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As the Russian invasion of Ukraine has severely disrupted energy supplies, fossil fuel producers reacted to efforts to address climate change by urgently phasing off the burning hydrocarbons.
A series of summits held in the United Arab Emirates this week addressed the threat from climate change. They acknowledged that it is necessary to shift away from fossil fuels and towards cleaner sources of energy if global temperatures are to remain stable.
However, there are some glaring problems with how and when this can be achieved. To produce fossil fuels, there is a need for more investment in oil and natural gas.
“We definitely at this time need to include all available resources,” UAE Minister of Energy Suhail al-Mazrouei said at an energy forum in Dubai.
“We cannot ignore or say we are going to abandon certain production. It’s just not the right time, whatever reason you have,” he said, adding that doing so would make energy prices too high for millions around the world.
It was a drumbeat that reverberated throughout Dubai during the week. It represented the prominent voice that fossil fuel producers seek to have in the global discussion on climate change. It was heard at the Atlantic Council Global Energy Forum, a World Government Summit and a UAE-sponsored event. Climate Week in Partnership with the United Nations.
OPEC Secretary-General Mohammad Sanusi Barkindo said at the upcoming UN climate talks, known as COP27, in Egypt and next year’s COP28 in the UAE, producers can address issues around “inclusiveness to ensure no sector is left behind, to address the issue of investment in the industry and to reassess the conversation”.
He said limiting global temperature rise to no more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) and the role of oil and gas “are not mutually exclusive”. Scientists believe that warming will continue beyond this level of warming, even though it is less than the amount experienced in pre-industrial times. People around the world are exposed to extremes.
‘Radical action’
Even the slightest increase of global temperatures will only make the situation worse as extreme weather events such as superstorms and forest fires and floods are becoming more common in countries around the globe.
Proponents of increasing fossil fuel investments repeatedly cited current high oil and gasoline prices as evidence of the world’s need for oil to support their argument. There was even some ridicule when it became apparent that countries like the United States, United Kingdom and others were calling for fossil fuel use reductions in the long-term, while also pleading for more oil for lower prices for consumers.
The UN’s Intergovernmental Panel on Climate Change and other international bodies have said that to address climate change there should not be new investments in fossil fuel infrastructure, the fossil fuels most responsible for climate change must phase out over time.
This was also reiterated in This week, a 350-page Report by the International Renewable Energy Agency that said the world must take “radical action” by investing $5.7 trillion each year through 2030 to shift away from fossil fuels. IRENA, headquartered Abu Dhabi in the UAE, said that $700bn should be diverted from hydrocarbon sectors each year.
“The energy transition is far from being on track and anything short of radical action in the coming years will diminish, even eliminate, chances to meet our climate goals,” said Francesco La Camera, the director-general of IRENA, when the report came out.
Scientists claim that global greenhouse gas emission must fall by 45 percent in the next decade, compared with 1990 levels. Recent data however show that total emissions have not fallen by 45 percent compared to 1990 levels. Emissions are increasing, not decreasing amid rising energy demand and the expansion of fossil fuel use.
‘Energy security first and foremost’
OPEC predicted that more oil would be needed in 2040 and beyond. This was especially true for Asia.
Brent crude is $105 a bar, the highest price in eight years. Russian invasion in UkraineIt has shaken the energy sector.
“Look at what is happening today. Who’s talking about climate change now? Who’s talking about attending to energy security first and foremost?” said Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman at the World Government Summit in Dubai.
He stated that countries will lose their ability to fight climate change if they don’t have energy security.
‘Must not unplug’
The International Monetary Fund’s Managing Director Kristalina Georgieva encouraged advanced economies to meet the goal of providing $100bn a year in climate finance to developing countries. She made the remarks this week at Dubai’s World Government Summit, where she unveiled an IMF paper titled, Feeling the Heat, about adapting to climate change in the Middle East.
The argument made repeatedly by Sultan al-Jaber, who is both the UAE’s special envoy for climate change and managing director of Abu Dhabi’s state-owned oil company, is that the energy transition will take time. He said that the world will require more oil and gas over that time.
“Put simply, we cannot and we must not unplug the current energy system before we have built the new one,” he said at the energy forum.
He spoke at the UN-backed climate conference and said that the push to get rid of hydrocarbons has caused a supply crunch.
Al-Jaber, in his dual roles of climate change envoy as well as head of ADNOC (the state-owned oil & gas company), symbolises both the UAE’s two paths. The country has made a commitment to zero emissions within its borders by 2050. It is also committing to increasing oil and gas export production. The country’s commitments do not apply to the emissions from burning that fuel.
Al-Jaber summed up this dual track, saying the UAE is expanding production capacity of what he dubbed “the world’s least carbon-intensive oil to over five million barrels per day” and its natural gas capacity by 30 percent. The UAE is also planning to invest $160bn to develop renewable energy in order to meet its net-zero pledge.
‘Futile investments, stranded assets’
Saudi Arabia, which has pledged to have net zero emissions by 2060, is doing the same domestically and vowing not to stop pumping oil until it runs out. As Gulf Arab countries face rising temperatures, humidity, and water scarcity that threaten food security, their production capacity is increasing.Life in the Middle East.
Antonio Guterres, UN Secretary General, has called for an end of private sector financing for coal power. The numbers reached record heights last year.
“Lenders need to recognize that coal and fossil fuels are futile investments that will lead to billions of dollars in stranded assets,” he said.
With countries such as the United States ramping up domestic fossil fuel production amid energy price hikes and fears of supply shortages because of Russia’s war in Ukraine, Guterres urged governments not to delay the shift away from fossil fuels.
“The current crisis shows that we must accelerate, not slow, the renewable energy transition,” he said. “This is the only true path to energy security.”
