Saudi Crown Prince Mohammed bin Salman is laughing all the way to the bank as oil prices continue to … [+]
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Oil and natural gas-rich countries in the Middle East are embracing net-zero emission targets in yet another sign that Big Oil is willing to play along in tackling climate change.
The question is whether the climate movement is willing to accept the oil industry as a partner in working toward an organized, affordable transition to cleaner energy.
I, for one, am not holding my breath.
The Organization of Petroleum Exporting Countries (OPEC) fixtures Saudi Arabia and the United Arab Emirates (UAE)
UAE
Such developments would have been unheard of just a few years ago since these economies rely so heavily on oil and gas revenues to pay the bills. It shows how intense climate pressure has become and that producers understand the urgency needed to address the issue.
Let’s not forget that we are in the middle of an energy supply crunch, and that Mideast OPEC nations and Russia are now being asked to deliver more oil and gas to cool off soaring prices for energy commodities. The Biden administration, as well as Japan and India, want Saudi-led OPEC to increase oil supply with prices trading over $85 a barrel, while Europe wants Russia to open the taps for more gas to alleviate an unprecedented spike in gas and power prices.
Consumer nations are starting to realize the perils of advancing the low-carbon energy transition too fast. Meanwhile, producer nations are beginning to realize that to remain credible actors on the world stage, they must have a net-zero target.
With the COP26 climate summit about to kick off in Glasgow on Oct. 31, this should be a moment when climate and energy security interests intersect, and nations work toward an orderly, affordable energy transition for everyone.
Instead, climate activists seem ready to label these net-zero targets as the latest example of industry greenwashing and dismiss these producers’ intentions altogether.
It’s true that details of how these producers’ plans to achieve net-zero are relatively scant for now. It’s also true that these producers, which sit on decades worth of oil and gas reserves, will want to preserve the role of oil and gas in the global economy for as long as possible. That’s just common sense.
But it is the greenhouse gas emitted by burning fossil fuels that contribute to climate change, not the fuels themselves. If these producers, which are blessed with oil reserves with naturally low carbon intensity, can reduce emissions and move toward net-zero by midcentury — the same goal that U.S., Europe and China have all set — then they should be viewed as a critical part of the climate solution, not villains.
The details that have come out of the Middle East suggest that these producers will rely on a combination of programs to reduce their carbon footprints, including addressing methane leaks, improving efficiency, investing in renewables, hydrogen, and utilizing abatement strategies like carbon capture and storage (CCS) and nature-based offsets — i.e., planting trees or reforestation — to reduce emissions.
The problem is that climate activists see no role for such abatement strategies because they say it will perpetuate the use of fossil fuels. By denying a role for zero-emissions oil and gas operations, they acknowledge that they are more concerned about ridding the world of fossil fuels than the greenhouse gas emissions that contribute to climate change.
Never mind that the head of the International Energy Agency (IEA), Fatih Birol, acknowledged that “countries will get to Net Zero via different paths” and that “pledges from major fossil-fuel producers, and their implementation, are vital to reach international climate goals.”
Indeed, there is a significant place for CCS in the IEA’s Net Zero by 2050 roadmap.
So don’t expect a warm welcome for Saudi Arabia or the UAE at next week’s Glasgow conference.
After all, Europe’s largest oil majors — who were the first in the industry to commit to net-zero targets in recent years — have been banned from participating in COP26. And European majors, like Shell, BP and TotalEnergies, have gone above and beyond with their net-zero commitments, even promising to slash “Scope 3” emissions, or those emitted from end-use of their products by consumers. What more could COP26 organizers ask of them?
No, Saudi Arabia and the UAE will not suddenly reverse plans to expand their oil production capacity — each by 1 million barrels a day before 2030 — because of their net-zero aspirations. Nor should they, given the supply crunch that has emerged in energy markets.
But don’t expect climate activists at Glasgow to understand the duality of the mission at hand — providing affordable energy in the coming years while working toward the longer-term target of net-zero emissions. The singularity of their intent threatens to perpetuate the current energy crisis for years to come.
