War Gives Oil Producers Greater Clout at COP 27 Climate Talks

United Arab Emirates Energy Minister Suhail Al-Mazrouei summed up the industry’s change in fortune at a conference in Dubai last month. “Oil producers felt unwanted in COP26, felt like we were in a corner,” he said. “Now, we’re like superheroes.”

The U.K. banned oil companies from sponsorship deals at the gathering in Glasgow last November, saying that their net-zero targets weren’t credible. It was a victory for green campaigners who had criticized Poland for allowing coal companies to plaster their branding all over the COPs it hosted in 2013 and 2018. The decision also struck a nerve with oil executives, including Shell Chief Executive Officer Ben van Beurden, who complained about not feeling welcome ahead of the talks last year.

It’s unlikely the industry will face the same resistance this year. Egypt, which will oversee COP27 in the resort town of Sharm El-Sheikh this November, has historically aligned itself with a group of developing countries that’s resisted pressure to do more to cut emissions. It’s argued that African countries shouldn’t be deprived the opportunity to exploit their oil and gas reserves, and stressed that the priority of this year’s meeting should focus on getting rich countries to pay more to help them transition to clean energy.

While the UAE — the hosts of 2023’s meeting — has been a relative frontrunner within the region on climate policies, becoming the first Persian Gulf oil producer to set a net-zero goal last October, it’s still squarely in favor of continuing to use fossil fuels. The country wants to shift the COP narrative so hydrocarbons are seen as part of the solution, instead of the problem, according to a person familiar with the nation’s strategy. Officials from the UAE and Egypt are already working closely to make sure the two conferences are aligned, the person said.

There are also signs that the next two COPs risk being co-opted by oil interests because of the close relationship between Saudi Arabia and the host countries. Saudi Arabia has pledged $15 billion to support Egypt as its economy comes under pressure from the war in Ukraine, depositing the first $5 billion last month.

“The Saudis have perennially been a spoiler in this process since the beginning,” said Alden Meyer, a COP veteran and senior associate with research group E3G. There’s a long list of complaints from scientists and diplomats about the country’s pushback on global agreements to cut emissions and reports from the UN’s Intergovernmental Panel on Climate Change summarizing latest scientific findings.

Meyer says the Saudis led the fight to downplay a groundbreaking 2018 IPCC report that stated the devastating impacts of warming beyond 1.5C. Its officials earlier this month successfully lobbied for a major report on strategies to cut emissions to place more emphasis on carbon removal technologies which would theoretically allow for the continued extraction of oil and gas, Climate Home News reported. Experts say efforts should focus on cutting emissions first. In a recent submission to the UN, the Kingdom warned rich countries that reducing fossil fuels could backfire by cutting prices and boosting demand in developing nations.

Saudi Arabia’s energy ministry didn’t respond to questions. The nation announced its own net-zero target soon after the UAE did, though it aims to neutralize planet-warming emissions a decade later, by 2060. The UN doesn’t count emissions generated outside a country’s borders, so both nations could continue to export fossil fuels while technically achieving their goals.

The Saudi government has said it will invest more in solar and wind energy and rely heavily on carbon capture technology. At the same time, the Kingdom has said oil demand will remain strong for decades and it is spending billions of dollars to boost the country’s production capacity.

OPEC Secretary General Mohammad Barkindo has also urged Egypt and the UAE to redefine the conversation on oil. “These two COPs have the potential to address these challenges — energy inclusiveness and investment,” he said. The meetings can be a “reset” and show that oil and gas production and climate change goals aren’t “mutually exclusive,” he said.

But the risk is that boosting fossil fuel supply locks in production beyond the current crises, says Joeri Rogelj, a member of the EU Scientific Advisory Board on Climate Change. That will make it harder to reach the Paris Agreement’s stretch goal of limiting global warming to 1.5 degrees Celsius from pre-industrial levels, a target that’s already in jeopardy.

And there’s another way of looking at the situation. While the war will force nations to take a more hard-headed approach to tackling climate change, it should also help them realize that their national security depends on switching to homegrown clean energy, says Christiana Figueres, an architect of the 2015 Paris Agreement. “What I expect to see as of this year, and the rest of the decade, is a change in tone that is really about national security, even for the West,” she said.

Still, the current geopolitical environment means there’s a low chance that November’s COP meeting will end with consensus on the need to phase out unabated oil and gas consumption, according to Meyer from E3G. All countries have to agree on the final document at the end of the summit, meaning any single nation can derail the entire process.

Al-Mazrouei, the UAE minister, underscored how challenging it will be for other nations to convince oil producers to get on board in light of recent events. “At COP26, they asked financial institutions to limit the financing of new oil and gas projects,” he said, “and six months after that, they’re asking for more oil.”