Less than two weeks following the UN “Climate Ambition Summit” held virtually on December 12, Saudi Arabia announced the discovery of four new oil and gas fields..“State-run oil giant Saudi Aramco is working to determine the exact size and resource volume of the new finds,” Prince Abdulaziz bin Salman said in a statement carried by the official Saudi Press Agency..The fields, if productive, will boost Aramco’s plans to increase its maximum sustained crude production capacity from the current 12 million b/d to 13 million b/d, as well as its aim of developing its gas resources to free up more oil for export instead of burning it for power generation, reported S&P Global..Speaking at the summit, UN Secretary-General Antonio Guterres called upon world leaders to declare a “climate emergency.“Five years after Paris we are still not going in the right direction… If we don’t change course, we may be headed for a catastrophic temperature rise of more than 3 degrees this century… That is why today I call on all leaders world wide to declare a state of climate emergency in their countries, until carbon neutrality is reached,” he said..He posed the question: “Can anybody still deny we are facing a dramatic emergency”?.The question highlights a wide gulf between Western policy positions on climate change and net-zero emissions goals, and oil and gas producers in the Middle East..Hydrocarbon revenues, the largest single component of GDP for most countries in the Middle East, have been severely impacted by the sharp decline in oil and gas prices and sales as a result of the global COVID-19 pandemic response..This puts Arab producers at odds with UN Agenda 2030..The new Saudi discoveries will boost the country’s plans to increase its maximum sustained crude production capacity from the current 12 million b/d to 13 million b/d as well as developing its gas resources to free up more oil for export instead of burning it for power generation, reported Forbes..CEO Sultan Al Jaber of the ADNOC, one of the leading national oil companies in the Gulf region, said that the Abu Dhabi company is “leaving no stone unturned in unblocking value from our abundant hydrocarbon resources”..Policy makers of a number of Western countries that have announced ambitious zero-emission reduction goals by 2050 have focused on converting the coronavirus pandemic crisis into an “opportunity” for a “great reset”..Wall Street agrees..Big money is turning its back on companies that aren’t conforming to one simple idea…sustainability – and it is fueling one of the biggest transfers of capital the world has ever seen. In fact, within a year, 77 per cent of institutional investors will stop buying into companies that aren’t, in some way, sustainable, said Oilprice.com..We still need oil and gas, however..According to energy consultancy Wood Mackenzie, only about half the supply needed to 2040 is available from producing fields, “the rest requires new capital investment”..Given the recent collapse in upstream oil and gas investments, the International Energy Forum in a recent report pointed out that if upstream investments in oil and gas exploration and production do not increase by 25% annually over the next 3 years, we face a supply shock of “historic proportions.”.Ken Grafton is the Western Standards Ottawa Bureau Chief. He can be reached at kgrafton@westernstandardonline.com
