One is that the world ceases to burn oil and gas in order to reduce heat-trapping emissions. This would shake the foundation of their economies. The other is that global temperatures continue to rise, threatening to make unlivable large swathes of the already hot Gulf terrain.
Profits from fossil fuels are the foundation of political stability in the six Gulf countries — Saudi Arabia and the United Arab Emirates as well as Qatar, Kuwait, Bahrain, Kuwait, Bahrain, Bahrain, Kuwait, Bahrain, Oman, Qatar, Kuwait, Kuwait, Bahrain, Kuwait, Bahrain, Oman, Qatar, Kuwait, Kuwait, Bahrain, Kuwait, Bahrain, Oman, Qatar, Kuwait, Kuwait, Bahrain, Kuwait, Bahrain, Oman, Qatar, Kuwait, Kuwait, Bahrain, Kuwait, Bahrain, Oman, Qatar, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Kuwait, Saudi Arabian, as well as, they have their political stability. This includes the exports that India and China, both energy-hungry countries, will need even more in the coming decades.
Jim Krane, author “Energy Kingdoms”: Oil and Political Survival In the Persian Gulf, said that climate action is almost a problem for absolute monarchies based on oil exports.
They need climate action to succeed, without destroying the oil market. This is a difficult needle to thread.
By pledging “net zero” emission targets, as Saudi Arabia, UAE, and Bahrain did this month, greenhouse gases emissions would be reduced within their borders, while fossil fuel exports are maintained abroad.
Saudi Arabia, which supplies approximately one-tenth the world’s oil needs, announced its decision this week, while hosting its first major conference on climate change. Saudi Arabia’s Crown Prince Mohammed bin Salman has set 2060 as its target.
This was a significant announcement for a country that has 265 billion barrels worth of oil reserves, which is valued at $22.5 trillion at current price. Saudi Arabia has stated its determination to continue pumping oil until the end, but it may not be able to find any use for its most precious natural resource in a world where renewable and solar energy is cleaner.
The oil revenue has been used by the Gulf monarchies to expand their influence, maintain domestic support and buy regional clout. This money has helped build national armies, provided free health care, higher education, subsidized fuel, land for building homes, marriage dowries, and generous pensions to citizens, and also allowed them to purchase regional clout.
This patronage system is essential for the Gulf monarchies to be able to either allow more political participation or become more restrictive, according Krane, an energy research fellow at Rice University’s Baker Institute for Public Policy.
Gulf Arab states pledging “net zero” emissions are positioning themselves to be part of the multi-trillion-dollar clean energy industry, even as they keep earning from oil and gas.
John Kerry, President Joe Biden’s climate envoy, spoke to a room full of princes and prime minsters from the region at the Saudi Green Initiative Forum, Riyadh. He said that climate action could create the “largest market opportunity the world’s ever seen.”
Kerry stated, “It’s a major transformation that has ever occurred on this planet since the industrial revolution, but if it happens, it’s the greatest,”
Ellen Wald, a senior fellow with the Atlantic Council, and author of “Saudi Inc,” said that the “net zero” pledges allow the Gulf’s ruling class to exert influence at conferences such as COP26 where climate action policies are being formulated.
She stated, “It is important for them to have seats at the table and be taken seriously during these conferences… because that’s how they get a voice.”
According to leaked documents, Saudi Arabia is among several countries that lobby behind the scenes for the COP26 summit to modify the language around emissions. They are apparently trying to soften an upcoming U.N science panel report on global heating.
Privately and publicly, the Gulf Arab states support carbon capture technologies over a rapid phasing-out of fossil fuels. They warn that a hurry transition would leave poorer people without energy.
Greenpeace, which obtained leaked documents, criticised the approach. It said these “yet unproven carbon capture technologies” allow nations to emit more greenhouse gasses based on the optimistic assumption that they can be pulled out of the atmosphere later.
Saudi Aramco and Abu Dhabi’s ADNOC, as well as Qatar Petroleum, are continuing to make efforts to reduce greenhouse gas emissions and increase investments in petrochemical products that are used in fertilizers, rubber, and other polymers in great demand worldwide.
Aramco, the world’s largest oil company, declared it would achieve “net zero” by 2050, a decade earlier than the Saudi government’s promise. ADNOC pledged to reduce its greenhouse gas emissions by 25% before 2030.
Qatar Petroleum already sent one cargo of LNG gas that is carbon neutral to Singapore. According to the Arab Gulf States Institute, Washington, Qatar Petroleum will also be using carbon capture technology to expand its operations.
Sultan Al-Jaber, CEO of ADNOC, spoke at the forum in Riyadh. He urged people to be “a bit mature, sober” when discussing the energy transition. He stressed that it will take time, and must include oil-and-gas.
Al-Jaber stated that “We cannot just suddenly come out of nowhere and talk about energy transition without fully acknowledging or underestimating the impact of oil & gas in helping to meet global energy needs.” He noted that 60% of total energy demands currently comes from fossil fuels.
OPEC predicts that although there will be a decline in oil demand in certain parts of the world due to the push for renewable and alternative energy, oil will still remain the No. Through 2045, it will remain the world’s No. 1 energy source. According to the report, only 20% of the estimated 2.6 billion vehicles on the road by 2045 will be powered by electric motors.
All six Gulf states are still heavily dependent on fossil fuels to fund their state spending. However, they have taken steps to diversify their economies with Saudi Arabia and UAE leading the charge to attract investment into new industries.
Saudi Arabia still makes more than half its revenue from oil. This is despite the fact that prices for oil have risen to $85 per barrel.
Krane stated that oil exports are vital to the Saudi economy as well as the Saudi political system. “It would be disastrous for Saudi Arabia if other countries stopped using oil.”
Scientists believe the world needs to invest in renewable energy to limit global warming to 2.7°F (1.5°C). However, a U.N. report has found that even new pledges by governments are not enough to prevent temperature rises above that level by the end century.
Nearly all the global warming can be attributed to the emissions of heat-trapping gasses like carbon dioxide and methane. Scientists warn that if this limit is exceeded, the damage could be irreversible.
Qatari Energy Minister Saad Al-Kaabi asked reporters this month if countries with “net-zero” pledges have a plan for getting there.
“For me to just say, ‘Net zero 2050’. He said it was very sexy. He said, “It looks very sexy in the newspaper, but it isn’t the right thing.”
