to 0.5 percent last year. Kuwait is relatively better off in terms of growth outlook in the GCC with a projected growth of -1.1 percent compared to 0.7 percent in 2019.

www.iceaus.org innovate July 2020 / 13

Photo by Kazi Golam Saarwar Shameem

IMF Forecast of Economic Recession

International Monetary Fund (IFF) in its recent World Economic Outlook report has forecasted negative growth of the GCC countries in 2020.The forecast is for a -3.0% growth in 2020.This is much worse than what happened during the global financial crisis in 2009. Countries in the Middle East and Central Asia may experience -2.8% growth. The oil-exporting countries may experience -3.9 percent negative growth. Kingdom of Saudi Arabia may experience -2.3 percent, while the economy of non-oil exporting countries may shrink by 4 percent. UAE economy may experience slip by -3.5 percent. IMF Report Forecast Rebounding in 2021

The IMF has reasons for believing that with countries resuming their economic activities would create increased demand in energy. The economy of the oil exporting GCC countries is forecasted re-bouncing strongly in 2021. IEA forecast states of 4.6 per cent overall in GCC countries. Economy in UAE, Saudi Arabia and Kuwait are projected to grow at 3.3, 2.9 and 3.4 respectively. The economy of Qatar will grow at 5

percent and Oman at 3 percent. Impacts on Developed Economies

Growth in the advanced economy like EU Countries and North America is very adversely affected by major damage done to health care systems. For deployment of containment measures like locking down of the business, the economic growth is projected at –6.1 percent in 2020.

Most economies are forecasted to contract, including the US (–5.9 percent), Japan (–5.2 percent), the UK (–6.5 percent), Germany (–7.0 percent), France (–7.2 percent), Italy (–9.1 percent), and Spain (–8.0 percent). Many large multinational companies would require restructuring, downsizing the operation and curtailing new investments. Impacts on Emerging Economies

Overall, the group of emerging market and developing economies is projected to contract by 1 percent in 2020, excluding China. The growth rate for the group is expected to be –2.2 percent. Most countries would suffer, as their export trade with Western European and North American countries would shrink. The negative growth in GCC countries and other middle east countries would cause huge loss of jobs of unskilled and semiskilled

labour community of developing economies. The remittance these workers send to developing countries would be significantly reduced. COVID-19 Impacts on Energy

COVID-19 dealt a severe blow to the global energy system. Grounding of airlines, huge restrictions of road, rail and waterway transportations and shutting down of mills, factories and businesses from lockdowns caused the oil market crash. Clearly, the pandemic and the ensuing economic lockdown have slashed demand for all fuels, in particular those oil derivatives used for transportation. Energy demand is also down across the board, as large industrial power users, non-essential businesses, schools, and government buildings remain closed. Per the IEA report, in the past 100 days, we have experienced a 6% decline in global energy demand, five times what was lost in the 2008 crisis.

The impact of the crisis on energy demand is heavily dependent on the duration of the lockdown and stringency of measures to curb the spread of the virus.

14 / innovate July 2020 www.iceaus.org

Implications of Oil Market Crush

Oil market crush from never experienced extremely low demand for energy, including oil, gas, coal and electricity, severely impacted oil majors and other companies involved in the energy industry and its value chains.US shale boom got the unbelievable rude shock from West Texas Intermediate (WTI) dropping a one-time horrifying price point - $36.The oil market crash has not only affected the USA, Saudi Arabia and Russia, but badly hurt war-ravaged Libya, sanctioned Iran, poorly managed Venezuela, the war devastated Iraq/

Depleted natural gas price to all-time low throughout Asia and Western Europe has created an oversupply in the global market of LNG. This resulted in power prices falling across the developed economy. In some countries, it reduced almost half of the pre COVID-19 period. Renewable energy capacity showed expansion, solar PV and wind energy started getting competitive with gas in some countries. The IEA report stated prices of electricity have dipped below zero in the United States and in several countries in Europe –including Germany, Denmark and France.

One must appreciate that electricity supply security during and after the COVID-19 pandemic is a dire necessity for the continued functioning of supply chains, teleworking, and powering the health care sector for fighting against COVID-19.

Renewable energy supply however is unique in the sense that it does not require a supply chain for fuel inputs. But it adds stress to the system for variable nature. The higher the penetration of renewable energy in modern electricity networks, the more flexibility, storage capacity, and smart grid capacity is required to manage sudden spikes in demand. Otherwise, there are possibilities of blackouts. Positive Impacts

COVID-19 among many adverse impacts has one very

visible positive development. Carbon emissions have fallen at a very noticeable rate due to economic lockdown creating avenues for a green energy transition. But for it takes a sustainable shape requires global commitment and definite plan. Many still believe from past experience that the decline of fossil fuel use and a parallel decrease of CO2 emission may be a temporary phenomenon. In 2010, the world recovered from the then the Great Recession witnessed the highest year to year CO2 emission. The same may be repeated in 2021-22. What World Community Must Do

The world cannot confront, combat and tide over COVID-19 without keeping the lights on. All must realize now that bold, visionary leadership and technical expertise are essential for turning the crisis into opportunity. The future energy world has to be cleaner, greener, resilient and abundant.

