Oil companies are happy to move away from fossil fuels

Oil industry executives Wednesday said they broadly supported the deal that emerged from the United National Climate Summit in Dubai, despite language calling for “the transition away from fossil fuels.”

“We support the outcome of COP28,” said a spokesperson for Shell, Europe’s largest energy company.

Eni, the Italian energy giant, praised the “great pragmatism” of the meeting.

Saudi Arabia, OPEC’s de facto leader, which had raised objections to an early draft of the deal, backed the final accord, saying it left countries free to choose their own direction in tackling climate change.

“Dictating things has been buried,” Prince Abdulaziz bin Salman, the Saudi oil minister, said in an interview with Al Arabiya television. “And so people are free in their choices,” he added. The Saudi minister also said the COP28 deal would have no impact on the country’s ability to sell crude oil, the newspaper said.

The deal’s appeal to oil producers is likely its lack of requirements to take specific actions. As a result, countries can choose their own pathways to reduce greenhouse gas emissions that cause climate change. The sweeping deal, approved by diplomats from nearly 200 countries, even seems to suggest there is a role for natural gas, a fossil fuel that has attracted heavy investment from major oil companies in recent years in “facilitating the energy transition.”

Leaders of producing countries feared the meeting would come with stricter regulations to curb the use of fossil fuels. That would put pressure on the oil and gas industries, whose revenues often support their governments’ budgets.

In a letter last week that seemed to reflect such unease, OPEC Secretary General Haitham Al-Ghais urged the 23 members of the producer group and its allies, known as OPEC Plus, to “ to reject any text or formula that focuses on energy. fossil fuels instead of emissions.”

After the conference ended Wednesday, he praised “the consensual and positive outcome” in a joint statement with his counterpart in a group of natural gas exporters.

Ultimately, the oil producers appear to have succeeded in ensuring that language that reflects their strengths was included in the agreement. The agreement also calls for “accelerating” carbon capture and storage, a technology that has been criticized by environmental groups as having the potential to expand the use of fossil fuels.

Although the focus of the COP delegates was on ensuring that ‘fossil fuels’ was included in the outcome document, the energy industry also appears to have had sufficient input. The Saudi oil minister was almost embarrassingly candid about his delegation’s access to the conference, which was led by Sultan al Jaber, the CEO of Adnoc, the state oil company based in Abu Dhabi.

“We were given priority that I don’t think I’ve ever seen,” the prince said.

Despite appearances, wealthy oil-producing countries like Saudi Arabia and the United Arab Emirates, along with the larger energy companies, are willing to make at least modest investments in cleaner energy technologies. They realize that as temperatures reach records and countries like Canada are hit by wildfires, a gradual change in energy consumption is inevitable.

Smaller oil companies may not have the skills or financial resources to make such investments. Their interest is that they can produce oil and gas as long as there is a market for these fuels.

“The demand for affordable, reliable energy will continue to rise as the world’s population increases, and the world will need more energy sources, not less,” said the American Petroleum Institute, a Washington-based trade group that represents a wide range of companies. said Wednesday.