Energy This Week
Opec even more bullish on long-term oil demand
Israel’s escalating conflict with Lebanon's Hezbollah and a large economic stimulus package in China drove oil prices up nearly 2 per cent on Tuesday. Brent crude closed at $75.17 per barrel.
Last Wednesday’s large US interest rate cut helped strengthen oil prices. Brent crude slightly dipped on Friday, but gained $1.74 over the week. US crude inventories fell more than analysts had expected. Still, BMI, a part of Fitch Solutions, expects oil prices to average $78 per barrel next year, down from $81 this year, and cites a market in surplus because of a “surge of non-Opec+ supply”. China’s demand has declined year-on-year for five consecutive months, and is now down about 1.7 million barrels per day from its post-pandemic high in February.
Opec is growing more optimistic in its longer-term outlook. Its latest annual outlook sees growth in oil demand out to 2050, powered by India, the Middle East and Africa, and a slowdown in electric vehicle sales. The producer group boosted its medium-term outlook to 111 million bpd of demand in 2028, up 800,000 bpd from its view last year, encouraged by falling inflation and interest rates. This forecast is significantly higher than that of the International Energy Agency, which sees demand peaking in 2029 at 105.6 million bpd. The oil exporters’ group believes 70 per cent of vehicles on the road in 2050 will still be powered by combustion engines rather than electric motors.
The UK’s legacy oil and gas industry is struggling due to policy uncertainty and high taxation. Even on a net-zero path, the country’s energy security, economy and environmental considerations require the new Labour government to provide a balanced policy that makes the most of its traditional resources and transitions them into new energy systems.
An explosion at a coal mine in Iran’s eastern Tabas region has killed at least 31 people. Iran mines about half of its coal consumption domestically, but has suffered from lax safety standards, resulting in several accidents. And the Jawlani community in the Israeli-occupied Golan Heights are unhappy with the installation of a wind farm in their area. A live audio essay performed at Al Serkal Avenue on Saturday highlighted the project’s noise pollution.
UAE president’s US state visit brings energy progress
As President Sheikh Mohamed becomes the first sitting UAE president to make a state visit to the White House, energy is a key issue on the agenda. As well as co-operation on space, defence and artificial intelligence, the joint leaders’ statement references the success at Cop28, the circular economy, geothermal energy, critical minerals and methane reduction.
The UAE and US have been collaborating through the Partnership for Accelerating Clean Energy (Pace). Under Pace, Adnoc has taken a 35 per cent stake in ExxonMobil’s blue hydrogen and ammonia production plant in Texas. UAE-based Averi Finance will facilitate $5 billion of investment to support the Power Africa initiative in building electricity generation and power lines. The UAE co-operates with the US on civil nuclear power, and recently established Plynth Energy will invest in Zap, a US company developing fusion.
The UAE’s Masdar is committed to open trade in clean energy systems, despite supply chain disruptions and constrictions, says its chief executive Mohamed Al Ramahi.
Sheikh Hamad bin Mohammed Al Sharqi celebrated 50 years as Ruler of Fujairah on September 18. The emirate has become a key part of the nation’s energy industry, through its oil storage, export and ship refuelling operations.
Cop28 funding bringing renewable progress – but more needed
The UK's previous Conservative government ran “a fossil fuel government in a renewable era”, Foreign Secretary David Lammy has said , reflecting on its conservation efforts. “The agreement on loss and damage at the last Cop was an inspiring example of what the world can achieve by working together,” he added.
Climate finance was a key part of the Cop28 talks in Dubai last year. Ibrahima Cheikh Diong has been named the first head of the “loss and damage” fund set up at the event. Mr Diong is from Senegal and currently works for the Arab Bank for Economic Development in Africa.
The Catalytic Transition Fund, anchored by a $1 billion commitment from the Alterra fund set up by the UAE during Cop28, has raised $2.4 billion from Brookfield Asset Management. Alterra is progressing towards its $5 billion target, attracting additional investors to support more than 40 gigawatts of renewable energy installation, Dr Sultan Al Jaber, the fund’s chairman, told New York Climate Week.
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And Abu Dhabi’s clean energy company Masdar has agreed to buy Spanish renewable company Saeta Yield from Brookfields and partners for $762 million. Saeta has 745 megawatts of renewable power installed and 1.6 gigawatts under development.
Cop28’s goal of tripling global renewable energy capacity by 2030 is “within reach ”, says a report from the International Energy Agency, but more progress is needed on energy efficiency, electric vehicles, clean cooking, cutting methane leaks and phasing out coal. But Dr Al Jaber told the Global Renewables Summit, on the sidelines of the 79th UN General Assembly, that investment in renewable energy needed to more than triple by 2030 to meet the target.
