Saudi Arabia’s “Green New Agenda” Doesn’t Include Cutting Oil Production

A flame from a Saudi Aramco oil installation known as “Pump 3” burns brightly during sunset in the desert near the oil-rich area Al-Khurais.
Marwan Naamani/AFP/Grist/Getty Images

The world’s biggest petroleum exporter, a country built with oil money, and a founding member of the most powerful oil cartel on Earth, is now styling itself as a pioneer of climate change solutions.

At the United Nations climate conference in Sharm el-Sheikh, Egypt last week, Saudi Arabia held a separate meeting for Middle East and North African countries to go over the details of two separate initiatives aimed at cutting emissions and fighting desertification. The plans include planting 50 billion trees around the region, expanding wind and solar power, and enhancing carbon capture and storage technologies.

What’s not included is any mention of cutting oil production. In fact, the state-run oil company Saudi Aramco, the world’s largest corporate greenhouse gas emitter as well as the world’s most valuable company, said that it’s aiming to raise its production capacity by 2025, even as it plans to cut greenhouse gas emissions to as close to zero as possible by 2050.

Saudi Arabia, in other words, wants to remain an oil power and somehow go green at the same time.

Crown Prince Mohammed bin Salman, de facto leader of the absolute monarchy, sees no contradiction in this, sources told Grist. Taking measures to combat climate change will ensure that Saudi Arabia both diversifies its economy and remains one of the world’s political power brokers, a position it gained as a direct result of its rich petroleum reserves. Selling more oil, Saudi officials have reasoned, can help facilitate this balancing act. And as fuel prices remain high following Russia’s invasion of Ukraine, experts said that the Saudi government is doing what any oil-producing country would do: meeting demand.

“Saudi Arabia knows that its oil will be the last oil purchased and produced in the world,” said Ellen Wald, a historian and scholar of the energy industry, in an email. This, she explained, is because Aramco has by far the lowest cost of production on the planet, at around $2.80 per barrel, thanks to its vast reserves conveniently pooling near the desert’s surface. “So even if every car on the road is an EV [electric vehicle] and all the planes run on batteries, anyone still buying and using oil will be buying Saudi oil.”

The discovery of oil radically transformed Saudi Arabia over the course of the 20th century, turning a largely nomadic desert society into a country with sprawling cities and a highly educated workforce. After an American oil company struck liquid gold in Dhahran in 1938, tapping into what would become the largest source of petroleum in the world, the kingdom was rapidly outfitted with pipelines, refineries, and export terminals. Aramco, as the oil venture came to be called, was owned by Texaco and other American oil companies until the Saudi government bought them out in 1980. With its vast oil wealth fully under the control of the ruling family, the House of Saud, the country deepened its ties with the West and secured a powerful spot at the geopolitical table. It’s one they intend to hold onto.

Two men view the site of the Arabian American Oil Company’s first successful oil well in Saudi Arabia. Hulton-Deutsch Collection/CORBIS /Grist/Getty Images 

When scientists began sounding the alarm about climate change in the early 2000s, Saudi Arabia took up a reactionary position at the United Nations, highlighting skeptical views on the science of global warming and attempting to block climate policy. The kingdom’s tone began to change, however, after the 2015 Paris Agreement, a legally binding international treaty with the goal of limiting global temperature increases to well below 2 degrees celsius compared to pre-industrial levels.

“After Paris, there was no turning back – the world will decarbonize,” said Karim Elgendy, an urban sustainability and climate consultant at Chatham House, a London-based policy institute. Saudi Arabia “realized that being at the table is better than not being at the table. Shaping the outcome is better than being affected by the outcome.”

The following year, the kingdom launched “Vision 2030,” a policy framework meant to diversify the economy and reduce reliance on oil revenues, which have historically accounted for more than 60 percent of the country’s economy. One of its major goals was buffing up tourism. The government also loosened its restrictions on women, allowing them to drive without a male guardian and enter public spaces without headscarves. In 2020, the government announced that Saudi Arabia will go “net zero” within 40 years, a term that refers to balancing the amount of emissions released and the amount of carbon removed from the atmosphere. It will be no easy feat.

Saudi Arabia’s rapid modernization saw the rise of towering skyscrapers, luxury malls, and a proliferation of private cars, along with a new way of life for its 35 million residents. As it developed, the country’s carbon footprint mushroomed until by 2017, Saudi Arabia was the fifth largest oil consumer in the world after the United States, China, India, and Japan. A sizable share of its emissions comes from energy consumption during the country’s punishingly hot summers, when temperatures frequently top 100 degrees Fahrenheit. Another significant portion comes from the operations of the state-run oil company Saudi Aramco, which experts estimate has generated more than 4 percent of global greenhouse gas emissions since 1965.

Despite this, the Saudi government has repeatedly dodged responsibility for contributing to climate change, claiming that it’s a developing nation like Jordan or Ghana. Officials have refused to join other global superpowers at the UN climate summit that are pledging funds for “loss and damage” financing to poorer countries hit hard by climate change.

Earlier this year, Aramco announced that it would be net-zero by 2050. This target is “a big deal because of the impact [it] could potentially have,” said O’Connor, the analyst at Carbon Tracker. “They emit as much as some medium sized countries.”

 

A flame from a Saudi Aramco oil installation known as “Pump 3” burns brightly during sunset in the desert near the oil-rich area Al-Khurais.
Marwan Naamani/AFP/Grist/Getty Images

A flame from a Saudi Aramco oil installation known as “Pump 3” burns brightly during sunset in the desert near the oil-rich area Al-Khurais.

For the rest of the Story: