As 2023 enters its final month, the global energy industry is at a momentous moment.
The Saudi-led Alliance of Oil Producing Countries (OPEC+) Ministerial Meeting and the 28th United Nations Climate Change Conference (COP28) were held on the same day. The two conferences had a common protagonist - "black **" oil.
Ahead of COP28, more than 130 companies, including IKEA, Volvo and Unilever, issued a joint letter calling on all parties to agree on a timetable for abandoning fossil fuels at COP28.
And the chairman of COP28, Sultan Jaber, Minister of Industry and Advanced Technology of the United Arab Emirates, is also the CEO of Abu Dhabi National Oil Company, one of the world's largest oil producers.
On the road to climate change, the topic of where fossil fuels will go is destined to be unavoidable.
Earlier, the British people held a ** event outside Downing Street, calling for "stop oil extraction". IC diagram.
"Carbon reduction" meets "production reduction".
From November 30 to December 12, COP28 will be held in Dubai, United Arab Emirates, with the participation of more than 160 heads of state and ** leaders. According to the organizers, nearly 100,000 people have registered to participate in the conference, setting a record for the largest scale in history.
COP28 is considered the most important climate conference after COP21.
Eight years ago, the Paris Agreement was adopted at COP21 – a long-term goal to combat climate change – to limit the increase in global average temperature to well below 2 degrees Celsius above pre-industrial levels, and to work to limit the rise to 1Within 5 degrees Celsius.
At the time, CNN made headlines saying, "This is the end of fossil fuels." ”
However, after eight years, 2023 could be the hottest year on record. The past eight years have also been the warmest on record globally.
On September 8, the United Nations Framework Convention on Climate Change (UNFCCC) released the "Global Stocktaking Comprehensive Report", which pointed out that the current climate action plans of countries around the world are still insufficient to limit global warming to 1Nor will the goals of the Paris Agreement be met below 5 degrees Celsius.
On November 20, the United Nations Environment Programme's 2023 Emissions Gap Report warned that unless countries step up climate action, global temperatures will significantly cross the 2 degrees Celsius "warning line" by 2030 to reach 25 to 29 degrees Celsius.
Humanity's self-help efforts lag far behind the rate of global warming. "Please, we don't have time to waste. Sultan Jaber said.
At this climate change conference, the first "global stocktake" of the implementation of the Paris Agreement will be crucial. It will be a rigorous assessment of global progress in curbing polluting greenhouse gas emissions, as well as an important review of countries' efforts to reduce emissions. The United Nations described the stocktaking as "a time to take a long-term, serious look at the state of our planet and chart a better course for the future."
How to think about fossil fuels is another focus of COP28.
On the eve of the meeting, the International Energy Agency (IEA) and the Saudi-led alliance of oil producers (OPEC+) engaged in a fierce exchange over the outlook for the oil and gas industry.
On the opening day of COP28, another major conference of the global energy industry, the OPEC+ conference**, took place.
OPEC+ members each announced a "voluntary" production cut in the first quarter of next year, with a total size of 21930,000 barrels per day, of which Saudi Arabia and Russia cut production by 1 million barrels per day and 500,000 barrels per day, respectively. The scale of production cuts in the rest of the countries were: Iraq 220,000 barrels per day, the United Arab Emirates 1630,000 barrels per day, Kuwait 1350,000 barrels per day, Kazakhstan 820,000 barrels per day, Algeria 510,000 barrels per day, Oman 420,000 barrels per day.
Huang Liunan, a senior analyst at Guotai Junan's ** Nenghua, told the International Financial NewsThe production cut is slightly lower than market expectations, which is reflected in two aspects: first, the production cut is insufficient, which may not be enough to alleviate the market's concerns about the market surplus in the first half of next year;Second, the wording of the OPEC+ statement is not as resolute as the outcome of the previous meeting, which may increase the market's concerns about the implementation rate of OPEC+ production cuts in the future.
Doubts and disagreements
This time, the COP28 meeting opened amid skepticism.
The UAE, the host country of COP28, is an oil powerhouse and relies on the export of fossil fuels as its main income**. Sultan Jaber, president of COP28, is also the CEO of Abu Dhabi National Oil Company.
At the opening of the conference, the BBC reported that the United Arab Emirates, the host country of the summit, plans to hold business talks during the climate talks to broker new deals between its state-owned oil and gas companies and a number of countries.
