Gas Leak: The Poison Fuelling COP28

The plan to keep a gassed up grip on the world

Yesterday, the Center for Climate Reporting revealed the fruits of a six-month investigation into how the United Arab Emirates, host of COP28, is using the climate conference as a vehicle to trade more oil and gas. Documents showed that briefings held with ministers from nations around the world featured requests and offers from ADNOC and MASDAR, the nation’s respective fossil fuel energy and renewable energy companies. This, of course, is unsurprising given the President of COP28, which begins on Thursday, is Sultan Al Jaber, chief executive of the national oil company ADNOC and the Chairman of MASDAR. The UAE has insisted Al Jaber maintains impartiality despite having two absolutely oppositional mandates to complete: the growth of the $12 billion oil and gas company, and negotiating to phase out fossil fuels.

Except, the expanding oil production is barely mentioned in the documents released by CCR (which do not contain all briefing notes). This could likely be because the world is running out of available oil, with producers digging further into the earth’s crust in order to procure lower quality shale oil. This, to any capitalist, is a bad investment, and some researchers say the energy return on investment (EROI) will soon mean we use more energy reaching those oil deposits then we could ever hope to get from using them. Essentially, dusk is falling on oil. The Saudis can do all they want to artificially stimulate demand in Africa by flooding the market with cheap cars, or proposing supersonic jets which consumes three times as much fuel, but at this stage in the game such tactics look like desperate moves to sell every last drop.

Gas, though, is a different story. With 125 years left of the stuff which produces 40% less emissions than coal, it has been falsely branded by governments and the fossil fuel industry as a “transition fuel”. The leaked documents reveal ADNOC is offering developing nations around the world to develop and exploit their gas reserves (like helping Venezuela export to Trinidad and Tobago) and offering partnership to Western companies. Not only is this a terrible move for climate, it makes little business sense given the demand for gas in some of the world’s biggest markets is… declining.

Seb Kennedy of EnergyFlux and Peter Sainsbury of Carbon Risk keep a close eye on the energy markets, reporting that demand in Europe is “in secular decline”. This is due to Europe’s dying industry and Russia’s blown-up pipeline. Europe’s gas consumption has been declining for years, not due to excellent climate policies, but rather rampant deindustrialisation as the global goods market allowed for wealthy countries to outsource their dirty work abroad. The industry left, dominated by just six sectors, were hit particularly hard by the destruction of the Nordstream pipeline which imported cheap Russian gas into Europe. As Seb kindly explained to me over email, LNG, the American gas the EU now relies on, is much more expensive than Russian gas.

Another reason for the decline is thanks to batteries. 68 gas plants around the world were cancelled this year alone as giant batteries are becoming cheap enough to be used as back-up power when available renewable energy dips. Gas had originally been touted as filling the energy gaps during intermittent periods in solar and wind, but the rapid improvements in battery technology and availability now make them cost-competitive. Without getting into the details of the negative impacts of mining and availability of materials, giant batteries are still better than gas, and prices will likely continue to drop as their market share increases. So why on god’s greenish earth would the UAE push gas, especially given they also have a renewable energy company?

Fossil fuel infrastructure is very energy-intensive itself: transports, refineries, pipelines. If you want to get gas to your house, you’re going to have to connect to a pipeline which is part of a national gas infrastructure, itself part of an international energy infrastructure. All of this costs capital to build and run, which is why developing nations are forced into partnerships with Western countries in order to exploit these natural resources.

Renewable energy is a bit different: it could be done on mammoth scales, as being proposed, or it could be done more locally. Unlike fossil fuels, renewable energy can be decentralised. A community can raise the capital for their own wind turbine; individuals can install solar panels on their own homes; developing nations are even rolling solar out to off-grid areas. Unlike fossil fuels, such communities don’t need to be hooked up to the main grid. Once the parts are delivered, they could technically enjoy the fruits of a closed circuit.

Boy oh boy does this threaten the political world order, not just run on but run by fossil energy. When fossil fuels were the only viable option, vulnerable nations were forced to put their resources on the global market in order to exploit them as they didn’t have the capital to cover start-up costs. Secondly, these fuels are controlled by a relatively small section of world powers, who thus maintain political relevance and immense lobbying power. This is what is sometimes missing from the climate-energy conversation: Not only does a power like the USA need more fossil fuels to grow its economy, it needs the rest of the world to need those same fuels to keep its position as top dog. The West doesn’t particularly know how to bargain let alone collaborate—how will it trade with the world if it has nothing to offer? How will it maintain control if control is dissipated through a decentralised energy network?

Getting nations hooked on gas ensures a continued presence from political actors who would rather see the world burn than lose their position in the global hierarchy. Without the capital to invest in the necessary infrastructure, developing nations will rely on fossil powers to exploit their resources and enter into the global energy market. Tragically—and critically—these partnerships also ensure such resources are not distributed amongst the home population, but rather put onto the global market who trades at the highest price, meaning that the very nations who are rich in resources the world needs remain poor as all of their natural wealth floods out of their borders, unable to pay to keep it for themselves. Again, this perpetuates a cycle of power, energy, capital and politics which benefits a minority. And this is why bad business decisions sometimes make good political decisions.

This is the energy war playing out at a conference allegedly dedicated to coherent climate strategy. The energy war is the biggest investment made by the Global North and it has rewarded them handsomely—until now. While the West and its allies focussed on harnessing fossil fuels by any means possible, China was snapping up access to precious minerals and expanding its control over materials supply chains, paid for by the Global North’s industrial outsourcing. It’s China who are making leaps and bounds with regards to renewable technology development and deployment. To go green, you need to go through China. The economic boon of this energy transition will likely help them snatch the top spot from the fossil-fuelled USA and all its allies in the West and OPEC, who are doing everything they can to delay the inevitable.

Ironically, beside enormous geopolitical tension with their should-be main customer, the one thing stopping China supplying the world with renewable power is the energy it would take to do so: China still relies heavily on fossil fuels, and, according to the leaked documents, is the biggest customer of ADNOC out of all the Parties. ADNOC is also offering to partner with China to explore LNG opportunities in Mozambique, Canada and Australia. This may seem strange given China’s position as the world’s top supplier of renewable energy infrastructure—why enter the energy war when you’re winning the material war? Because whilst China has muscled into the energy market by way of materials, energy security is still a top priority for every nation and, frankly, the more diverse your supply, the more resilient you are to shocks. An alliance could cut off the gas flow to China fairly easily, if it so chose, just as an alliance of OPEC caused the 1980s oil crisis. But then China would stop its exports of materials to those allies’ industries, at which points the markets would cry out and lobbyists descend on Washington in horror. Of course, at that point, both economic superpowers would be in economic free-fall, rippling out across the rest of the world, causing irreparable damage to markets, industry and people.

Geopolitics in a globalised world is like playing Russian roulette with a fully-loaded gun. The only way to get out unscathed is to drop the weapon.

© Rachel Donald