Debunking the Truth About Green Energy: Interview with Oil and Gas Expert Igor Makarov

The debate between traditional oil and gas resources and green alternatives continues to shape the energy sector’s approach to power and sustainability. The Intergovernmental Panel on Climate Change’s (IPCC) 2023 Synthesis Report casts a stark light on the profound and rapid transformations occurring across the earth’s atmosphere, oceans, cryosphere, and biosphere. These changes, primarily driven by human activities, influence weather and climate extremes globally. 

The consequences are far-reaching and detrimental, spanning from escalating climatic hazards and exposure of millions to severe weather events to acute food and water insecurities. These challenges directly impede progress toward the Sustainable Development Goals (SDGs) and contribute to an increased frequency of extreme heatwaves, heavy rainfall, droughts, tropical cyclones, and a rise in species extinction. Such developments heighten the vulnerability of both human and ecological systems.

This alarming scenario prompts a shift in policy and strategy among global leaders and organizations, compelling them to explore innovative approaches to mitigate these impacts effectively. A critical juncture in this endeavor was the recent United Nations Climate Change Conference (COP28), held from November 30 to December 13 in the United Arab Emirates. This summit culminated in a pivotal agreement, heralding what many perceive as the “beginning of the end” of the fossil fuel era. The gathering of nearly 200 participating nations in Dubai lays the foundation for a rapid, just, and equitable transition towards sustainability, emphasizing substantial emissions reductions and increased financial support. 

It also initiated the world’s first ‘global stocktake’ — intensifying climate action before the decade’s end to maintain the global temperature rise within the 1.5°C threshold. This initiative focuses on bolstering countries’ resilience to climate change, augmenting climate finance, and broadening international participation in these efforts.

As nations grapple with energy security and environmental stewardship complexities, green energy emerges as a crucial element in the global discourse. In a conversation with Forbes, Cyprus entrepreneur and oil and gas expert Igor Makarov provides an insightful perspective on this topic. He delves into the current landscape and prospects of green energy, challenging established beliefs and contributing a sophisticated and nuanced understanding of this essential subject.

Can you briefly describe your background in the oil and gas industry and how it has shaped your perspective on green energy?

I have been in the oil and gas industry for the past 30 years. But if I look back, I can say that it was a coincidence that I found myself in the gas business. Initially, after quitting professional sports in the late 1980s, I started making my first steps in business in the early 1990s, and it was not gas. This was when the history of my first international company, ITERA, started.

I registered ITERA in Cyprus and the USA, and my first endeavors were to bring food supplies from the USA, New Zealand, etc., to my homeland – Turkmenistan. The point is that following the collapse of the USSR, Turkmenistan became an independent country and needed various consumer goods to provide food security for its people. It was a time of high risks because of the complicated financial situation in former USSR republics. But risk comes with opportunities, which was the case for me, too.

Turkmenistan could not pay for food supplies in cash and used petroleum products as a payment, so it was a barter market. At a certain point, petroleum products were insufficient to cover the fees for the food my company supplied. This is when Turkmenistan, having the fourth largest gas reserves in the world, suggested making a payment in the form of natural gas.

In 1995, my company, ITERA, started supplying gas to Ukraine in exchange for the products required by Turkmenistan, which Ukrainian factories and plants produced. Gas was supplied directly to many Ukrainian enterprises, thus contributing to the economic recovery of Ukraine, which, as a newly independent country after the collapse of the USSR, faced a difficult economic situation. Gas was supplied directly to Ukrainian enterprises in the chemical sector, metallurgical complexes, power plants, and other critical social facilities such as kindergartens, hospitals, etc.

Further, we expanded the supply network to other countries of the former USSR, and up until the early 2000s, ITERA supplied Turkmen gas to many countries like Uzbekistan, Kazakhstan, Ukraine, Moldova, Belarus, Georgia, Armenia, Azerbaijan, Latvia, Lithuania, etc. So, this engagement of my first international company, ITERA, played an essential part in my experience in the oil and gas business until I reached a crucial juncture and sold ITERA in 2013.

Considering my previous business experience, I decided to try new business endeavors. This was when I established a new Europe-based company, ARETI International Group in 2015 to invest in businesses in various industries, primarily across Europe and North America.

When I say my previous experience, I mean not only the gas business. The point is, about 15 years ago in Spain I got my first investing experience in a green energy project. We were engaged in establishing a solar energy project in the mountains with our German partners. Why in the mountains? The thing is that if you run quartz batteries in places where it is warm, their efficiency decreases, so you need cold because quartz heats up a lot. The closer you get to heat, the more the efficiency drops. At that time, this project was a very modern technology as there was no such hype around green energy in the world yet; it had not yet become mainstream.

In this context, we were one of the pioneers in the development of green energy. Comparing my time before and the present day, the situation was different. Today, many green energy projects, both wind and solar, operate based on a system of grants and subsidies from the state. That project at that time was not about business, but rather about, I would say, adventurous if not charitable endeavor. Therefore, over time, we eventually withdrew from it.

