Global economic uncertainty means oil prices – and your fuel bill – will continue to surprise us all this year. Let us hear what Carole Nakhle says about it.
Oil prices have confounded expectations in the first quarter of 2023. Brent – a major global benchmark – hit a low of US$72 (£58) a barrel on March 17, while the world’s other main benchmark, WTI, dropped to less than US$66 a barrel. This is a far cry from the nearly US$114 and US$103 a barrel, respectively, reached on the same day a year before following the invasion of Ukraine by Russia, a major oil producer.
These unexpectedly low prices remain even as the war in Ukraine continues with no clear end in sight. Other developments have also failed to boost prices as expected. China, the world’s largest importer of crude oil, abandoned its zero-COVID policy in December 2022, creating expectations that Chinese oil demand would quickly return with a vengeance, propelling prices higher. A couple of months before this, OPEC+ (the cartel of certain oil-producing nations) had announced a production cut of 2 million barrels a day (mb/d) – roughly 2% of world supply and the largest cut since 2020.
But oil has now started to retreat again, an unexpected development during a war involving a major oil exporter, and at a time when a giant consumer like China is reopening after three years of economic isolation.
This shows that oil price forecasts continue to be unreliable. The economic outlook and Chinese consumption growth are key to demand expectations, while Russia is the wild card in terms of supply. Until uncertainty around these three factors dissipates, global oil markets will not have a clear direction.
Oil price movements:
US Energy Information Administration, Bloomberg, Author provided
Economic outlook
Oil demand is closely linked to economic growth because a slowing economy shrinks income, leading people to curtail expenditure and travel less, and slowing down manufacturing that uses oil. Various economic forecasts have recently highlighted the major challenges facing the global economy, but widely prevailing uncertainty seems to top the list.
In its April 2023 World Economic Outlook, the International Monetary Fund (IMF) emphasised a high level of uncertainty “amid financial sector turmoil, high inflation, ongoing effects of Russia’s invasion of Ukraine, and three years of COVID”.
The World Bank has also warned that “a lost decade could be in the making for the global economy” as “nearly all the economic forces that powered progress and prosperity over the last three decades are fading”.
April’s OPEC+ Monthly Oil Market Report kept its forecast for economic growth and oil demand largely unchanged from previous reports, but said: “The global economy will continue to navigate through challenges including high inflation, higher interest rates particularly in the Eurozone and the US, and high debt levels in many regions.” It stated that “these uncertainties surrounding current oil market dynamics” were behind its decision to cut production.
Prince Abdulaziz bin Salman Al Saud (centre), minister of energy, industry and mineral resources of the Kingdom of Saudi Arabia, speaks at an OPEC press conference in Vienna, Austria, October 5 2022. Christian Bruna/EPA-EFE
The China factor
China is the world’s second-largest oil consumer and the second-largest economy after the US. So all eyes have been on its oil demand since the country ended the nearly three-year zero-COVID policy that severely restricted its peoples’ mobility and economic activity.
Today, it is the main bullish factor in many global economic forecasts. The IMF’s managing director recently said:
China this year is going to contribute about one-third of global [economic] growth. We calculated that 1% more growth in China translates into 0.3% more growth for the economies that are connected to China.
The IEA believes China will account for half of the global increase in oil demand this year. Goldman Sachs expects China’s oil demand growth to boost Brent by roughly US$15 per barrel.
However, such enthusiasm is not universally shared. A Citibank report says China’s post-COVID recovery seems slower than expected. Being an export-driven economy, the Asian powerhouse is exposed to the health of the rest of the world. A weakening global economy will reduce demand for Chinese exports, with negative repercussions on its economy and therefore oil demand.
Similarly, China’s National Bureau of Statistics said “the external environment is even more complex, inadequate demand remains prominent and the foundation for economic recovery is not solid yet”. Or, as the Saudi energy minister reportedly said when asked about an oil demand rebound recently: “I’ll believe it when I see it.”
Russia: not done yet
As a major oil producer and exporter, Russia also has a massive influence on global oil markets. Despite sanctions since the beginning of the war in Ukraine (and following the annexation of Crimea in 2014), Russia continues to be the world’s third-largest oil producer after the US and Saudi Arabia.
