Oil Companies Are Fine With Call to Move Away From Fossil Fuels

Oil industry executives on Wednesdaysaid they more or less backed the agreement coming out of the United National climate summit in Dubai, despite its language calling for “transitioning away from fossil fuels.”

“We support the outcome of COP28,” said a spokesman for Shell, Europe’s largest energy company.

Eni, the Italian energy giant, praised the “great pragmatism” of the meeting.

Saudi Arabia, the de facto leader of OPEC, which had raised objections to an early draft of the agreement, endorsed the final deal, saying it left countries free to choose their own direction in addressing climate change.

“Dictating things has been buried,” said Prince Abdulaziz bin Salman, the Saudi oil minister, in an interview with Al Arabiya television. “And so people are free in their choices,” he added. The Saudi minister also said the COP28 deal would not have an impact on the country’s ability to sell crude oil, according to the outlet.

The agreement’s appeal to oil producers is probably the lack of requirements to take specific actions. As a result, countries can choose their own pathways to reduce the greenhouse gas emissions that cause climate change. The sweeping agreement, approved by diplomats from nearly 200 countries, even seems to suggest a role for natural gas, a fossil fuel that has attracted heavy investment in recent years from large oil companies, in “facilitating the energy transition.”

The leaders of producing countries had worried that the meeting might come up with stricter prescriptions to curb the use of fossil fuels. That would pressure the oil and gas industries, whose revenue often sustains their governments’ budgets.

In a letter last week that seemed to reflect such unease, the OPEC secretary general, Haitham Al-Ghais, urged the 23 members of the producers group and its allies, known as OPEC Plus, to “reject any text or formula that targets energy i.e. fossil fuels rather than emissions.”

After the conference ended on Wednesday, he praised “the consensual and positive outcome,” in a joint statement with his counterpart in a natural gas exporters group.

In the end, oil producers seem to have managed to ensure that language that plays to their strengths was included in the agreement.The agreement also calls for “accelerating” carbon capture and storage, a technology that has been criticized by environmental groups for having the potential to extend the use of fossil fuels.

While the focus of COP delegates was on making sure there was language about “fossil fuels” in the final document, the energy industry also seems to have had plenty of input. The Saudi oil minister was almost embarrassingly frank about his delegation’s access at the conference, which was managed by Sultan al Jaber, the chief executive of Adnoc, the state-owned oil company based in Abu Dhabi.

“We were given priority that I don’t think I have ever seen,” the prince said.

Despite appearances, wealthy oil-producing countries like Saudi Arabia and the United Arab Emirates, along with the larger energy companies, are willing to make at least modest investments in cleaner energy technologies. They realize that with temperatures hitting records and countries like Canada hit with wild fires, a gradual change in energy use is inevitable.

Smaller oil companies may not have the skills or the financial resources to make such investments. Their interest is in being able to produce oil and gas as long as there is a market for these fuels.

“Demand for affordable, reliable energy will continue to rise as global population increases, and the world will need more sources of energy, not fewer,” said the American Petroleum Institute, a trade group based in Washington that represents a wide range of companies, said on Wednesday.

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