The UN has adopted a “Pact for the Future”, addressing 21st-century challenges, including climate change. The UAE’s partnership with the International Renewable Energy Agency shows the importance of collective action, as many countries need support to update their national climate change plans by the deadline of next year, writes Nawal Al Hosany, permanent representative of the UAE to Irena. The US elections in November won’t stop progress on renewable energy, says Irena’s director-general, Francesco La Camera, as “the world has changed ” since Donald Trump won in 2016.
Oman to go 100 per cent zero-emission vehicle by 2050
Oman is aiming for only zero-emission vehicles to be sold by mid-century, as part of its net-zero goals. The Sultanate has 1,500 electric vehicles, up from 550 last year, and is actively installing charging stations and creating green corridors for hydrogen-powered lorries. The UAE leads the Middle East on EV market penetration, at 5 per cent. Globally, sales are going through a wobble , as later adopters wrestle with worries about up-front price, range, charging costs, insurance and resale value. But new models and cheaper, better batteries and more consumer familiarity are expected to resolve these hiccoughs.
Sharjah has introduced 10 electric buses on intercity routes, helping to reduce pollution. The 41-passenger vehicles are made by Chinese company King Long. And Dubai start-up Peec converts old petrol cars to electric. Up to 20,000 vehicles are scrapped in the UAE each year and Peec hopes to rebuild 3,000 next year. And electric air-taxis will begin operating in Dubai in the first quarter of 2026, flying at 320 kilometres per hour between Dubai International Airport (DXB), Palm Jumeirah, Dubai Marina and Dubai Downtown.
Communities in climate progress from Yemen to Nigeria to Dubai
Yemen’s long war has left many people without electricity. Iman Hadi Al Hamali has become a pioneering female entrepreneur, building solar power systems and electrifying low-income communities.
A non-profit from Nigeria, LightEd Impact Foundation has won the eighth Sharjah International Award for Refugee Advocacy and Support in recognition of its approach in making portable solar lamps and electric charging stations from waste plastics and electronics.
The SEE Institute at Dubai Sustainable City is the region’s first operational net-zero building . It produces 300 per cent of its own energy needs, recycles all its water, harvests atmospheric water and is offsetting the emissions from its construction.
Dubai International Academy Emirates Hills is one of three finalists for the World’s Best School Prizes 2024 for Environmental Action. It has been running its Eco Club for the past 15 years, with initiatives such as using solar panels and recycling electronic waste.
485 million years of global climate and carbon history highlight today’s peril
The most detailed picture of global temperatures over 485 million years of geological history shows they are strongly linked to carbon dioxide levels, and have varied widely from 11°C to 36°C. At 15°C currently, the Earth is cooler than for much of its past, but is warming rapidly, something that has led in the past to sea-level rises and sometimes mass extinctions.
The Middle East and North Africa region suffers among the highest rate of strokes globally, with high temperatures and pollution contributing factors. The World Heart Foundation found that Kuwait, Egypt and Afghanistan have the worst levels of fine particulate pollution, which contribute to strokes and heart disease.
Climate change means the UAE’s already warm climate will become even hotter, bringing harsher conditions for the country’s roads. A team of scientists in Sharjah has developed a “billion dirham road map ” to save money by optimising the asphalt used to resist higher temperatures and heavy traffic.
Iraq’s environment has suffered badly from decades of war and neglect, and more recently, drought and heatwaves. The country has now launched a new strategy, with targets to protect water and air quality and biodiversity, and to mitigate the impact of climate change. Iraq needs $5 billion annually to deal with climate change, and an urgent $1 billion per year to implement the new strategy. And Brazil’s Amazon and Pantanal wetland regions have suffered their worst wildfires for two decades, heightening fears that the rainforest is turning to a net source from a store of carbon.
G42, the Abu Dhabi-based technology company, has joined up with leading chipmaker Nvidia to enhance the accuracy of global weather forecasts. Climate change, increasingly bringing weather outside historic norms, requires better and higher-resolution simulations. The partnership uses Nvidia’s Earth-2 platform, which employs artificial intelligence to create simulations of global or local weather, faster and using lower energy consumption than traditional numerical models. And aeroplanes could reduce their climate impact by flying higher or lower to avoid ice-supersaturated regions where heat-trapping contrails form.
The “Doomsday Glacier ” in Antarctica will increase its melting “inexorably” this century, a team of British and American scientists has warned. Melting of the Thwaites Glacier could cause more than half a metre of global sea-level rise and spark a further three-metre rise from neighbouring glaciers. The scientists used a submarine robot to find that tidal action brings warmer water to Thwaites’ underside.