When Russia invaded Ukraine, oil prices spiked due to fears of a loss of Russian supply. The IEA warned the resulting 3 mb/d loss (around one-third of Russia’s total and almost 3% of world production) could produce “the biggest supply crisis in decades”. Analysts from investment bank JP Morgan said Russia could cut up to 5 mb/d of production driving global oil prices to a “stratospheric” US$380 per barrel.
Such gloomy scenarios did not materialise. Russian oil continued to flow but changed direction from Europe to Asia, helping to ease price pressure for consumers everywhere. And Russia’s cuts in retaliation for sanctions have so far been smaller than expected. Of course, it could cut more, especially if this would put more economic pressure on the west and affect support for Ukraine.
This cocktail of uncertainties should encourage a more cautious stance when it comes to predicting oil prices, this year at least. Some analysts have already reduced their 2023 price forecasts, with estimates varying between US$81 and US$100 a barrel.
Expect more revisions. As one study that tracked the evolution of oil prices over four decades said: “all price expectations are subject to error”.
to celebrate its independence and setting up, the United Arab Emirates is toying with expediting a vehicle From the dunes of Dubai to the soil of the Moon. Why not? Let us read this story from Gulf News of today.
UAE@51: From the dunes of Dubai to the soil of the Moon, Rashid Rover all set to make history
All you need to know about the UAE’s lunar mission that will take off on November 30
Rashid Rover’s core scientific mission is to better understand how lunar dust and rocks vary across the moon.Image Credit: Supplied
Dubai: In what is a huge feat ahead of the 51st UAE National Day, Emirati-made Rashid Rover will shoot to the Moon on Wednesday, November 30, at 12.39pm (Gulf Standard Time), carrying with it the pride and dreams of the UAE — and the entire Arab world.
From the desert dunes of the UAE to the soil of the Moon, the lunar rover — named after the late Sheikh Rashid bin Saeed Al Maktoum, builder of modern Dubai — will give mankind and the global scientific community more knowledge about Earth’s closest celestial neighbour.
It will land on Atlas Crater, located at 47.5°N, 44.4°E on the Moon’s southeastern outer edge of Mare Frigoris (Sea of Cold), and from there capture photos and collect information of the unexplored crater area and the vast basins on Moon’s surface that were formed billions of years ago.
Rashid Rover will study the characteristics of lunar soil, the petrography (composition and properties of lunar rocks) and geology of the Moon. It will also take photos of the moon’s dust movement, surface plasma conditions, and the lunar regolith (blanket of superficial deposits covering solid rocks).Image Credit: Virendra Saklani/Gulf News
The UAE’s moonshot has lofty goals. According to Mohammed Bin Rashid Space Centre (MBRSC),“Rashid Rover will provide about 10 gigabytes of recorded material, scientific data and new images to the global scientific community to study the Moon.”
In particular, Rashid Rover will study the characteristics of lunar soil, the petrography (composition and properties of lunar rocks) and geology of the Moon. It will also take photos of the moon’s dust movement, surface plasma conditions, and the lunar regolith (blanket of superficial deposits covering solid rocks).
Rashid Rover will help scientists better understand how lunar dust and rocks vary across the Moon. It will also provide fresh data for the development of new technologies that can be used to unravel the origins of the Earth and our solar system.
The success of the first Emirates Lunar Mission (ELM) will make the UAE the first Arab country and among the first countries in the world to land a spacecraft on the Moon, after the United States, former Soviet Union and China.
The success of the first Emirates Lunar Mission (ELM) will make the UAE the first Arab country and among the first countries in the world to land a spacecraft on the Moon, after the United States, former Soviet Union and China.Image Credit: Supplied
MBRSC underlined: “The mission embodies the aspirations of the UAE. Rashid Rover will collect images and information that will allow the UAE to conduct comprehensive and integrated studies on how to build human settlement on the Moon, prepare for future missions to study Mars and provide the scientific community with answers about the solar system and other planets.”
Before lift-off, let us look back at the timeline, technical specifications, instruments, functionalities and other important details of the Emirati-made Rashid Rover.
Two years ahead
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, first announced Rashid Rover in September 2020, and the original goal was to land it on the Moon by 2024.
