Energy This Week: tense talks at Cop29, new US energy secretary - fossil or future?, & power cuts hit Iran

https://www.thenationalnews.com/newsletters/energy-this-week

Oil suffers weekly loss on continuing China gloom

Yet more pessimism over Chinese demand dented oil prices, which dropped on Friday as crude recorded a weekly loss. Brent closed 2 per cent lower at $71.04 per barrel. China’s refineries processed 4.6 per cent less oil in October versus a year earlier. Prices gained more than $2 on Monday, however, as a technical fault halted output at Norway’s key Johan Sverdrup field, and there was a threat of escalation in Russia’s war against Ukraine.

The International Energy Agency predicts a surplus of more than 1 million barrels per day next year, as output from the Americas rises, even if the Opec+ group sticks with its cuts. However, bank UBS believes that statistics are missing part of global oil demand, and that US oil production may run out of steam, possible gleams of light for the market. Former Opec member Angola intends to maintain its oil production at 1.1 million barrels per day to 2030, by investing in marginal fields and cutting taxes to encourage investors.

Gas shortages lead to power cuts across Iran

Iran has been struck by power cuts for several hours at a time on a per-neighbourhood schedule. With insufficient natural gas to fuel its electricity generation, the country is also running short of the backup of diesel or mazut (low-grade fuel oil). With winter approaching, and tighter sanctions enforcement likely from the incoming US presidential administration of Donald Trump, cuts to gas and power supplies could bring more pain for ordinary Iranians.

More power cuts too in Ukraine, where a volley of Russian missiles and drones has struck power plants as Moscow seeks to freeze its enemy as winter approaches.

Iraqi Prime Minister Mohammed Shia Al Sudani attempted to resolve a protracted dispute over oil, visiting Erbil, the capital of the semi-autonomous Kurdistan Region, last Wednesday. Some progress has been made on restarting the important Iraq-Turkey pipeline and reconciling the region’s independent oil contracts with federal policy.

Qatar and Turkey, strategic partners for some time, signed eight agreements including energy co-operation, among other things, following a meeting of Emir Sheikh Tamim with President Recep Tayyip Erdogan.

US energy secretary candidate has an oil and gas background

Rio de Janeiro was the venue for the G20 meeting this week, which was overshadowed by concerns about the impact of the incoming Trump administration on climate and sustainability action. Mr Trump’s nominee for energy secretary, Chris Wright, is a vocal advocate for fossil fuels, chief executive of a company providing hydraulic fracturing services for shale oil and gas, and says “there is no climate crisis”. He is, though, also on the board of a nuclear power company, and says he started his career in nuclear, solar and geothermal energy.

We’ve broken the 1.5°C target – where does saving the climate go now?

It is clear that we will now exceed the 1.5°C aspiration for limiting global warming, set in the Paris Agreement of 2015. This needs to lead to a rethink – accelerating existing successful policies, but not doubling down on failures, moving past ideological debates on specific technologies, and progressing swiftly on removing atmospheric carbon and cooling the Earth directly.

British oil company Shell has successfully appealed against a Dutch court ruling from 2021 ordering it to cut greenhouse gas emissions, not just its own but those from the products it sells. The appeals court agreed that Shell reducing its “Scope 3” emissions would not cut emissions overall, if customers simply switched to other providers. The court also noted that the company was making progress on cutting its own direct emissions.

Climate change is not one of the top worries for people in the UAE and the wider Middle East. Six per cent of those surveyed globally named climate change or extreme weather as their top concern. Saudi Arabia featured the highest number worldwide saying climate change was not a threat, at 46 per cent, while even in water-short and hot Iraq, the figure was 33 per cent. In India, air pollution is a more immediate threat, with New Delhi having to close all schools on Monday. The air quality index reached 1,743 – anything above 300 being a health hazard.

Tense talks on finance and geopolitics at Cop29

Delegates at Cop29 need to “remain focussed on the imperative to make quick progress”, says Azerbaijan’s lead negotiator, voicing concerns that things are going too slowly. The event is now into its second half. Tense talks continue on a $1 trillion annual fund to tackle climate change, and how responsibility to pay would be assessed.

Cop29 President Mukhtar Babayev issued the Baku Call to address the problems of climate change and conflict. Geopolitical concerns have also affected the conference, with a French minister cancelling her attendance, and Argentina withdrawing for unexplained reasons. “In usual, ordinary situations it is very difficult to protect the environment. Imagine in terms of a war,” says Ahmed Abuthaher, a senior Palestinian environmental official, representing Palestine at Cop29.

