Oil states continue oil, but want to green themselves

Copyright © ChangeInc 2023

Oil companies and Gulf states in the Middle East argue that the world will always need oil and gas and will continue to do so. Western countries that advocate a green energy transition without fossil fuels find them, above all, dramatic. They do want to green their own countries and cities and capture and store their CO2.

Upon entering Ahoy, visitors were welcomed by Saudi Arabia and Aramco. | Credit: André Oerlemans

This was evident during the ^26thWorld Energy Congress in Ahoy in Rotterdam. There, hundreds of top people from the energy sector spoke for four days about the energy system of the future. From ministers, princes, sheikhs, sultans to members of Saudi Arabia's royal family, from chief executive officers to chief sustainability officers, from oil companies to NGOs, from scientists to entrepreneurs. Although there was modest room on the exhibition floor and in panel discussions for green energy advocates and suppliers, it turned out to be primarily a conference for and of the oil sector. This was already clear upon entering Ahoy. There visitors were welcomed to the luxurious stands of Saudi Arabia and Saudi Aramco, the largest oil company in the world and with 243 billion euros in profits by 2022 also the most profitable company in the world.

Half of all energy remains oil

Already on the first day of the congress, Aramco CEO Amin H. Nasser spoke plainly. According to him, a maximum of half of all energy will become renewable this century. The rest will still come from oil and gas. Like owner Saudi Arabia of the state-owned company, he promises to emit no more CO2 and be energy-neutral by 2060. But that applies only to the country and company's own emissions, called scope 1 and 2. That is not where the problem lies.

Largest emitter in the world

In fact, most of the country and oil company's CO2 emissions come from exporting and using oil, so-called scope 3. According to the independent Climate Action Tracker, the country will hardly reduce its current emissions of 700 million tons of CO2. Rather, increase them. Aramco is the world's largest emitter of greenhouse gases, accounting for 4.3 percent of global CO2 emissions. With the current efforts of country and state-owned company, global warming will reach about 4 degrees Celsius or more, Climate Action Tracker has calculated. Environmental organization Client Earth also argues that Aramco mainly wants to increase its oil production and that the company's greening is greenwashing.

Greening itself

Nevertheless, Saudi Arabia is fully committed to wind and solar energy. It is building cities and tourist resorts that are completely energy-neutral, is going to plant a total of 600 million trees by 2030 and wants to make capital Riyadh one of the most sustainable cities in the world. An energy company like ACWA Power wants to develop 20 gigawatts of solar, wind and green hydrogen projects every year. Already, 46 percent of the power the company supplies is renewable.

Many prejudices

Europe has many prejudices against Gulf states, says former CNN journalist John Defterios, moderator at the energy conference. "They would like to get the last drop of cheap oil out of the ground, just throw oil money around and don't keep their green promises," he says. That's why Europeans should visit the region themselves, believes Amrita Sen, adviser to OPEC countries and oil companies around the world. "You have to go there to see it. That is the only way to be convinced of what is happening there. I have seen the transformation myself," she says.

Problem is not oil

Sharif Al-Olama, undersecretary of state for energy and oil affairs of the United Arab Emirates (UAE) prefers to talk about misperception rather than prejudice. "We all see the problem and we all want to find a solution to it. But the problem is CO2 emissions. The problem is not oil. We should not eliminate a reliable, cost-effective source of energy that builds economies and supplies the whole world. That is why I believe, for example, that gas will not just disappear, but will be a transitional fuel in the coming decades. It is desperately needed. The future energy system between now and 2060 will be a mix of renewables, nuclear, gas, fossil fuels and hydrogen."

No money for CCS

He sees the climate solution primarily in CO2 capture and storage(CCS) from fossil fuels. Other oil states also want to go green by going full throttle on this. Also in the reuse of carbon (CCUS), for example in biofuels. Several sessions during the congress dealt with that topic. The big problem: countries can hardly find funding for this.

West polarizes the world

According to Marco Arcelli, CEO of the Saudi Arabian energy and water company ACWA Power, when calling for an energy transition, rich northern hemisphere countries forget that developing countries need cheap fossil energy to increase their standard of living. "The West needs to talk more about what is happening there. They can be a catalyst to create better living conditions elsewhere in the world, but right now they are polarizing the world," he says.

Out of touch

"Why must the West impose its will on other countries and demand that they switch to green energy?" was a painful question during one of those panel discussions. Europe and America use relatively the most energy, while developing countries should no longer use oil or gas to grow their economies. "It's very easy to say from on high: you have to reduce your energy consumption and do this and that. You have to tell the truth about the energy transition. It's going to be very expensive. All Western governments talk about energy transition but want someone else to do it for them," states oil consultant Amrita Sen.

Cheap oil needed

Even a country like Kuwait is not planning to stop using oil and gas. It is needed to help less developed countries in Africa and Asia - where hundreds of millions of people do not even have access to energy - with their energy security, stated Sara Akbar, president and CEO of Oilserv. That Kuwaiti company helps other companies in the Middle East and Africa pump oil. "We continue to supply oil and gas and will reduce our emissions and remove all CO2, but we are not getting any help from the world on this," she said. According to her, renewable energy is far too expensive compared to oil. "I filled up here in Rotterdam for 42 euros, while in Kuwait it would cost 5 euros. The only place that can provide cheap renewable energy is the Middle East," Akbar states.

Saving energy

In addition to using more solar and wind energy, being more energy efficient is another important step to go green, oil countries say. Kuwait has already reduced its energy consumption by 40 percent. Lebanon, by necessity, also has a lot of experience in doing so. "We doubled our energy efficiency, reduced our energy consumption and tripled the use of renewable energy. This was an economic necessity," said Lebanese Energy and Water Minister Walid Fayad. The country has already installed 1,500 megawatts of solar panels, but could do even more with better financing. Lebanon has ideal conditions to generate solar power. "We just need more investors, but there are none," says the minister. He admits that the country's political instability and economic collapse are partly to blame.

COP president honored

The United Arab Emirates also wants to go green. The country hosted the COP28 climate summit in capital Dubai late last year. During the conference in Rotterdam, chairman Dr. Sultan Ahmed Al-Jaber of that COP, also minister and CEO of the state oil company ADNOC, was awarded the Transition Impact Award. This for achieving the so-called UAE Consensus during the climate summit. That includes that the world is going to "move away" - not stop - from fossil energy and triple renewable energy generation. The latter is difficult for countries with little space for wind and solar farms. The United Arab Emirates itself has saved 10 percent of its energy in recent years.

First time in 100 years

Still, this was the first time in the centennial existence of the organizing World Energy Council that the need for an energy transition was discussed so emphatically at the congress. That term, according to the council's secretary general and CEO Dr. Angela Wilkinson, is politically charged and has caused polarization in recent years. She called reducing CO2 emissions urgent and said there are multiple ways to do that. "The uncomfortable news is that there is no one size fits all solution, nor a quick and easy solution," Wilkinson said. Outgoing climate and energy minister Rob Jetten also got to address the oil community. He reminded all present how historic COP28 in Dubai was. "Shifting away from fossil fuels is crucial, but will also take time," Jetten admitted. He also had another tip for all oil states: stop subsidizing fossil fuels and put that money into renewable energy.

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