An image to show where Rashid Rover will land on the moon.
In April 2021, MBRSC signed a contract with ispace, inc., a Japanese private lunar robotic exploration company, to transport Rashid Rover to the Moon aboard Hakuto-R M1 (mission 1) lander. Under the terms of the agreement, ispace will also provide wired communication and power during the cruise phase and engage in wireless communication on the lunar surface.
Launch date
Lift-off is on Wednesday, November 30, at 12.39pm (Gulf Standard Time) from Space Launch Complex 40 at Cape Canaveral Space Force Station in Florida, USA, on a SpaceX Falcon 9 rocket. But the date and time are subject to change, depending on weather and other conditions at launch, according to MBRSC.
Hakuto-R M1, which means ‘white rabbit’ in Japanese (it is said a white rabbit lives on the Moon, according to Japanese folklore), will also carry other payloads, including a transformable lunar robot from Japan Aerospace Exploration Agency; a test module for a solid-state battery from NGK Spark Plug Co., Ltd., an artificial intelligence (AI) flight computer from Mission Control Space Services Inc., a multiple 360-degree camera from Canadensys Aerospace, a panel engraved with the names of Hakuto crowdfunding supporters, and a music disc containing the song ‘Sorato’ played by Japanese rock band Sakanaction.
Fuel-saving route
Once launched, the integrated spacecraft Hakuto-R M1 that will carry Rashid Rover and other payload to the Moon will take a low-energy route to the Moon rather than a direct approach. This means the landing on the Moon will take about five months after launch, in April 2023.
Dr Hamad Al Marzooqi, project manager of Emirates Lunar Mission at MBRSC, told Gulf News the rationale for the fuel-saving but long route. He said: “The main factor is the cost of the mission. The cost comes from the volume and mass of the spacecraft. In order to reach to the moon within six days – which is the shortest path – you would need to burn a lot of fuel which means that you need a big tank and a big propulsion system to do that.”
“But it will have a huge impact in cost so, in order to reduce the cost of the mission, ispace (our partner) has selected their approach that they can reach to the lunar surface within five months but it will be less costly because it will burn much less fuel. They will use a smaller tank and propulsion system, therefore the launch cost and the cost of developing the developing system will be lower,” he further explained.
Dimitra Atri, astrophysicist at New York University in Abu Dhabi, added: “In order to keep the prices of payload delivery attractive to customers, private companies reduce their expenses by choosing the lower cost option, which consumes less energy but takes much longer.”
Fully-automated landing
SpaceX Falcon 9 rocket will take Hakuto-R M1 into the Moon’s orbit, and following its successful separation from the launch vehicle (rocket), Hakuto-R M1 will use the gravitational pull of the Earth and sun to guide it to the moon.
As it gets closer to the lunar surface, the Japanese-made lander will first orbit the moon with an increasingly elliptical trajectory, before angling itself vertically to softly land on the moon and perform a fully-automated landing.
SpaceX Falcon 9 rocket will take Hakuto-R M1 into the Moon’s orbit.Image Credit: AP
Hakuto-R M1 will then establish a steady telecommunication and power supply on the lunar surface after landing to support customer payload’s surface operations, including that of the UAE’s Rashid Rover.
Landing site
MBRSC confirmed Atlas Crater, located at 47.5°N, 44.4°E on the moon’s southeastern outer edge of Mare Frigoris (“Sea of Cold”), as Rashid Rover’s landing site.
MBRSC explained: “It was chosen to maintain flexibility during operations. Mare Frigoris lies in the far lunar north. The primary landing site was chosen along with multiple contingencies, which may be used depending on variables that occur during transit. The site meets the technical specifications of the lander technology demonstration mission and the scientific exploration objectives for the ELM mission.”
Mohammed Bin Rashid Centre.Image Credit: Supplied
Atlas Crater has a diameter of 88 kilometres, and believer to have been formed between 3.2 to 3.8 billion years ago. It is circular in shape and bounded by an intricately terraced rim wall. The crater is 2km deep and has a complex floor covered in hills and cracks.
Aside from Atlas Crater, alternative landing targets – according to ispace – include Lacus Somniorum, Sinus Iridium and Oceanus Procellarum, among others.
