A seminar ahead of the Third OPEC Summit being held in Riyadh this week was told carbon emissions have to be reduced to secure our survival, and that OPEC has an important role to play in developing the technology needed to bring about those reductions. The head of the UN Framework Convention on Climate Change (UNFCC) Yvo de Boer told delegates that while oil is here to stay for the coming decades, business as usual is not a development path that is sustainable.
The seminar on 15 November which was addressed by Mr de Boer was chaired by Saudi Oil Minister Ali Naimi, reflecting the extent to which the issue of climate change has risen up the oil industrys agenda. But the challenge for oil producers is to find a balance between responding to pressures to increase output on the one hand and playing a part in cutting carbon emissions on the other. Only a day before the seminar, the Saudi deputy Oil Minister, Prince ?Abd al-?Aziz ibn Salman, announced at a press conference that OPEC countries were planning to invest $150bn to increase oil production capacity from now until 2015 by 25mn b/d.
Mr de Boer said OPEC needed to address the challenge posed by global warming in a spirit of cooperation. If it were to emerge that there is a willingness among OPEC countries to step forward and work with industrialized nations on developing carbon dioxide capture and storage (CCS), that would be a really positive outcome of this summit, he said. His speech was timely, being delivered in the capital of the worlds largest oil exporting country, in front of some of the highest authorities in the industry. Furthermore, the UN Climate Change Conference is to be held in Bali next month, where the G8 leaders will try to initiate a response to the findings of the Intergovernmental Panel on Climate Change (IPCC) delivered earlier in the year. Mr de Boer said the IPCC had identified CCS as the most promising technology for the rapid reduction of global emissions up to 55% by 2100 and therefore a key solution for combating climate change.
CCS schemes provide a theoretical solution to the problem of OPEC pursuing its output targets, and indeed assisting with the realization of them as an enhanced oil recovery method, while supporting the G8s climate objectives (MEES , 18 June). But OPEC was certainly not singled out as the prime offender in the discussion on climate change in Riyadh, nor was Mr de Boer calling for a dramatic reduction in global oil consumption, which would inevitably hinder growth in the major developing economies of countries such as India and China. The global climate change regime we are seeking is not about reducing carbon intensity but about reducing emissions, Mr de Boer said. Coal-fired power stations, which are proliferating in China, are one energy-related industrial source where CCS can be effectively utilized.
Cooperation In CCS R&D
As the IEA pointed out in its World Energy Outlook 2007 earlier this month (MEES , 12 November), fossil fuels will continue to dominate the energy mix for decades to come. Unless the governments of consumer states actively promote energy efficiency and shift the energy supply to more climate friendly technologies, projected global primary energy demand is set to increase from 11.1bn tons of oil equivalent in 2004 to 17.1bn tons of oil equivalent by 2030. But the IPCCs findings require, among other things, that global energy-related CO2 emissions peak between 2015 and 2020, and decrease to current levels by 2030, which creates enormous challenges. In Mr de Boers view, ways of achieving significant progress in developing more friendly technologies are within reach: The scientists have pointed out that we can reduce global green house emissions by 20-30% simply by energy efficiency measures that pay themselves back in two-to-three years because of a lower energy bill.
Existing technology can substantially reduce the emission of CO2 and demand for oil, John Mitchell, the head of the Energy, Environment and Development Program at Chatham House in London, told the seminar. To illustrate his point, Dr Mitchell said that, in the hypothetical event of the US suddenly replacing its fleet of cars with new Japanese models, gasoline demand would drop by 4mn b/d.
The seminar also highlighted the damaging contributions of gas flaring and poor refinery operations to global CO2 emissions. Nigerian Oil Minister Odein Ajumogobia spoke of his countrys plan to eradicate flaring by 2008, while admitting that the policy was behind schedule. We are still putting pressure on the operators to achieve it, Dr Ajuomgobia said. But he added that Nigeria had signed a memorandum of understanding with Norway, one of the pioneers of CCS technology, to work together to reduce emissions in Nigeria.
Very few serious steps have so far been taken by producer countries towards developing and deploying CCS technology, the seminar heard. But the climate change conference in Bali could change that. Mr de Boer also mentioned at a press conference after the seminar that former OPEC Secretary General Adnan Shihab-Eldin had discussed with him the establishment of a research and development fund to focus on CCS. This would attract into the international market the new technology that is critical to the further use of oil, he said. Although the idea was only in the very early stages, Dr Shihab-Eldin indicated that the fund could be filled by industrialized consuming countries, OPEC countries and large developing countries, with each group contributing $1bn. If oil producing countries put the first dollar on the table then to my mind it makes it almost impossible for rich oil consuming countries to then not put another one next to it, Mr de Boer said.
Copyright MEES 2007.
