Home Business Integrating fossil interests and climate initiatives – big steps for the UAE

Integrating fossil interests and climate initiatives – big steps for the UAE

by SuperiorInvest

Cradle of oil and gas.

United Arab Emirates
United Arab Emirates
(United Arab Emirates) is in 7th placeThursday in oil production in 2021 (Figure 1). In the Middle East, only Saudi Arabia and Iraq are higher. The UAE is a small country by population, which is why its per capita oil production is so high. Kuwait and Qatar are also small countries with high oil production per capita.

Of the 7 largest oil producers, the Middle East has three: Saudi Arabia, Iraq and the UAE. The Middle East is truly the cradle of oil and gas production.

However, the Middle East is not known as a trendsetter for its transition from fossil fuels to renewable energies, as evidenced by countries in Europe, for example. It therefore comes as a surprise that the chairman of the next annual United Nations climate conference, COP28, is from the UAE.

ADNOC is the state-owned oil and gas company of the United Arab Emirates. It is rated #9 in 2022 in oil and gas financing rankings – one step ahead of ExxonMobil
XOM
at 10

Let’s look at ADNOC’s recent activities in oil and gas development and compare it to their growing climate initiatives.

ADNOC fossil fuel expansion.

ADNOC is to buy a 25% stake in OMV, an oil, gas and chemicals company based in Austria, for just over $4 billion. It was announced in December 2022.

This is a small part $150 billion in spending from 2023-2027 approved by ADNOC’s board of directors to be used for a new division of the company that will address (1) international growth and (2) low-carbon solutions.

The European natural gas market will also focus on ADNOC as gas shutdowns by Russia, such as the Nord Stream 1 pipeline, have increased gas imports to Europe. Just last week, Germany opened its new import terminal for LNG (liquefied natural gas).

The United Arab Emirates is 13th on the list LNG exporting countries in 2021. But that is only a twelfth of what the leading country, Australia, exports. It is clear that the UAE has a lot of potential here as it ranks 9th in total gas reserves.

ADNOC decarbonisation initiatives.

A larger part of the 150 billion dollars is earmarked for this decarbonisation of the oil and gas industry. By 2030, $15 billion will be directed towards investments in clean energy alternatives and electrification, carbon capture and storage (CCS), and international partnerships.

This is part of their November 2022 commitment to achieve zero greenhouse gas (GHG) emissions by 2050. The company says it will cut its carbon footprint by a quarter by 2030. CCS capacity by 2030. By comparison, Rystad Energy predicts that for net zero by 2050, global CCS will need to reach 8 billion tons of greenhouse gases per year. Every little bit helps, of course, but the world will need it millions from small pieces.

COP28 will be chaired by the CEO of ADNOC.

Given this background, it comes as a surprise to many that the CEO of major oil and gas company ADNOC has been appointed President of the COP28 UN Climate Assembly December 2023 in Dubai, United Arab Emirates.

His name is Sultan Ahmed Al Jaber and he is also the country’s Minister of Industry and Advanced Technology. COP28 will clarify how far other countries will have to go in cutting their emissions.

Is it a conflict of interest? The oil and gas industry contributes 57% of the world’s energy, but also about 50% of the world’s greenhouse gases.

If climatologists insist that the world must cut oil and gas production quickly, how can an oil company boss push this at the COP28 meetings? One proposal is for Al Jaber to step down as head of ADNOC immediately.

The conflict culminated at COP27 in Glasgow, when 80 countries supported a gradual reduction in oil and gas production, strongly opposed by countries that depend on oil and gas exports. Note that the conference agreed to phase out coal, the dirtiest of fossil fuels.

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

Another answer is who better to lead the COP28 event than Al Jaber who has and is pushing forward the integration of energy security and climate protection?

Takeaway food.

Yvo de Boer was the UN climate chief from 2006 to 2010. He said The UAE has adopted a “sound green growth strategy” and is a major investor “in renewable energy at home and abroad”. ADNOC follows this strategy.

Despite this, COP 28 in Dubai will be a boxing ring of debates between the need for fossil fuels and the need to eliminate 73% of global greenhouse gas emissions from burning fossil fuels.

There is a conflict of interest and the COP28 chairman, Sultan Ahmed Al Jaber, who is also the CEO of ADNOC, will receive criticism from both sides.

It 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 not controlled as the earth warms by 2100. higher than in the last million years.

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