Compact rover
Designed and developed fully by an Emirati team, Rashid Rover is touted as the world’s most compact rover that could land on the Moon. Its height is 70cm, length is 50cm and width is 50cm. Its weight is approximately 10kg with payload, but it can climb over an obstacle up to 10cm tall and descend a 20-degree slope.
Because Rashid Rover has been delivered well ahead of the original 2024 deadline, building it required rapid prototyping. According to Al Marqoozi, engineers at MBRSC “went through five modules until they reached with the one” that will be launched on November 30.
Advanced cameras
The four-wheeled Rashid Rover has 3D cameras, advanced motion system, sensors, and communication system that are powered by solar panels. There are four cameras that move vertically and horizontally, including two main cameras, which are Caspex (camera for space exploration) that can withstand vibrations during launch and landing
MBRSC has partnered with French space agency CNES (National Centre for Space Studies) for the two Caspex that will be used analyse the properties of lunar soil, dust, radioactivity, electrical activities, as well as the rocks on the moon surface. One Caspex is installed on top of the rover’s mast to provide panoramic visibility of its surroundings while the rear-mounted CASPEX camera will deliver images of the lunar soil with high spatial resolution.
“Rashid Rover’s drive tracks will be analysed to determine wheel sinkage and to investigate the detailed wheel-soil interaction. Such data will be important to design the mobility systems of future rovers,” MBRSC noted.
Mission period
Rashid Rover will study the Moon’s surroundings for one lunar day, which is equivalent to 14 days on Earth. But there is a chance Rashid Rover’s mission can be extended to another lunar day. Al Marzooqi earlier explained: “After the first lunar day the rover will go into a hibernation or mode sleep during the (lunar) night (which is also equivalent to 14 Earth nights) until the sun rises again and the temperature on the rover surface starts to rise again. And by that time, the team will try to “wake up” Rashid Rover to see if its systems were able to survive the low temperatures and ready for the second lunar day.
The Moon’s environment, however, is very harsh. The temperature drops to as low as negative 173 degrees Celsius, from as high as 127 degrees Celsius, when sunlight hits the Moon’s surface. But Rashid Rover is equipped with the latest technologies that can resist the lunar surface temperature.
To the Moon and back
Rashid Rover will not return to Earth. It’s a one-way flight and there is no transport that will bring back Rashid Rover and Hakuto-R. What Rashid Rover will bring back to Earth are multiple images – around 10 gigabytes of recorded material and scientific data. The ELM team at MBRSC will use these to test new technologies in material science, robotics, mobility, navigation and communications. The findings will also help in the design of future missions to survive and function in harsh space environment.
Rashid Rover is just the first of the UAE’s multiple missions to the Moon. A couple of months ago, in September, MBRSC signed an agreement with China National Space Administration (CNSA) to kickstart joint space projects and future lunar exploration, including sending the next UAE rover aboard Chang’e 7, a robotic Chinese lunar exploration mission expected to be launched in 2026 to target the Moon’s south pole.
Oil exporters of the MENA amongst many others need to breathe with their two lungs: oil and gas, revenues of which account for each country’s earnings and cover all of their household and business needs.
Would a change to clean energy and/or a sharp and lasting drop in the price of hydrocarbons, outlets, or reserves be fatal or beneficial for these countries?
Hydrocarbon revenues apart from their addictive characteristics, play a considerable role and have not only shaped the respective economies but also the mentality of the related societies. Common Dreams’ article on Fossil Fuel ‘Addiction’ Sabotaging Every Sustainable Development Goal is quite alarming. Here it is.
Fossil Fuel ‘Addiction’ Is Sabotaging Every Sustainable Development Goal: Report
“Every day that we burn fossil fuels is one more day that we’re undermining these goals for a sustainable, livable planet,” said one campaigner.
A first-of-its-kind report published Wednesday warns that the continued extraction and burning of fossil fuels worldwide—particularly in the rich countries most responsible for planet-warming carbon emissions—is imperiling every single sustainable development goal adopted by United Nations member states in 2015.
The 17 SDGs are far-reaching, ranging from ending global poverty to eliminating hunger to combating the climate emergency, and achieving them by 2030 would require ambitious and coordinated action on a global scale.
