RIYADH, Saudi Arabia (ResourceInvestor.com) -- While the United Nations' Intergovernmental Panel on Climate Change (IPCC) was meeting in Valencia, Spain, executive secretary of the UN Framework Convention on Climate Change (UNFCCC) was in Riyadh this week to participate in the Third OPEC Summit. Yvo de Boer carried the message that the fight to mitigate climate change presents considerable economic development opportunities for oil producing nations.
"International action on climate change is a war against emissions, not a war against oil," de Boer stated during a panel presentation during the opening day of OPEC 3's two-day Ministerial Symposium on Wednesday. "Oil will continue to play a pivotal role in the global energy mix for many decades to come, not least due to growing global energy demand. But oil will have to be decarbonised with adequate technologies. OPEC can deliver a big part of the solution to climate change," he added.
OPEC, the Environment and CCS
The environment is one of two main thematic pillars and motive forces at OPEC's third summit. Energy security and environmental concerns are the two main challenges facing OPEC members, Dr. Adnan Shihab-Eldin stated during the Symposium's second session "Energy and the Environment". While the first is cyclical in nature, the second has been "steady and increasing over time," he noted, producing the impression that oil producers were something of an "endangered species."
OPEC appears to be giving serious consideration to devoting substantial organizational resources to the development of carbon capture and sequestration technology (CCS) as a means of taking the carbon out of fossil fuel production, though it was noted that the bulk of CO2 emissions are produced during consumption, when petroleum and its derivative fuel products are burned.
Shihab-Eldin pointed out that although CCS's roots lie in efforts to enhance recovery in oil fields otherwise considered depleted, "We can turn this around and focus on reducing carbon emissions while also increasing the productivity of oil fields." Doing so has the potential to add 500 billion barrels to OPEC oil reserves during the next 30 to 40 years, "almost 40% of current reserves," he added.
The need to push CCS forward, however, calls for an international funding mechanism, according to Shihab-Eldin. He then raised the possibility of OPEC proposing and pledging substantial seed capital for an international program funded by oil producing and consuming nations devoted to carrying out such an effort which gave rise to speculation that a more substantial and detailed announcement would be forthcoming later in the week.
OPEC and the UNFCCC
De Boer's presence at the OPEC summit while the IPCC, which he leads operations in Valencia to pave the way for the UN Climate Change Conference and the establishment of a post-Kyoto Protocol "roadmap" December 3-14 in Bali, highlights the pivotal role oil and OPEC can play in global efforts to reduce greenhouse gas emissions and mitigate climate change.
"Whilst there are several options that would allow oil exporting countries to use the efforts that target climate change to drive a global transformation away from carbon-based development in their economies, a political solution on the global scale post-2012 under the umbrella of the United Nations is urgently required," de Boer said during his second session Symposium presentation.
He noted that UNFCCC climate change progress reports project a 50% increase in global greenhouse gas emissions by 2050 if no action to reduce them is taken, resulting in a global average temperature rise of 3 degrees centigrade this century.
Greenhouse gas emissions as covered in the Kyoto Protocol have increased by 70% between 1970 and 2004 with CO2, the largest contributor, having increased by about 80%, according to the first part of the UNFCCC's Fourth Assessment Report.
Extreme weather events, including droughts, floods and storms, reduced water availability and decreased food security are among the impacts projected by the IPCC if no emissions reduction efforts are taken on a global basis. "The poorest and most vulnerable across the globe will be the hardest hit by climate change impacts given their limited resources to cope and adapt. Across the globe, the impacts of unmitigated climate change will disrupt economic activity, much more so than this year's extreme weather events, including the recent floods in Africa or the cyclone that hit Oman in June," de Boer stated in his Symposium address.
Encouragingly, de Boer noted that according to scientists, "Speedy and concerted international action can still avoid some of the most catastrophic projections, but this does mean that political answers commensurate with the IPCC's findings have to be urgently provided."
The IPCC has singled out carbon dioxide capture and storage, or sequestration (CCS), as the most promising technology for the rapid reduction of global emissions - reductions that could be as high as 55% by 2100, according to de Boer. "As part of a portfolio of solutions, CCS is an important bridge to a more sustainable energy system and therefore a key solution for combating climate change," he said.
Development and use of CCS on a large scale will require stable, market-based funding mechanisms that will close the gap between the costs of oil and gas production with and without CCS, however, de Boer pointed out.
"A continuation of the carbon market post-2012, i.e. beyond the first commitment period of the Kyoto Protocol, could enable CCS to be included in the Clean Development Mechanism (CDM). This can be further enhanced by strengthening the use of the CDM and the development of new market mechanisms under a future climate change regime, and by promoting emission intensity criteria in a future green box," he maintained.