These experiences built my foundation in the oil and gas industry and made me realize that the green energy sector is more complex than it seems, with many things to consider for its progress and development.

Nevertheless, we understand that the climate change agenda persists, calling for more green initiatives from business leaders. For the past five years, we have considered various green energy projects, including other clean energy sources such as hydrogen. Unfortunately, our plans were put on hold and we have not had a chance to invest in those projects yet.

But my team is fully committed to tackling this challenge. We are optimistic that, soon, we will resume our green energy initiatives and collaborate with various organizations to discover additional methods of contributing to sustainable energy solutions.

Many countries and organizations are making significant contributions to champion green energy. What do you think of these efforts? Are we getting any actual results?

The fact that governments and companies are promoting green energy is, of course, necessary so that all people realize that this is the way to go and develop it further. Moreover, if we look at the history of mankind, 30-50 years ago, we could not even imagine what modern technologies we could use today. In this regard, cooperation between scientists and practitioners in developing science, technology, and business is essential. 

New scientific approaches are certainly also drivers of this process. But the fact is that in life, theory and practice are often very different from each other. New technologies imply the creation of the necessary infrastructure and social paradigm shifts. 

How do you see the economic implications of a shift towards green energy, especially for countries heavily reliant on oil and gas exports?

Well, I think, as far as the implications of the transition to green energy are concerned, that change is undoubtedly actively underway right now. Speaking about countries heavily dependent on oil and gas exports, we must consider the balance of different energy sources. 

If we take, for example, electricity consumed by people in general for personal use, the green energy component for this consumption maybe 5%, a maximum of 10%. As for oil and gas, they cannot be considered only as a component of energy. Without oil and gas, developing chemicals and other industry types is impossible. And what is chemistry today? If you look at everything surrounding us, from clothes, paintwork, plastic products, and houses and car interiors, they are all made of oil and gas.

What common misconceptions or myths about green energy need to be addressed? Should the public know any hidden environmental or economic costs or concerns?

There is a lot of talk about green energy in the media and among politicians and officials, who may not have as detailed an understanding of business economics. A more profound discussion about green energy is needed, but it should not be positioned as if it will replace other energy sources tomorrow. 

I just think that by doing that, they are misleading many people. You have to be realistic about the development of green energy. I believe that today, green energy is instead auxiliary because the overall energy balance, whether you like it or not, depends on the key sources – oil, gas, and coal. That is why I assume nuclear power will play an essential role in the medium term.

Considering the infrastructure built around oil and gas, how feasible is it for nations to pivot to green energy in terms of investment and restructuring?

Today, the world’s infrastructure is primarily built for the oil and gas component of the energy sector. However, with the development of green energy, significant investments will be needed to build infrastructure for green energy as well. But this will depend entirely on how the green energy sector develops. If it develops actively, the other part of the energy balance will be reorganized accordingly. But given that we will need twice as much energy in the next 25-30 years, we will not go away from oil and gas. 

With the global push towards green energy, what do you foresee as the future of the oil and gas industry in the next decade? Given your expertise in oil and gas, how do you view the transition to green energy? Is it possible? Do you see it as an inevitable shift, or do you believe there’s a middle ground where both can coexist?

The future of oil and gas depends to some extent on how other forms of energy, including green energy, will develop. Due to the growing world population and the need for more energy, all types of energy will be in demand. 

I recently watched an interview with Elon Musk, who is one of the triggers for the development of green energy globally. In his opinion, by 2050, the world will need at least two times more energy. And where are we going to get it? Whether we want it or not, oil, gas, and coal will still be used, but the future shows the development of green energy. It’s an open question, but the general trend is clear. In this regard, I think that nuclear power will play a significant role during the transition period. 

And oil, gas, and coal will probably remain at least within the limits they have now. It will continuously be developed as hydrocarbons are used in the energy sector and other sectors of the economy. In my opinion, the share of green energy will gradually increase in the overall energy balance unless there is some cardinal energy revolution and people find some alternative energy source, for example, from space.

With that, in the near foreseeable future, whether anyone wants it or not, we will not get away from the oil and gas industry, as it is the backbone of today’s energy sector. If we look at the energy balance of the world economy, we see that oil and gas account for more than 50% of it. That is why when I see green energy realistically, without rose-colored glasses, it cannot be the only energy source; it is necessary but still needs to be developed. 

Unfortunately, this development is a prolonged process, and it will affect the use of other energy carriers, such as oil and gas because they are used not only for energy but also in other areas. Of course, no one expects that a miracle can happen. But new technologies will likely allow it to be produced and used more efficiently and even squeeze the oil and gas industry. But based on current realities, the development of green energy is a very long process, which should go in parallel with using other energy sources so as not to create shocks and disruptions in the energy market.