Integrating fossil interests and climate initiatives – a major move for the UAE

The cradle of oil and gas.

United Arab Emirates
United Arab Emirates
(United Arab Emirates) ranked #7^day Oil production in 2021 (Figure 1). In the Middle East, only Saudi Arabia and Iraq rank higher. The UAE is a small population, which is why their per capita oil production is so high. Kuwait and Qatar are also small countries with high per capita oil production.

Among the top seven oil-producing countries, there are three in the Middle East: Saudi Arabia, Iraq and the United Arab Emirates. The Middle East is indeed the cradle of oil and gas production.

However, the Middle East is not a well-known trendsetter in the transition from fossil fuels to renewable energy, such as European countries. So it comes as a surprise that the next UN climate conference, COP28, will be chaired by the UAE.

ADNOC is the UAE’s state-owned oil and gas company.ranked #9 in Oil and Gas Finance 2022 – One step ahead of ExxonMobil
XOM
At #10.

Let’s take a look at ADNOC’s recent activity in growing oil and gas and compare it to their growing climate initiative.

ADNOC expansion of fossil fuels.

ADNOC will acquire a 25 percent stake in Austria-based oil, gas and chemicals company OMV for just over $4 billion. This was announced in December 2022.

this is a small part $150 billion in spending 2023-2027 Approved by the ADNOC Board of Directors, it will be used for a new corporate division that will address (1) international growth and (2) low carbon solutions.

The European gas market will also be in focus for ADNOC, as gas import prices in Europe rise due to gas closures in Russia such as the Nord Stream 1 pipeline. Just last week, Germany opened a new LNG (liquefied natural gas) import terminal.

The UAE ranks 13th in the list countries that export liquefied natural gas 2021. But that’s just one-twelfth of the exports from top country Australia. Clearly, the UAE has a lot of potential here, as they rank 9th in terms of total gas reserves.

ADNOC Decarbonization initiatives.

Most of the $150 billion goes to Decarbonizing the oil and gas industry. $15 billion to invest in clean energy alternatives and electrification, carbon capture and storage (CCS), and international partnerships by 2030.

This is part of their November 2022 pledge to achieve net zero greenhouse gas (GHG) emissions by 2050. The company says it will reduce its carbon intensity by a quarter by 2030. The company also said it would increase its carbon emissions to 5 million tonnes. CCS capacity to 2030. In contrast, Rystad Energy predicts that by 2050 global CCS will need to reach 8 billion tons of greenhouse gases Per year. Of course, every little bit will help, but the world will need million a little bit.

COP28 will be chaired by the CEO of ADNOC.

Given this backdrop, it was surprising to many that the chief executive of ADNOC, a major oil and gas company, was named Chairman of the United Nations COP28 Climate Conference To be held in Dubai, UAE in December 2023.

His name is Sultan Ahmad Jaber and he is also the country’s Minister of Industry and Advanced Technology. COP28 will shed light on how far countries need to go to limit emissions.

Is this a conflict of interest? The oil and gas industry contributes 57% of the world’s energy and approximately 50% of the world’s greenhouse gases.

If climate scientists are insisting that the world needs to cut oil and gas production quickly, how can the heads of oil companies push this at COP28? One suggestion is that Al Jaber resign immediately as head of ADNOC.

The conflict reared its head at COP27 in Glasgow, when 80 countries backed a phase-out of oil and gas, which was strongly opposed by countries dependent on oil and gas exports. Note that the meeting did agree to phase down coal, the dirtiest of the fossil fuels.

One answer to that question is that Al Jaber is also chairman of a company called Masdar, a state-owned renewable energy company that Al Jaber founded himself.

Another answer is, who better to lead the COP28 campaign than Al Jaber who has been and is driving the integration of energy security and climate security?

takeout.

Ivo de Boer served as UN climate chief from 2006 to 2010. he said The UAE has adopted a “sound green growth strategy” and has been a major investor in “renewable energy both domestically and abroad”. ADNOC is following this strategy.

Nonetheless, COP 28 in Dubai will see a lively debate between the need for fossil fuels and the need to eliminate 73% of the world’s greenhouse gas emissions from burning fossil fuels.

There is an apparent conflict of interest, and COP28 Chairman and ADNOC CEO Sultan Ahmed Al Jaber will be criticized by both sides.

He will need support from “integrators” — those who understand that oil and gas will continue to be needed for energy security and those who understand the potential for climate catastrophe — especially if greenhouse gas emissions are left unchecked, and the planet will shrink by 2100. reach a temperature higher than levels seen in the past million years.