Thursday, March 23, 2023

OPEC Urges ‘Big Picture’ Approach to Oil as COP 28 Chair Rejects Conflict Accusations

The oil executive who will lead this year’s United Nations climate talks has responded to fears that fossil fuel interests are hijacking the process: his “top priority” is to keep the 1.5°C goal alive, he said, a week after cautioning that the world still needs oil to “bridge from the current energy system to the new one.”

“I have no intention whatsoever of deviating from the 1.5°C goal,” Sultan Al Jaber, the United Arab Emirates climate envoy, CEO of the Abu Dhabi National Oil Company (ADNOC), and recently-appointed president of the COP 28 summit, told Reuters.

“Keeping 1.5°C alive is a top priority and it will cut across everything I do.”

The problem is that the narrow window to limit warming at 1.5°C—the goal of the 2015 Paris Agreement—is rapidly closing, with only about a dozen years remaining at humanity’s current rate of emissions before it shuts, according to a 2021 assessment by the Intergovernmental Panel on Climate Change (IPCC). Plus, analysis by the International Energy Agency (IEA) shows that the 1.5°C goal is only possible by phasing out fossil fuel development now.

Keeping Oil in the ‘Big Picture’

But the Organization of Petroleum Exporting Countries and its allies (OPEC+)—of which COP 28 host UAE is a member and third-largest producer—has rejected the IEA’s findings, accusing the agency of being biased in its views on climate change. That would be a new experience for the Paris-based agency, which is has much more routinely faced concerns that it gave short shrift to 1.5°C pathways and underestimated the rise of low-carbon energy.

OPEC Secretary-General Haitham Al Ghais recently urged countries to invest much more in oil to meet the world’s future energy needs, reports BNN Bloomberg. The oil and gas industry has been “plagued by several years of chronic underinvestment,” he said last weekend at an energy conference in Cairo, though data shows that government support for fossil fuels worldwide almost doubled to $697.2 billion in 2021, up from $362.4 billion in 2020.

Last week, the IEA put those subsidies at a record $1 trillion for 2022, Bloomberg writes.

Al Ghais, an oil executive from Kuwait, said the industry would need annual investments worth US$500 billion out to 2045.

“It is imperative that all parties involved in the ongoing climate negotiations pause for a moment: look at the big picture,” he said. These parties must “work towards an energy transition that is orderly, inclusive and helps ensure energy security for all.”

The UAE’s hosting of COP 28 will serve as “a fresh opportunity to explore inclusive, sustainable, and consensus-based solutions to climate change,” he added.

Fossils in the Mix

That’s the line Al Jaber maintains, as well, even as critics fume at the competing interests of leading a national oil company and steering the global transition off fossil fuels.

“It is not a conflict of interest,” Al Jaber insisted in early February, reported Reuters. “It is in our common interest to have the [fossil] energy industry working alongside everyone on the solutions the world needs.”

He added: “The UAE COP presidency is listening and ready to engage.”

But Al Jaber also warned that cutting out oil too soon would cause prices to spike, worsening global energy poverty. “The world still needs hydrocarbons and will need them to bridge from the current energy system to the new one,” Al Jaber said. “We cannot unplug the current energy system before we have built the new one.”

The path forward is to “only invest in the least carbon-intensive barrels and continue to reduce their intensity,” he added, with nations aiming to raise spending on technologies including carbon capture, nuclear power, and hydrogen.

“Spending on these fundamental enablers of decarbonization is less than 5% of what is spent on renewables,” he said. “This must change.”

ADNOC chair since 2016, Al Jaber is “far from being your average oil executive,” Karim Elgendy, a fellow on Middle East environmental issues at Chatham House, told the New York Times. “He has been spearheading the UAE’s climate action well before and during his tenure as the head of Abu Dhabi’s national oil company.”

Al Jaber also happens to be the founding CEO and chair of the UAE’s global renewable investment company Masdar, which is heavily involved in the green transition. He told Reuters it was that experience that got him the lead role at ADNOC, with a mandate to “transform, decarbonize, and future-proof” the oil company.

Dialing Up Renewables

In latest news on Masdar’s rising star, Taqa—the UAE’s largest power utility, and also the biggest shareholder in Masdar’s solar and wind business—is looking to issue several hundred million dollars in green bonds this year, reports Bloomberg.

The company will likely purchase some US$50 billion in wind and solar assets by 2030 and hold stakes in at least 100 gigawatts of power by then, up from 20 GW today.

Five gigawatts will be built in Angola, Uganda, and Zambia, based on agreements under Etihad 7, the UAE’s global development fund launched last year, aiming to provide 100 million people across Africa with 20 GW of clean electricity by 2035, says PR Newswire.

These new agreements come one year after Masdar signed a 2-GW renewable energy agreement with Tanzania, and just two months after the company partnered with Egypt on a 10-GW onshore wind project—one of the largest in the world.

Masdar and Cairo will also be partnering on green hydrogen projects, for a combined electrolyzer capacity of 4 GW by 2030, with an annual output of 480,000 tonnes of green hydrogen in the works. ADNOC is Masdar’s main partner in its green hydrogen ambitions.

