Planned expansions of fossil fuel production to use 200% of carbon budget, says UN
Dec 07 2023
The United Arab Emirates, hosts of COP28, is under scrutiny for its state oil company's vast expansion plans, which starkly contrast with global climate goals. Sultan Al Jaber, CEO of the Abu Dhabi National Oil Company (Adnoc) and president of COP28, is at the centre of what researchers call a significant conflict of interest, given the company's plans to considerably ramp up oil and gas production.
This development comes at a time when the world faces a crucial juncture in climate policy. The annual rise in global temperatures, alongside the extreme impacts of weather events, underscores the urgency for significant reductions in fossil fuel use and a pivot towards renewable energy sources. However, the plans laid out by major fossil fuel producers, including Adnoc, seem to be moving in the opposite direction.
Recent data from the Global Oil and Gas Exit List (Gogel) paints a concerning picture. The database, covering over 1,600 companies, reveals an industry-wide trend of expanding fossil fuel production, disregarding the established 1.5C global temperature limit. This expansion includes a staggering $170 billion spent on new oil and gas exploration since 2021 and over a thousand companies planning new gas infrastructure projects. Such trends are at odds with scientific consensus and the urgent need to mitigate climate impacts.
The UN's recent warnings are alarming, indicating that current fossil fuel production plans could exceed the planet's carbon budget by two times. This scenario, termed as "insanity" by experts, would significantly jeopardize humanity's future and the possibility of tackling the climate crisis effectively. The need for keeping most of the existing oil, gas, and coal reserves underground is clear, yet the steps towards this goal remain inadequate.
Nils Bartsch, head of oil and gas research at NGO Urgewald, emphasizes the critical need for a swift and managed decline in oil and gas production to maintain the possibility of limiting global warming to 1.5C. Yet, the current trajectory set by the industry points towards what he describes as a bridge to climate chaos. Bartsch strongly criticizes Al Jaber's dual role, highlighting the apparent conflict of interest in his position at the helm of climate negotiations while overseeing significant fossil fuel expansion plans.
In response to these concerns, Adnoc argues that global energy demand necessitates continued reliance on oil and gas, and claims to produce some of the world's least carbon-intensive fossil fuels. This stance reflects a broader industry perspective, viewing fossil fuel as a necessary component of the global energy mix, even as the world grapples with the imperative of transitioning to renewable energy.
The situation is further complicated by Al Jaber's leadership roles in both the UAE's renewable energy company, Masdar, and as the nation's climate envoy. While some figures, including US climate envoy John Kerry, support Al Jaber's appointment, others express scepticism regarding his ability to effectively lead climate negotiations given his ties to the fossil fuel industry.
The analysis of the Gogel database, using data from industry-standard provider Rystad, aligns with the latest net zero scenario by the International Energy Agency (IEA). This scenario indicates that to stay within the 1.5C limit, no new oil and gas production can occur after 2023, a benchmark that Adnoc's expansion plans significantly exceed.
The situation is not isolated to the UAE. Other major fossil fuel producers, such as Saudi Aramco, QatarEnergy, and ExxonMobil, are also planning expansions that overshoot the 1.5C limit. The revised IEA scenario necessitates a sharper annual decrease in oil and gas production and factors in future stranded assets, highlighting the economic risks inherent in these expansion plans.
The expansion of global Liquified Natural Gas (LNG) capacity, especially in the US, is another concerning trend. Despite analysis suggesting that LNG may be more polluting than coal, there are plans for a 162% increase in global LNG export capacity, primarily driven by projects along the US Gulf coast.
With COP28 underway, the world's attention will be on how these contrasting agendas play out, and whether nations can align their energy policies with the urgent need to combat the climate crisis. The role of petrostates in this dynamic is particularly crucial, as they hold significant sway over global fossil fuel production and, consequently, the planet's climate future.
As the UN Secretary-General António Guterres starkly puts it, governments doubling down on fossil fuel production spells double trouble for people and the planet. With the carbon emissions budget now alarmingly tiny, the time for decisive action and a concerted move towards clean energy has never been more critical.
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