Sopuruchi Onwuka

Whereas the nations that currently rely on petroleum income make vain efforts to assert the resilience of petroleum demand in the prevailing energy transition saga, industrialized nations of the world pushing climate agenda are also determined to migrate demand from fossil fuels.

Ad >>>

The polarized standpoints in the global energy debate, The Oracle Today reports, leaves Nigeria and other oil dependent economies with determined efforts to continue driving arguments for just and equitable energy transition.

The proponents of equitable energy transition stand in defiance of the prevailing and strengthening global convergence on development of new energy forms that leave little or no footprint on the environment. The oil economies still cling on the hope that the value of the petroleum commodities in the global space will continue to linger with the slow pace of green energy development.

Under the “UAE Consensus” deal reached at the just concluded 28^th summit if the Conference of Parties of the United Nations Convention on Climate Change (UNCCC), countries are called to contribute to a global transition effort, rather than being outright compelled to make that shift on their own. The text of the Dubai decision includes agreements to triple the deployment of renewable power and double the rate of efficiency gains by the end of the decade.

A separate COP28 agreement, reached at the start of the summit, makes operational a hard-fought climate fund for addressing the losses and damages.

There is also a line about transition fuels that many will see as an endorsement for the long-term use of natural gas.

At the just concluded global debate at the COP28 in the United Arab Emirates ( UAE), arguments propounded by the key oil dependent nations like Nigeria and other members of the Organization of Petroleum Exporting Countries (OPEC) failed to resonate, drowned in the deafening chorus of global call for rapid transition of energy demand from petroleum sources.

The OPEC had asked members to lobby against any text that targets fossil fuels rather than emissions, earning a clause that watered down severity of the decision but failing to exert significant influence on the final resolution brokered by a leading member.

From Nigeria to the African Petroleum Producers Organization (APPO), OPEC and OPEC+; the arguments for just transition and absolution of African nations from responsibility in the prevailing climate mess appear to be losing global audience as even the biggest oil economies in the world, including Norway and Saudi Arabia align with energy transition targets and deadlines.

Thus, it was a smooth sail for the industrialized West and climate activists at the COP28 climate talks to commit the world to an agreement that would henceforth craft energy policies that would deemphasize petroleum and coal in preference for new energies that have low carbon footprints on the climate.

Interestingly and to the chagrin of oil dependent countries, OPEC member UAE which hosted the event actually championed the deal that calls for countries to quickly shift energy systems away from fossil fuels in a just and orderly manner; pointing at the hottest year on record which led to droughts and devastating wild fires.

The Sultan of UAE, Ahmed Al Jaber, who was the president of this year’s UN-sponsored summit, brokered the agreement on the need to significantly cut fossil fuel use while giving consideration to oil producers. The final agreement calls for countries to quickly shift energy systems away from fossil fuels in a just and orderly fashion.

Ahmed Al Jaber is the chief executive officer of Abu Dhabi National Oil Company (ADNOC). As the President of the Conference of Parties (COP), he decided on submissions made by debaters, declaring that “we have confronted the realities and sent the world in the right direction.”

 “We now tomorrow move forward in implementing this,” Morgan said. “Every investor should understand now that the future investments that are profitable and long-term are renewable energy — and investing in fossil fuels is a stranded asset.”

Investors were also watching for progress on a new carbon offsets market overseen by the United Nations, but talks on that front collapsed after the European Union and some Latin American countries led a push for stricter standards. That means the launch of the program, which governments will be able to use to meet their green pledges, will be delayed.

He forged a pact between more than 50 companies to reduce emissions from their own operations. It said nothing about levels of oil and gas production, but a pledge to reduce pollution from methane – 80 times more dangerous than carbon dioxide – to near zero by the end of decade could have a material impact on emissions.

Conference parties see the declaration and decision by Ahmed Al Jaber as significant, given his position as key delegate and head of the national oil company of an key oil producing state in the ranks of OPEC. The COP28 president also played down the tone of the deal, refraining from calling for phase out and emphasizing curb of fossil fuel use.

The COP28 deal, as significant as it becomes, means nothing if oil producers and consumers do not match it with the economics of business.

“An agreement is only as good as its implementation. We are what we do, not what we say,” Ahmed Al Jaber said. “We must take the steps necessary to turn this agreement into tangible actions.”

The Oracle Today reports that governments and agencies, despite setting polices that govern environmental protection, are more interested in protecting domestic economies and wellbeing of citizens than creating local crises that threaten their existence.

Second, the COP28 deal is more of persuasion than enforceable law. Sovereign countries prioritize their economic aspirations and energy needs ahead of international climate conventions; explaining the resurgence of coal use and reclassification natural gas during the oil price crises associated with the Ukraine war.

Countries like India, China and Germany have in the midst of energy transition campaign raved up gas and coal use in firing power plants and keeping industries running. Producing countries and energy companies are under lean restraint in taking demand advantage in the international energy market where sovereign countries are unrestrained to seek supplies.

It is at this international marketplace that the real battle for energy transition in located. The relationship between demand and supply therefore determines the success of global climate deals and shift of demand from one form of energy to another.

This explains why consumption of fossil energy has remained unabated since the Glasgow climate deal. And the incident of Russian invasion of Ukraine has since reconfigured the Glasgow deal, as signatories reactivated coal plants and initiated gas import facility projects.

The realities of energy demand amplify the position of Nigeria and other energy producing economies which insist that energy transition must be just and equitable in allowing nations in acute energy deficit find convenient path out of emission responsibility.

General Secretary of APPO, Dr Omar Farouk Ibrahim, insists that the demand window still exists for African countries that host emerging hydrocarbon frontiers explore market opportunities and also guarantee their internal energy security.

In calling for just energy transition, he points at the massive use of fossil fuel in building huge world economies while leaving African countries as exploited resource sources and butts of climate impact.

At its several meetings, the APPO members have severally reiterated their determination to continue exploitation of fossil fuels as primary energy for driving development and powering homes and business for surging youth population.

Eminent industry analyst and Chairman if AA Holdings, Mr Austin Avuru, stated in a chat that petroleum and coal would not entirely phase out from the global energy mix in the medium to long term. He pointed at various non-fuel products as lubricant, fluids, petrochemicals and insecticides that rely on fossil fuel.

Mr Avuru also stated that that despite the significant milestones recorded in phasing transportation energy from fossil fuel to battery, other key sectors of the transport industry including aviation and shipping would rely on fossil for a long time to come.

He called on investors seeking profit to lay out funds for enhanced production of petroleum resources in the immediate to short term, arguing that the prevailing level of demand and proportionate level of price strength in the market lay proposition medium term lucre in the industry.