Brazil hosts the UN climate talks, Cop30, next year, and has said it will cut its emissions “far beyond what could be expected”. However, it expects developed countries to pay up for climate action, and to acknowledge their historic responsibility.

Island states are “angry and suffering” over climate change, says the chair of the Alliance of Small Island States. A half-metre of sea-level rise could cost three Pacific nations – Kiribati, Tuvalu and the Marshall Islands – $10 billion, or 20 years of their gross domestic product. “We can’t fail them,” says Ibrahima Cheikh Diong, executive director of the Fund for responding to Loss and Damage. The fund, starting with $700 million, is intended to support developing countries in dealing with the unavoidable impacts of climate change. Cop29, intended to be the “finance Cop”, has work to do in raising more money for such assistance.

Women need to have a greater role in climate negotiations, experts and activists told The National. They pointed to the importance of women-led small and medium enterprises. One billion children worldwide are estimated to live in extremely high-risk areas for climate change. And former Olympic gold medallist and world record holder for the 800 metres, Kenya’s David Rudisha, has warned that world records could become a thing of the past as athletes are increasingly hampered by air and water pollution and extreme heat.

Climate warning and water should top Cop agenda

Early warning systems for bad weather “are not luxuries”, says UN Secretary General Antonio Guterres. Just $800 million of investment could save $3 billion to $16 billion a year by alerting people of the approach of storms, floods and suchlike dangers, but half the countries in the world are not covered by such measures. The private sector can do more to pay for disaster prevention. “You don’t need me to die from climate impacts”, a WaterAid charity worker from Zimbabwe, Moreblessings Chidaushe, told The National in Baku. Water scarcity has been moved to the top of the agenda at Cop29, with the Water Declaration to be launched on Thursday. The next UN Water Conference will be held in Dubai in 2026, co-hosted by the UAE and Senegal.

The UAE has launched the Global Energy Efficiency Alliance, intending to double the rate of efficiency improvements by 2030, in line with the UAE Consensus from last year’s Cop28. The platform will share best practices and build on public-private partnerships.

The country is also developing the world’s first “ChatGPT for farmers” to support agricultural innovation. Using more modern seeds could help farmers boost yields and resilience to climate impacts, as a project to grow carrots in Rwanda has shown. Artificial rain could help boost farming in the UAE, under a UAE-US partnership. US company Heka Cloud uses electrical energy to stimulate rainfall.

Masdar advances Central Asian renewable ambitions

Cop29 has brought several deals for Masdar. The Abu Dhabi clean energy company agreed to explore building 3.5 gigawatts of offshore wind in Azerbaijan, in partnership with Socar Green, an arm of the state oil company, and Saudi renewable developer Acwa Power. It signed a power purchase agreement for its one-gigawatt wind farm in Kazakhstan, agreed to develop a one-gigawatt wind farm in the Mingbulak area of Uzbekistan, and will investigate “gigawatt-scale” renewable projects in Albania with state utility Kesh. Separately, Masdar and its partners from China and South Korea have been awarded the 2-gigawatt Al Sadawi solar project in Saudi Arabia. These deals bring it closer to its target of 100 gigawatts of capacity by 2030, from about 20 gigawatts currently.

Sustainable investment giant Actis is considering several deals in the Middle East, including solar and district cooling. Actis is a subsidiary of General Atlantic, the $97 billion growth equity company, and key stakes include a majority share in Dubai-based solar developer Yellow Door, 50 per cent of district cooling company Emicool, and a stake in a green hydrogen project in Oman. Several other private equity companies are looking into renewable and green hydrogen investments in the region.

Joby Aviation, hoping to launch an electric air-taxi service in Dubai, says it wants to be competitive with traditional ground-based vehicles. Its aircraft has a range of 160km on a single charge, and can travel at up to 321kph.

Science shows how Mediterranean dried up in geological time and reflooded in two years

In a past incident of dramatic climate change, the entire Mediterranean Sea dried up about six million years ago, when tectonic movements closed the Strait of Gibraltar. Scientists have now demonstrated how an enormous flood eventually refilled the basin in as little as two years, but left behind a thick layer of salt, which now provides the seal for important gas accumulations.