Reposted by Forbes
By Tilak Doshi
At the virtual “Climate Ambition Summit”, which was jointly organized by the United Nations and Great Britain and in which over 70 heads of state and government from around the world took part on December 12, General Secretary António Guterres warned urgently: The world is facing a catastrophe which on the right path is warm by more than 30 ° C by the end of the century, "unless all countries declare a climate emergency". At the summit, he expressed disappointment that the G20 countries are “spending 50% more on their stimulus and rescue packages for sectors related to fossil fuel production and consumption than they are for low-carbon energy … This is unacceptable ".
The Secretary General asked earnestly, "Can anyone deny that we are facing a dramatic emergency?" The question raises the huge gap between the political positions of major Western governments and oil and gas producers in the Middle East. For the Middle East hydrocarbon producers, hit by the "double blow" of the sharp drop in oil and gas prices – the mainstay of government revenues – and the impact of the Covid-19 lockdown on domestic economic activity, the strategy for national survival is clear could no longer be against the Secretary-General of the United Nations: to greatly increase the pace of monetization of the oil and gas reserves with which their countries are blessed.
Middle East to deliver more oil and gas
Within two weeks of the UN summit, Saudi Arabia's energy minister announced the discovery of four new oil and gas fields, including unconventional resources, on December 27. The discoveries will bolster the country's plans to increase its maximum sustainable crude oil production capacity from its current 12 million b / d to 13 million b / d and to develop its gas resources to free more oil for export rather than burning it to generate electricity .
Sultan Al Jaber, CEO of ADNOC, one of the leading national oil companies in the Gulf region, said the company is "leaving no stone unturned in Abu Dhabi to unlock the value of our abundant hydrocarbon resources." In late 2019, the Abu Dhabi government approved a $ 122 billion investment plan over the next five years to increase oil and gas production capacity. With massive newly discovered reserves and approval to award key oil and gas exploration blocks, the country looks forward to increasing its oil production capacity from the current 4 million b / d to 5 million barrels / day (b / d).
While the West wants to do without it
In contrast, the climate summit was an opportunity for Prime Minister Boris Johnson to show leadership in climate policy in a warm-up act for next year's global climate conference in Glasgow, hosted by the UK. The UK called for a radical end to fossil fuel dependency, previously announcing a ban on new diesel and gasoline vehicles by 2035 and a steep 68% cut in CO2 emissions from 1990 to 2030. At the climate summit, Prime Minister Johnson pledged to end funding for overseas oil and gas projects "as soon as possible". He also reiterated his call for Britain to become "the Saudi Arabia of wind power generation" and put "the country's foot on the gas pedal in a carbon-friendly way".
Policymakers in a number of Western countries that have announced ambitious emissions reduction targets by 2050 have focused on turning the coronavirus pandemic crisis into an "opportunity" for a green industrial revolution (Boris Johnson) and the big blow to global business (Klaus) to convert Schwab, founder of the World Economic Forum). And we are promised that a Biden Presidency around the corner will join the promise of “net zero by 2050” from the first day they take office.
While political elites in the West warn of the “impending” disastrous outcome that emissions will not be cut, the rest of the world is gripped by the need to make difficult decisions to restore growth and jobs for its citizens as they emerged amid recessions global world are affected by pandemic. Hydrocarbons account for almost 85% of global energy consumption, while renewable energy technologies such as wind, sun, modern biofuels and batteries can barely provide 5%. Can these renewable energy technologies provide the world with the energy it needs for the foreseeable future?
But the oil and gas is needed
Despite the unprecedented slump in demand caused by the coronavirus pandemic since March, and despite the endless flow of stories of the robust growth of renewable energy, the world is facing a long-term supply shortage for oil and gas. According to the energy consultancy Wood Mackenzie, only about half of the supply required by 2040 will be available from producing fields, "the rest will require new capital investments".
In light of the recent collapse in upstream oil and gas investments, the International Energy Forum has indicated in a recent report that we will face a supply shock if upstream investments in oil and gas exploration and production fail annually for the next three years 25% increase from "historic proportions". According to the IEF's Secretary General, "reducing investment in new production means lower overall supply … it won't be long before that lower supply collides with resurgent demand." The result will be higher and more volatile oil prices and headwinds to post-pandemic economic recovery. "
Access to fossil fuels on a large scale is the only known route to economic development. Since the industrial revolution of the 18th and 19th centuries, no country on earth has developed without the use of easily accessible hydrocarbons. Britain may become the “Saudi Arabia of wind energy” (though there are many doubts), but what developing countries, which account for more than three-quarters of the world's population, need is real Saudi Arabia, along with other oil and gas producers to be ready and able to provide fossil fuels necessary for human beings to thrive.