But world leaders’ persistent commitment to fossil fuels, which the new report dubs an “addiction,” is rendering such action impossible by “amplifying the impacts of climate change and placing the health and stability of both natural and human systems at risk.”
“Fossil fuel addiction poisons every earnest attempt we make to tackle the sustainable development and climate agendas.”
“Fossil fuel addiction poisons every earnest attempt we make to tackle the sustainable development and climate agendas,” said Tzeporah Berman, chair of the Fossil Fuel Non-Proliferation Treaty Initiative. “Despite a robust pile of evidence that fossil fuels are core to our problems, governments are not moving and international cooperation is lacking.”
Authored by researchers at the University of Sussex on behalf of the Fossil Fuel Non-Proliferation Treaty Initiative and other civil society organizations, the report makes use of more than 400 academic articles and advocacy group reports to closely examine for the first time the threat that fossil fuels pose to each of the SDGs.
By 2030, the report notes, the climate crisis could push 122 million more people into extreme poverty worldwide by intensifying extreme weather events, which often cause mass destruction and displacement. Yet globally, “governments spend three times more money on fuel subsidies than the annual amount needed to eradicate poverty,” the researchers observe.
Fossil fuels are also undermining global efforts to combat hunger, which has spiked during the coronavirus pandemic.
“Increases in global temperatures, shifting rainfall patterns, extreme weather events, and elevated surface carbon dioxide concentrations from burning fossil fuels will reduce the yields of key crops,” the report states. “Fossil fuel production, and fossil fuel corporations’ carbon offset schemes, are pulling vast amounts of land away from productive uses, such as agriculture.”
And on down the list. Promoting good health and well-being, guaranteeing quality education for all, achieving gender equality, ensuring clean water and sanitation, transitioning to renewable energy, and securing lasting peace are all tasks that a fossil fuel-dependent status quo has made unachievable, the new report warns.
“By 2030, humanity needs to have halved global emissions, while at the same time achieving all 17 SDGs,” said report co-author Freddie Daley, a research associate at the University of Sussex. “This is an impossible endeavor without concerted global efforts to constrain and phase out fossil fuel production in a fast, fair, and equitable manner, with the wealthy nations that continue to benefit from fossil-fueled economic growth leading the way.”
“This research lays out the incompatibility of sustainable development and fossil fuels—and what is at stake if we fail to address unchecked fossil fuel expansion,” Daley added.
To dramatically change course and put the world on a path toward achieving sustainable development objectives, the report recommends an entirely new international framework, such as a Fossil Fuel Non-Proliferation Treaty with “binding commitments that constrain fossil fuel production globally.”
Such a treaty, the researchers suggest, should include three prongs:
Non-proliferation. End new exploration and production by issuing a worldwide moratorium on the extraction of new fossil fuel reserves.
Equitable Phase Down. Commit countries to phase down production in existing projects, in line with equity and the 1.5°C global temperature goal.
Accelerate a Fair Transition. Provide finance and technological assistance to aid those most dependent on fossil fuel production to climate change to diversify their economies and move away from fossil fuels, scale up access to renewable energy and ensure a just transition for all.
“Every day that we burn fossil fuels is one more day that we’re undermining these goals for a sustainable, livable planet,” Jean Su, the director of the Center for Biological Diversity, said in a statement.
“The first step to fighting the extinction of countless species and the scourge of global poverty is to turn off the spigot of dangerous fossil fuels,” Su added. “That’s the only way we can build a just, peaceful future that protects the dignity of humanity and all life on Earth.”
America is in a fast pursuit toward achieving President Biden’s stated goal that “we are going to get rid of fossil fuels” to achieve the Green New Deal’s (GND) pursuit of wind turbines and solar panels to provide electricity to run the world, but WAIT, everything in our materialistic lives and economies cannot exist without crude oil, coal, and natural gas.
Everything that needs electricity, from lights, vehicles, iPhones, defibrillators, computers, telecommunications, etc., are all made with the oil derivatives manufactured from crude oil.
The need for electricity will decrease over time without crude oil. With no new things to power, and the deterioration of current things made with oil derivatives over the next few decades and centuries, the existing items that need electricity will not have replacement parts and will ultimately become obsolete in the future and the need for electricity will diminish accordingly.