We must not lose sight. It is once in a millennium opportunity. The world will never be the same again. For the survival of humanity, alleviation of global poverty, secured health care system, the achievement of sustainable modern power supply to all at affordable costs for sustainable growth and development world community must act together. COVID-19 has delivered a great lesson that none can avoid the consequence of the global pandemic. We must put our acts together and fight together with whatever we have. Health habits must change, social distancing must become part of life, all have to additional guarded against harming the environment. Tele education, distance learning, telemedicine, telemarketing, artificial

intelligence, block chain, robotics, use of drones, GIS, smart grid, the smart metering meaning world must completely move to digitization. Money spent in research and development of weapons of mass destruction must be directed to medical research, innovation in energy generation, greening the mother earth and research in agriculture. All must realize nature will strike back with a vengeance if we continue to harm it. The world with all sophistication is well and truly helpless when nature bounces back.

The author is the Advisory Editor of Innovate magazine. He was former Director (Operation) Gas Transmission Company Limited, Petrobangla Bangladesh. He also served as Advisor for Ministry of Mines and Petroleum Afghanistan. He is Contributing Editor of Energy& Power Magazine (www.ep-bd.com) and the Chief Advisor, International Council for Engineers Australia.

www.iceaus.org innovate July 2020 /15

Post COVID-19 New World

Khondkar A. Saleque

In the severity of avalanche, COVID-19 has already surpassed all other health pandemics over the past 100 years after the Spanish flu. Many have started considering its telling impacts as similar to what happened as a consequence of the second world war. COVID-19 has spread over 213 countries across all continents except Antarctica with lightning speed and is still rocking. The balance of economic power may shift, many reigning world leaders may have to quit, some major international companies may be liquidated, many developing countries may become poor again. No one can predict when a pandemic will be contained and overcome but surely the combined endeavours of different countries would lead to the discovery of vaccine and agreed decision of the right medicine for combatting COVID-19 would be achieved.

Till such time world community will have to live with COVID-19 unfortunately. Economic recovery and pandemic management will proceed side by side. Human behaviour, day to day activities would change in the new world. The overarching all-round impacts of COVID-19 health pandemics on the Economy, Energy, Trade and Commerce, Civil Aviation & Tourism, Education and Skill Development, Science and Technology is indicating that world order will completely change when the pandemic is over.

The nature and character of the coronavirus are not yet accurately diagnosed, no vaccine has been approved, no direct medicine has also been approved universally. Some countries applying a wellresearched model and strict quarantining and lockdown have successfully tide over, many countries including leading economies of the world are still grappling with the avalanche of the pandemic. Grounding of airlines, severe restrictions on the road, railway, riverine transportation have adversely impacted on economy threatening major global recession. The oil market crash is indicating the negative growth of the Organization

of the Petroleum Exporting Countries (OPEC) and Gulf Cooperation Council (GCC) countries. Developing and underdeveloped countries may be the worst sufferers as the health system must have been almost completely crippled. The economic recession of GCC countries has already caused huge job cuts of expatriate countries mostly from developing countries. If pandemic continues for a while huge food shortage, even famine can not be ruled out. Consequently, all these may lead to a change of government, toppling down of empires. However, among all these significantly reduced uses of fossil fuels for reduced demand has a visible positive impact on the environment. The air is cleaner, the water is free of contamination, birds are making merry, flowers are growing better, wild animals and aquatics are enjoying. World leaders would now better realise why all must now work together to realise less than 2 degree C (if possible, less than 1.5 degree C) global warming by the end of the century to save this mother earth for irreversible damage.

The lessons learned from COVID-19 must encourage world leaders in working together for a decarbonized economy.

Investing more on research and development of renewable energy, contributing more to the Green Climate Fund (GCF) for assisting developing countries in reducing emissions.

Qatar’s real GDP is projected to slip to -4.3 percent in 2020, Oman’s is projected to fall to -2.8 percent compared to 0.5 percent last year. Kuwait is relatively better off in terms of growth outlook in the GCC with a projected growth of -1.1 percent compared to 0.7 percent in 2019.

International Monetary Fund (IFF) in its recent World Economic Outlook report has forecasted negative growth of the GCC countries in 2020.The forecast is for a -3.0% growth in 2020.This is much worse than what happened during the global financial crisis in 2009. Countries in the Middle East and Central Asia may experience -2.8% growth. The oil-exporting countries may experience -3.9 percent negative growth. Kingdom of Saudi Arabia may experience -2.3 percent, while the economy of non-oil exporting countries may shrink by 4 percent. UAE economy may experience slip by -3.5 percent. IMF Report Forecast Rebounding in 2021

The IMF has reasons for believing that with countries resuming their economic activities would create increased demand in energy. The economy of the oil exporting GCC countries is forecasted re-bouncing strongly in 2021. IEA forecast states of 4.6 per cent overall in GCC countries. Economy in UAE, Saudi Arabia and Kuwait are projected to grow at 3.3, 2.9 and 3.4 respectively. The economy of Qatar will grow at 5

IMF Forecast of Economic Recession

percent and Oman at 3 percent. Impacts on Developed Economies

Growth in the advanced economy like EU Countries and North America is very adversely affected by major damage done to health care systems. For deployment of containment measures like locking down of the business, the economic growth is projected at –6.1 percent in 2020.

