“This report must sound a death knell for coal and fossil fuels, before they destroy our planet,” said United Nations Secretary-General António Guterres, referring to the long-awaited UN report on climate change released in August.
The concentration of carbon dioxide in the atmosphere is at its highest level in at least 4 million years. Human activities have already warmed the planet by roughly 1.1 degrees Celsius since the pre-industrial period. Global warming has already had irreversible environmental impacts, which have happened and are happening much faster than had been predicted, and future carbon emissions are expected to accelerate global warming and sea level rise even more.
Despite the unequivocal evidence of harm, the fossil fuel industry roars on. Fossil fuels accounted for 81% to 91% of the world’s emissions caused by human activity between 2010 and 2019, and the world’s largest exporter of oil refuses to back away. “We are still going to be the last man standing, and every molecule of hydrocarbon will come out,” Saudi Arabia’s Energy Minister Abdulaziz bin Salman reportedly said during a private event in June 2021.
“This is a shockingly irresponsible thing to say,” commented Lorne Stockman, research director for Oil Change International, a Washington-based advocacy group opposing fossil fuels.
Saudi Arabia’s actions are ranked “critically insufficient” on the Climate Action Tracker website, which means its actions are on a trajectory for global mean temperature increase greater than 4 degrees Celsius by 2100.
To be sure, Riyadh has company. Russia and Argentina are also marked “critically insufficient” while China ranks “highly insufficient” and Australia and the EU are ranked “insufficient”, to name a few more examples. All these and others are, in short, leading straight for a world where the global mean temperature increase is greater than 3 degrees this century.
The Saudi smokescreen
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A widening gap in narrative between western nations and the oil-rich kingdom reveal two antinomical worldviews, in appearance at least. The West talks about low carbon-societies powered by renewables, while Saudi Arabia has been arguing that carbon capture, utilization and storage (CCUS) will allow the oil era to be prolonged.
“Carbon is not the enemy …. with the circular carbon economy, carbon will be an opportunity,” Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman bin Abdulaziz said in 2019. Saudi Arabia suggests that captured carbon dioxide can be stored underground in geologic formations, “sunk” into forests, or converted into consumable products, like fertilizers or concrete.
Anas Alhajji, an independent oil analyst and adviser to oil-producing governments, said if importers of crude oil rate CO2 emissions as a primary source of concern, the kingdom is now in a position to answer: “Fine, we will go for carbon sequestration. Problem solved.”
Indeed Saudi Arabia has been tapping the notion of the “circular carbon economy” - a concept endorsed in 2020 by leaders of the G20 – to portray itself as a global responsible actor committed to tackling climate change. As said, Saudi Arabia has company. Qatar, the world’s biggest supplier of liquefied natural gas, also said its mega-LNG expansion project will be equipped with CO2 capture and sequestration systems to “supply the world with the clean energy it needs”.
But carbon capture is controversial and gas is not clean either. Its production emits methane, a greenhouse gas that remains in the atmosphere for only about 12 years but has a global warming potential 84 times that of carbon dioxide over two decades.
According to Alhajji, Middle Eastern oil-producing countries have managed to distract the public from their activities by drawing attention to the dirtiest of all fossil fuels, coal.
“That was a major success because everyone is now talking about coal, and who is defending coal? China, India, Australia. It is no longer about Arabs, it is no longer about the Gulf, it is no longer about Saudi Arabia,” Alhajji says. For instance, British Prime Minister Boris Johnson said, “Consign coal to history” following the publication of the UN report in August, but hasn’t presented a policy to reduce England’s energy consumption.
Critics argue that CCUS are smokescreens intended to maintain the status quo: Carbon sequestration and similar techniques remain unproven and expensive.
“It is a false solution,” Stockman says. “The fossil fuel industry talks about this technology as if it is perfect all the time, but it underperforms, leaks, breakdowns and does not hit targets.”
Doubletalk in the West
Meanwhile, global CO2 emissions are, if anything, ramping up, and are projected to reach 33 gigatons in 2021. Global oil demand is set to return to its pre-pandemic level by the end of 2022, about 100 million barrels per day, as raging consumerism continues to drive demand for fuel, as well as products derived from petroleum, such as plastics.