The Green New Deal proposal calls on the federal government to wean the United States from fossil fuels and focus on electricity from wind and solar, but why? What will there be to power in the future without fossil fuels?
Rather than list the more than 6,000 products made from the oil derivatives manufactured from crude oil, I will let the readers list what is NOT dependent on oil derivatives that will need electricity. They can begin listing them here ______ ________ _______.
And by the way, crude oil came before electricity. The electricity that came AFTER the discovery of oil, is comprised of components made with those same oil derivatives from crude oil. Thus, getting rid of crude oil, also eliminates our ability to make wind turbines, solar panels, as well as those vehicles intended to be powered by an EV battery.
Today, Environmental, Social and Governance (ESG) divesting in fossil fuels are all the rage with big banks, Wall Street firms, and financial institutions, to divest in all 3 fossil fuels of coal, natural gas, and crude oil. Both President Biden and the United Nations support allowing banks and investment giants to collude to reshape economies and our energy infrastructure toward JUST electricity from wind and solar.
A reduction in the usage of coal, natural gas, and crude oil would lead us to life as it was without the crude oil infrastructure and those products manufactured from oil that did not exist before 1900, i.e., the decarbonized world that existed in the 1800’s and before when life was hard, and life expectancy was short.
Ridding the world of crude oil would result in less manufactured oil derivatives and lead to a reduction in each of the following:
The 50,000 heavy-weight and long-range merchant ships that are moving products throughout the world.
The 50,000 heavy-weight and long-range jets used by commercial airlines, private usage, and the military.
The number of wind turbines and solar panels as they are made with oil derivatives from crude oil.
The pesticides to control locusts and other pests.
The tires for the billions of vehicles.
The asphalt for the millions of miles of roadways.
The medications and medical equipment.
The vaccines.
The water filtration systems.
The sanitation systems.
The communications systems, including cell phones, computers, iPhones, and iPads.
The number of cruise ships that now move twenty-five million passengers around the world.
The space program.
Before we rid the world of all three fossil fuels of coal, natural gas, and crude oil, the greenies need to identify the replacement or clone for crude oil, to keep the world’s population of 8 billion fed and healthy, and economies running with the more than 6,000 products now made with manufactured derivatives from crude oil, along with the fuels manufactured from crude oil to move the heavy-weight and long-range needs of more than 50,000 jets and more than 50,000 merchant ships, and the military and space programs.
Open government policies should be focused on reducing our usage, via both conservation and improved efficiencies, to REDUCE not ELIMINATE crude oil, and reduce its footprint as much as practical and possible, is truly the only plan that will work.
Wind and solar may be able to generate electricity from breezes and sunshine, but they cannot manufacture anything. Again, what is the need for the Green New Deal’s electricity from breezes and sunshine when you have nothing new to power in the future?
Ronald Stein, Founder and Ambassador for Energy & Infrastructure of PTS Advance, headquartered in Irvine, California.
By Yousef Saba and Saeed Azhar, Marwa Rashad in a Reuters article that is about how Saudi Arabia targets net zero emissions by 2060 cannot be more explicit about this top oil exporter is obviously struggling to keep up with the current trends of worldwide deep resentment against all fossil fuels. The forthcoming COP26 will definitely enlighten us on this aspect as well as on the major contributors to Greenhouse Gas Emissions plans.
Meanwhile here are the main points of this article:
Doubles target to reduce carbon emissions
To tackle climate change while ensuring oil market stability
Could hit target before 2060, energy minister says
1/4 Saudi Energy Minister, Prince Abdulaziz bin Salman bin Abdulaziz Al Saud speaks during the Saudi Green Initiative Forum to discuss efforts by the world’s top oil exporter to tackle climate change in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri
2/4 Saudi Energy Minister, Prince Abdulaziz bin Salman bin Abdulaziz Al Saud and minister of state for the United Arab Emirates, Sultan Ahmed Al Jaber attend the Saudi Green Initiative Forum to discuss efforts by the world’s top oil exporter to tackle climate change in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri
3/4 Participants attend the Saudi Green Initiative Forum to discuss efforts by the world’s top oil exporter to tackle climate change, in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri
4/4 Participants attend the Saudi Green Initiative Forum to discuss efforts by the world’s top oil exporter to tackle climate change, in Riyadh, Saudi Arabia, October 23, 2021. REUTERS/Ahmed Yosri
RIYADH, Oct 23 (Reuters) – Saudi Arabia’s crown prince said on Saturday that the world’s top oil exporter aims to reach zero-net emissions by 2060 and will more than double its annual target to reduce carbon emissions.
