So, an Oil Cartel Walks Into a Climate Summit … – Freedom Voice

In a far corner of the temporary village housing the United Nations climate summit, the world’s largest cartel of fossil fuel producers plied skeptical young activists with chocolate and free pens.

It was Thursday afternoon. A continent away, in Vienna, the cartel’s members were voting to give the summit what amounts to another very small climate treat: at least a temporary reduction in oil and gas drilling. That’s the opposite of what President Biden, who has made climate policy a top priority during his administration, is delivering from the United States.

It was an opening-day irony for a COP28 summit that is already full of them, from its host country down to the so-called OPEC Pavilion in a building that is marked “Urbanisation & Indigenous Peoples” on the outside.

Tens of thousands of delegates are descending this month on Dubai in the United Arab Emirates, which is a member of the Organization of the Petroleum Exporting Countries and a major oil producer. Those delegates are celebrating an accelerating global transition toward low-emission sources of energy like wind and solar power. But expanding renewables is not enough to save the planet, scientists warn, so many delegates are demanding that the world rapidly phase out its use of fossil fuels.

The summit is nowhere near consensus on how to do that.

The members of OPEC decided to do a small version of it, at least for the first three months of next year. They agreed to limit oil production voluntarily on a temporary basis by about two million barrels of oil a day.

The move was motivated by profit calculations, not emission concerns. It is still a far cry from the sharp reductions in fossil fuel use that the International Energy Agency warns is necessary to stabilize global temperatures before catastrophic warming takes hold.

“Reducing fossil fuel emissions means reducing fossil fuel demand,” Fatih Birol, the agency’s executive director, wrote online on Thursday. “There is no way around this.”

Demand for oil is still growing globally, but at a slower rate than it did last year. That diminishing improvement, and the prospect that demand could actually begin to fall in the near future, has changed the economics of the global energy market.

That market is increasingly shifting against oil heavyweights like Saudi Arabia and Russia, which both belong to what is known as OPEC Plus. And they are a big reason that OPEC has restricted production and set up shop on the fringe of the conference’s Blue Zone in Dubai, handing out booklets in a cramped office space no larger than a studio apartment.

Consumers in China, the United States and other large economies are increasingly choosing electric cars and trucks over gasoline-powered ones. Government policies around the world have driven major improvements in fuel economy and other energy-efficiency measures.

The International Energy Agency predicts that global demand for oil, natural gas and coal will peak by 2030 if governments make good on their pledges to do even more to reduce emissions. OPEC officials say that peak won’t come until 2045. But cartel countries can already see how slowing demand is hurting their prices and profits. They are trying to keep prices from collapsing further.

So the countries are moving to restrict supply, choosing to keep millions of barrels of oil in the ground each day that otherwise would have been extracted, in the hope of selling the rest of their oil at a higher price.

That’s basic cartel economics. It will have at least a temporary effect of raising the cost of gasoline and other petroleum products. That should make people buy less of those products, though it could also encourage some additional drilling in non-OPEC countries by keeping prices higher than they would have been.

The move might have an even larger effect if not for the renewed drilling boom in the United States, which is producing one million more barrels of oil per day than it did a year ago and helping to reduce prices. American production accounts for 80 percent of the increase in the global oil supply this year, the energy agency has calculated.

OPEC, in effect, is losing power in the oil market at a time when oil is losing power with cost-wary and climate-conscious consumers.

Against that backdrop, OPEC set up its modest exposition space in Dubai. Employees handed out pamphlets with titles like “The Story of Petroleum” and chocolate bars wrapped in OPEC-branded packaging. They showed off a diorama of a Saudi project to capture carbon dioxide emissions from fossil fuel plants and then store them or put them to use by injecting the compressed gas into new drilling sites.

The employees patiently answered a reporter’s questions about what it was like to be an oil cartel at a climate conference.

Hind Zaher, an OPEC public relations specialist working the pavilion, said that visitors had been friendly and knowledgeable. “Many people are coming, and they are eager to learn about OPEC,” she said. “It looks good for the first day.”

During a 15-minute visit to the pavilion in the afternoon, two young summit attendees stopped by. One of them asked for directions to another building.

The other asked about the free pens.

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