Most economies are forecasted to contract, including the US (–5.9 percent), Japan (–5.2 percent), the UK (–6.5 percent), Germany (–7.0 percent), France (–7.2 percent), Italy (–9.1 percent), and Spain (–8.0 percent). Many large multinational companies would require restructuring, downsizing the operation and curtailing new investments. Impacts on Emerging Economies

Overall, the group of emerging market and developing economies is projected to contract by 1 percent in 2020, excluding China. The growth rate for the group is expected to be –2.2 percent. Most countries would suffer, as their export trade with Western European and North American countries would shrink. The negative growth in GCC countries and other middle east countries would cause huge loss of jobs of unskilled and semiskilled

labour community of developing economies. The remittance these workers send to developing countries would be significantly reduced. COVID-19 Impacts on Energy

COVID-19 dealt a severe blow to the global energy system. Grounding of airlines, huge restrictions of road, rail and waterway transportations and shutting down of mills, factories and businesses from lockdowns caused the oil market crash. Clearly, the pandemic and the ensuing economic lockdown have slashed demand for all fuels, in particular those oil derivatives used for transportation. Energy demand is also down across the board, as large industrial power users, non-essential businesses, schools, and government buildings remain closed. Per the IEA report, in the past 100 days, we have experienced a 6% decline in global energy demand, five times what was lost in the 2008 crisis.

The impact of the crisis on energy demand is heavily dependent on the duration of the lockdown and stringency of measures to curb the spread of the virus.

Implications of Oil Market Crush

Oil market crush from never experienced extremely low demand for energy, including oil, gas, coal and electricity, severely impacted oil majors and other companies involved in the energy industry and its value chains.US shale boom got the unbelievable rude shock from West Texas Intermediate (WTI) dropping a one-time horrifying price point - $36.The oil market crash has not only affected the USA, Saudi Arabia and Russia, but badly hurt war-ravaged Libya, sanctioned Iran, poorly managed Venezuela, the war devastated Iraq/

Depleted natural gas price to all-time low throughout Asia and Western Europe has created an oversupply in the global market of LNG. This resulted in power prices falling across the developed economy. In some countries, it reduced almost half of the pre COVID-19 period. Renewable energy capacity showed expansion, solar PV and wind energy started getting competitive with gas in some countries. The IEA report stated prices of electricity have dipped below zero in the United States and in several countries in Europe –including Germany, Denmark and France.

One must appreciate that electricity supply security during and after the COVID-19 pandemic is a dire necessity for the continued functioning of supply chains, teleworking, and powering the health care sector for fighting against COVID-19.

Renewable energy supply however is unique in the sense that it does not require a supply chain for fuel inputs. But it adds stress to the system for variable nature. The higher the penetration of renewable energy in modern electricity networks, the more flexibility, storage capacity, and smart grid capacity is required to manage sudden spikes in demand. Otherwise, there are possibilities of blackouts. Positive Impacts

visible positive development. Carbon emissions have fallen at a very noticeable rate due to economic lockdown creating avenues for a green energy transition. But for it takes a sustainable shape requires global commitment and definite plan. Many still believe from past experience that the decline of fossil fuel use and a parallel decrease of CO2 emission may be a temporary phenomenon. In 2010, the world recovered from the then the Great Recession witnessed the highest year to year CO2 emission. The same may be repeated in 2021-22. What World Community Must Do

The world cannot confront, combat and tide over COVID-19 without keeping the lights on. All must realize now that bold, visionary leadership and technical expertise are essential for turning the crisis into opportunity. The future energy world has to be cleaner, greener, resilient and abundant.

We must not lose sight. It is once in a millennium opportunity. The world will never be the same again. For the survival of humanity, alleviation of global poverty, secured health care system, the achievement of sustainable modern power supply to all at affordable costs for sustainable growth and development world community must act together. COVID-19 has delivered a great lesson that none can avoid the consequence of the global pandemic. We must put our acts together and fight together with whatever we have. Health habits must change, social distancing must become part of life, all have to additional guarded against harming the environment. Tele education, distance learning, telemedicine, telemarketing, artificial

intelligence, block chain, robotics, use of drones, GIS, smart grid, the smart metering meaning world must completely move to digitization. Money spent in research and development of weapons of mass destruction must be directed to medical research, innovation in energy generation, greening the mother earth and research in agriculture. All must realize nature will strike back with a vengeance if we continue to harm it. The world with all sophistication is well and truly helpless when nature bounces back.

The author is the Advisory Editor of Innovate magazine. He was former Director (Operation) Gas Transmission Company Limited, Petrobangla Bangladesh. He also served as Advisor for Ministry of Mines and Petroleum Afghanistan. He is Contributing Editor of Energy& Power Magazine (www.ep-bd.com) and the Chief Advisor, International Council for Engineers Australia.