Although Jaber denied the newsHowever, as the CEO of an oil company, Jaber's chairmanship of the climate summit has been widely questioned by climate activists around the world since it was announced, and some climate activists have said that they do not want COP28 to become an "oil show".
On top of that, there is disagreement on whether or how to phase out fossil fuels on the road to the energy transition. In successive years of climate conferences, countries have failed to agree on the wording "phase-out of fossil fuels".
For example, at COP27, oil- and gas-producing countries such as Saudi Arabia expressed opposition to phasing out fossil fuels. This year, EU countries made it clear that they would push for a global phase-out of fossil fuels as a priority for COP28.
According to the IEA, the oil industry is facing a "critical moment" and must seize the opportunity of COP28 to increase low-carbon investment and truly participate in the development of renewable energy and the green economy. The IEA's report states that since 2018, the oil industry has earned an average of $3 per year$5 trillion, but too little investment in low carbon.
But the oil and gas community does not see emissions reductions and development as a zero-sum game.
OPEC Secretary General Haitham Qaith, who is also a Kuwaiti oil executive, said oil and gas companies were making significant investments in renewable energy and emissions reduction technologies. No one energy source should take precedence over another.
On November 30, Haitham Qais posted on the official website of OPEC that the enthusiasm for public discussion around the COP is increasing year by year. This year, there has been increased focus on the role of the oil industry in the energy transition. Unfortunately, OPEC disagrees with the frequent misguided narrative that the oil and renewables industry is a competitor caught in a zero-sum game – where the success of one poses a mortal threat to the other.
By giving examples of wind turbines, solar panels, lithium-ion batteries in electric vehicles, Hetham Geiss proves that the oil industry and renewable energy do not operate in a vacuum completely isolated from each other, and that renewable energy requires petroleum products. As a result, OPEC expects global oil demand to grow by 16% by 2045.
As president of COP28, Jaber said for the first time at the UN climate talks in Bonn in June that phasing out the demand for all fossil fuels is inevitable and necessary. But he also pointed out that the world is not ready to completely abandon oil and gas and needs to face reality. Jaber stressed that we cannot completely exclude fossil energy from the current energy system until a new energy system is established.
Industry experts expect a big debate at COP28 over whether to stop using fossil fuels, and the outcome of the negotiations could provide guidance on where to go.
Action and hope
On the issue of climate change, cooperation between the United States and China will inject important momentum into the climate conference.
In 2015, the United States and China reached a historic consensus on the goals of the Paris Agreement, which played an important role in the adoption of the agreement that year.
Shortly before COP28, China and the United States issued a statement on strengthening cooperation to address the climate crisis, mentioning that the two countries will actively participate in the first global stocktaking of the Paris Agreement, commit to working together and work with other parties to reach a global stocktaking decision by consensus, and support the UAE presidency to successfully host COP28. This positive statement will play a huge role in promoting the progress of global climate negotiations. It has injected new impetus and hope into the global response to climate change.
The United States and China have decided to launch the "Enhanced Climate Action Working Group in the 2020s" to engage in dialogue and cooperation to accelerate concrete climate action in the 2020s, according to the Sunshine Country Statement. With regard to the energy transition, the statement noted that in the critical decade of the 2020s, the two countries support the efforts outlined in the G20 Leaders' Declaration to triple global renewable energy capacity by 2030, and plan to fully accelerate the deployment of renewable energy in both countries from 2020 levels between now and 2030 to accelerate the substitution of kerosene, oil and gas power generation, so that meaningful absolute reductions in emissions from the power sector can be expected to peak after peaking.
OPEC members are investing heavily in renewable energy technologies, hydrogen projects, carbon capture utilization and storage, direct air capture facilities, and a circular carbon economy, according to Hetham Geiss.
According to the United States**politico, the UAE is promoting the "Global Decarbonization Alliance" (Global Decarbonization Alliance), which aims to bind oil companies in various countries and continue to move towards emission reduction targets.
More than 20 fossil fuel companies have joined the initiative, covering a quarter of the world's oil and gas production. Companies joining the alliance are committing not only to net-zero carbon emissions by 2050, but also to near-zero methane emissions by 2030.
At present, international oil companies are also accelerating the pace of diversification of the energy structure. Judging from the financial reports released by the five major international oil companies (bp, Shell, TotalEnergies, ExxonMobil, and Chevron) this year, international oil companies are steadily developing low-carbon businesses while optimizing traditional oil and gas businesses, and accelerating the pace of diversification of energy structure, from traditional oil and gas companies to low-carbon and clean integrated energy companies.