But none of this means tightening the crude oil spigot. Currently pumping roughly 3.4 million barrels of crude every day, ADNOC plans to bump that figure up to five million barrels by 2027—rather than 2030 as previously planned. To this end, the oil company will be investing $150 billion, up $23 billion from last year’s financing target, notes OilPrice.

An ‘Arms Dealer to Lead Peace Talks’

As the UAE doubles down on fossil fuels, climate activists continue to cry foul over Al Jaber’s appointment as COP president. “You wouldn’t invite arms dealers to lead peace talks,” said UK-based Global Witness. “So why let oil executives lead climate talks?”

In late January, more than two dozen Democratic members of congress petitioned United States climate envoy John Kerry to ask for Al Jaber’s removal, reported Reuters. Kerry previously endorsed Al Jaber, saying he was a “terrific choice” as head of a national oil company that knows it needs to transition.

One of the petition signatories, Sen. Sheldon Whitehouse (D-RI), said “time is getting short to solve the climate crisis and COP is the only venue for finding international agreement on how to get it done. These conversations need to happen free from the malign influence of the fossil fuel industry.”

Such fears grew when Politico reported the main COP 28 team was operating out of an Abu Dhabi office building right near ADNOC headquarters. Worsening the optics: the building is used by the UAE’s Ministry of Industry and Advanced Technology, a portfolio that Al Jaber also holds.

The secretariat of the UN Framework Convention on Climate Change (UNFCCC) wrote to the COP 28 presidency enquiring about the independence of the office. On its list of concerns was whether ADNOC had access to COP 28 meetings and documents, whether the IT system being used by the presidency was separate from that used by the ADNOC office, and whether presidency employees were being paid by the oil company.

The COP Presidency assured the UNFCCC that its office arrangements were only temporary, pending a move to a dedicated space by the end of January.

“There are clear governance guidelines in place to ensure the team can operate entirely independently from any other entity,” the Presidency said in a statement. “Funding for the team and its activities have been entirely provided by the UAE government.”

But then in February, the Guardian revealed that at least a dozen ADNOC employees appeared to have been hired on to Al Jaber’s COP team.

Blurring the Lines

“Among the officials are two former ADNOC engineers who will act as negotiators on behalf of the UAE at the conference, despite their LinkedIn profiles suggesting they may not have a background in international climate diplomacy,” the Guardian wrote. “Meanwhile, senior executives at the oil company have been ‘tasked with supporting’ the UAE’s role as hosts of this year’s conference.”

ADNOC has also been seeking to hire someone who could “liaise between COP 28 office and relevant UAE embassies abroad,” according to a job posting.

It is this “potential for blurred lines” between the UAE’s fossil industry and the COP team that is sparking concern, writes the Guardian.

Plus, fossil revenue underwrites the UAE’s “ability to provide jobs for citizens and invest in its economic diversification plans—including renewable energy projects themselves,” reports the Times. And yet, it is vowing to work “hand in hand” with the renewable industry, with Al Jaber using that exact phrase in a mid-January meeting with the Abu Dhabi-based International Renewable Energy Agency (IRENA).

As if reading from the playbook Al-Ghais used in Cairo, Al Jaber declared: “In short, we will leave no stone unturned in the pursuit of inclusive climate progress.”

Climate organizations around the world are having none of it, reports Common Dreams. Ten days after Al Jaber’s meeting with IRENA, the Kick Big Polluters Out network wrote a letter to UN Secretary-General António Guterres, UNFCCC Executive Secretary Simon Stiell, and all parties to the UNFCCC, decrying Al-Jaber’s appointment.

“There is no honour in appointing a fossil fuel executive who profits immensely off of fueling the climate crisis to oversee the global response to climate change,” the network said. The fact that “such a move could ever be seen to be legitimate amidst an intensifying climate crisis where millions of lives and ecosystems are on the line exemplifies just how insidious Big Polluters’ stranglehold over climate policy is.”

Gadir Lavadenz of the Demand Climate Justice campaign said polluters “cannot be placed on a leadership pedestal” and warned that the UNFCCC “is undermining its already weak international trust year after year.”

How the UAE Can Build Trust

Former UNFCCC executive secretary Christiana Figueres has declined to assume that Al-Jaber’s proximity to fossil interests puts him beyond the pale of climate leadership.

A COP presidency is, above all, about political leadership, Figueres wrote in a New Statesman op-ed, describing such leadership as Al Jaber’s to seize, or forfeit.

Writing that she was grateful to him for leading sustainability efforts in his own country and playing a bridge-building role internationally, she urged Al Jaber now to “rise above his work on the national stage and embrace his new international responsibilities.”

She urged the same of the UAE, suggesting that paths to “model climate leadership” could include:

• Shifting from a strategic vision that is not compliant with a 1.5° future to a legislated 2050 net-zero goal;

• Committing to support Barbados Prime Minister Mia Mottley’s proposal to direct 1% of fossil profits to a global loss and damage fund; and

• Supporting “an international phasedown of fossil fuels, ensuring 2023 is a turning point in which countries boost their climate goals.”

“This is the historically decisive decade in which we must leave fossil fuels behind,” Figueres writes. “And while it is admittedly not easy to successfully combine sincere openness to all positions with deep commitment to an ambitious outcome, the future of humanity requires that the UAE and Al Jaber strive to meet the challenge.”

This article first appeared in The Energy Mix, and is republished under a Creative Commons license.

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