Crown Prince Mohammed bin Salman and his energy minister said OPEC member Saudi Arabia would tackle climate change while ensuring oil market stability, stressing the continued importance of hydrocarbons.Report ad
They were speaking at the Saudi Green Initiative (SGI), which comes ahead of COP26, the UN climate change conference in Glasgow at the end of the month, which hopes to agree deeper emissions cuts to tackle global warming.
“The Kingdom of Saudi Arabia aims to reach zero-net emissions by 2060 under its circular carbon economy programme … while maintaining the kingdom’s leading role in strengthening security and stability of global oil markets,” Prince Mohammed said in recorded remarks.Report ad
He said the kingdom would join a global initiative on slashing emissions of methane by 30% from 2020 levels by 2030, which both the United States and the EU have been pressing.
U.S. climate envoy John Kerry is due to attend a wider Middle East green summit Riyadh is hosting on Monday. read moreReport ad
Saudi energy minister Prince Abdulaziz bin Salman said Riyadh, a signatory to the Paris climate pact, had already submitted its nationally determined contributions (NDCs) – goals for individual states under global efforts to prevent average global temperatures from rising beyond 1.5 degrees Celsius above pre-industrial levels.
The SGI aims to eliminate 278 million tonnes of carbon emissions per year, the crown prince said, up from a previous target of 130 million tonnes.
Saudi Arabia in March pledged to reduce carbon emissions by more than 4% of global contributions. It said that would involve generating 50% of its energy needs from renewables by 2030 and planting billions of trees in the desert state. read more
HYDROCARBONS STILL NEEDED
Saudi Arabia’s economy remains heavily reliant on oil income as economic diversification lags ambitions set out by the crownprince.
Saudi officials have argued the world will continue to need Saudi crude for decades to come.
“The world cannot operate without hydrocarbon, fossil fuels, renewables, none of these will be the saver, it has to be a comprehensive solution,” the energy minister said.
“We need to be inclusive and inclusivity requires being open to accept others efforts as long as they are going to reduce emissions,” he said, adding that the kingdom’s young generation “will not wait for us to change their future”.
He said the net zero emissions target might be achieved before 2060 but the kingdom needed time to do things “properly”.
Fellow Gulf OPEC producer the United Arab Emirates this month announced a plan for net zero emissions by 2050. read more
The chief executive of UAE oil firm ADNOC, Sultan al-Jaber, also stressed the importance of investment in hydrocarbons, saying the world had “sleepwalked” into a supply crunch and that climate action should not become an economic burden on developing nations. read more
GREEN PUSH
Saudi Arabia has been criticised for acting too slowly, with Climate Action Tracker giving it the lowest possible ranking of “critically insufficient”.
And experts say it is too early to tell what the impact of Saudi’s nascent solar and wind projects will be. Its first renewable energy plant opened in April and its first wind farm began generating power in August.
Megaprojects, such as futuristic city NEOM, also incorporate green energy plans including a $5 billion hydrogen plant, and Saudi state-linked entities are pivoting to green fundraising.
Some investors have expressed concerns over the kingdom’s carbon footprint. Others say Saudi Arabia emits the least carbon per barrel of oil and that de facto ruler Prince Mohammed is serious about economic diversification.
“Obviously the carbon footprint is an issue. However, we would highlight that realistically carbon is going to be slow to phase out, and oil is here for some time yet,” Tim Ash at BlueBay Asset Management said in emailed comments.
Reporting by Yousef Saba and Saeed Azhar in Riyadh, Marwa Rashad in London and Maher Chmaytelli in Dubai; Additional reporting by Raya Jalbi in Dubai; writing by Ghaida Ghantous; editing by Nick Macfie and Jason Neely
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