Environmentalists argue this is a mere spike because the electrification of mobility signals a generational shift towards clean energy. In August, US President Joe Biden called for half of passenger vehicles sold in the world’s largest economy to be electric by 2030. However, it raises the question of how clean is the electricity that powers those cars as carbon-intensive power plants fired by coal, natural gas and oil produced more than 60% of the electricity in the United States in 2018.
Ironically, days later, Biden urged the Organization of the Petroleum Exporting Countries, including Saudi Arabia, to boost output to guarantee Americans access to affordable energy.
In oil-exporting countries, Biden’s double talk leaves many doubting the seriousness of western declarations about reform. Mohammad Al Sabban, a retired former adviser to Saudi Arabia’s petroleum minister who called the UN climate panel “the center of Climate Mafia” in a tweet now deleted, said the “climate game” is directed towards one greenhouse gas, CO2, in an attempt to “transfer the whole burden to oil exporting countries.”
“How dare the Biden administration block drilling of oil on federal lands and waters in the U.S. and then ask OPEC to produce more? If Gulf states export more oil, that means they are left to carry a big carbon burden, especially that they are ranked among the highest emitters of CO2 per capita,” Alhajji said.
“To be honest, I am far more upset about the political lack of guts to confront the oil industry here in the U.S. and the power of its lobby than I am about Saudi Arabia,” Stockman said.
Indeed, Saudi Arabia’s bold pro-oil statements are the tree that hides the forest as Western leaders’ climate-conscious discourses largely fall short of action.
A staggering 83% of the funds allocated to COVID-19 economic recovery in 38 OECD countries, mainly in the west, either do not consider environmental dimensions or reverses progress on some, according to the OECD itself.
Swedish environmental activist Greta Thunberg accused world leaders of engaging in “role playing” and “playing with words” while continuing to support fossil fuels. “The gap between your rhetorics and reality keeps growing wider and wider,” she said.
On the shores of the Persian Gulf, the reputation-sensitive Gulf Arab states are starting to weigh the reputational damage of being perceived as fossil fuel hardliners. The United Arab Emirates could become the first nation among the OPEC countries to set a net-zero goal to balance emissions produced and emissions taken out of the atmosphere, Bloomberg reported.
But meanwhile, as the world brutally wakes up to the reality of climate change, the region is playing both sides of the fence, trying to maximize profits until the last drop of oil while eying business opportunities in the new forms of energy.
The hydrogen conundrum
The prospect of a green and blue hydrogen market - an energy carrier obtained by splitting water molecules using electrolysis powered respectively by renewables or natural gas - attracts the Gulf states’ covetousness.
The UAE and Oman have launched national alliances that focus on blue hydrogen to leverage gas reserves and sell a fuel touted as low-emissions. But a study by Stanford University professor Mark Jacobson and Cornell University professor Robert Howarth found that the greenhouse gas footprint of blue hydrogen is actually more than 20% greater than burning gas or coal.
Stepping down as chairman of the UK Hydrogen and Fuel Cell Association, Chris Jackson said: “I would be betraying future generations by remaining silent on that fact that blue hydrogen is at best an expensive distraction, and at worst a lock-in for continued fossil fuel use.”
Back in Saudi Arabia, it has revealed plans to build the world’s largest green hydrogen plant powered by solar and wind energy in its futuristic city Neom. The sunshine-rich country plans to generate 50% of its electricity from renewables by 2030, from just 0.02% in 2019. In August 2021, it connected to its power grid the Middle East’s biggest wind farm, which is expected to power up to 70,000 Saudi households when completed.
Yet the chemical and petrochemicals industry remains the Gulf second-largest manufacturing sector, producing up to $108 billion worth of products a year. Saudi Arabia’s chemicals maker SABIC reported its highest quarterly net income in almost a decade in August, reinforcing the business case for converting oil into plastics and products. But producing plastic also has a significant carbon footprint.
According to Alhajji, Gulf states are reacting to threats over demand for crude oil by switching to what the industry calls ‘oil to materials’. “Basically what they say is: ‘ok, you do not want to import oil from me because you want to switch to electric vehicles, fine, I am going to make sure that most of the cars’ parts are made from my oil and gas’.”
Sebastian Castelier is a journalist who covers Gulf Arab economies, societies and political systems in the transition era. His work has appeared in several Middle Eastern and international media outlets. Twitter: @SCastelier