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Business News/ News / Big Oil Bets on Hot Air in Climate Talks

Big Oil Bets on Hot Air in Climate Talks


The COP28 summit probably won’t change industry expectations of a slow energy transition, but nor will it clarify companies’ long-term future.

The closing plenary at the COP27 climate summit in Sharm El Sheikh, Egypt, last year.Premium
The closing plenary at the COP27 climate summit in Sharm El Sheikh, Egypt, last year.

Oil-and-gas companies are banking on a glacial pace of progress on cutting fossil-fuel use in this year’s round of climate negotiations—and they may well get it.

The U.N. Climate Change Conference, COP28, begins Thursday with an oily twist. It is being hosted by the United Arab Emirates, which pumps more than 3 million barrels of oil a day. The Organization of the Petroleum Exporting Countries, of which the U.A.E. is a member, will have a pavilion at the climate summit for the first time.

COP28’s president, Sultan al-Jaber, is also the boss of Abu Dhabi National Oil Co. The naming of an oil executive to lead the climate talks has been controversial, especially as ADNOC plans to boost fossil-fuel production by up to 20% by 2027. But Jaber says the oil-and-gas industry needs to be involved in talks about transforming the world’s energy system.

Governments attending the summit are expected to agree to a new target to triple global renewable-power capacity by 2030, and to boost energy efficiency. There is debate about whether they should also agree to cut back on fossil fuels. Countries that are most vulnerable to climate change, like island nations, want such a commitment. The European Union and the G-7 have also signaled they would back a new target, although there is wrangling about the wording.

If language about fossil fuels does end up in the summit’s final statement, it would send the clearest signal yet to oil-and-gas companies and their shareholders that demand could start to fall soon. This seems unlikely, though, given countries that rely on the industry to balance their books can torpedo a deal. Around 20 nations get more than 30% of government revenues from fossil fuels, including Saudi Arabia and the U.A.E., according to analysis by the Carbon Tracker Initiative.

Big Oil isn’t prepared for dramatic developments, having largely left the job of cleaning up the global energy system to others. Last year, fossil-fuel players spent $20 billion on low-carbon investments, according to the International Energy Agency—a mere 1% of global clean-energy funding. And of the oil-and-gas industry’s small contribution, more than 60% came from four European companies: Equinor, TotalEnergies, Shell and BP.

Large oil producers are starting to tackle the carbon dioxide they release in day-to-day operations, so-called scope 1 and 2 emissions. At COP, there may be a pledge from the industry to move faster by investing in renewable energy to run oil refineries and reduce the methane emissions belched out during fossil-fuel exploration and production. But this won’t fix the main problem: Most emissions are released when oil and gas are burned.

Oil-and-gas bosses have been reluctant to invest much in low-carbon alternatives such as biofuels, green hydrogen, wind or solar power because they are less profitable than their existing business and often require different skills. Instead, they are relying on carbon capture and storage to allow continued and even increased production, says Natalie Jones, policy adviser at the International Institute for Sustainable Development.

But rolling out this technology on a meaningful scale might be even worse for profits than a shift to renewable energy. According to the IEA, the world will need to trap and store 32 billion metric tons of carbon by 2050 unless it begins to lower oil-and-gas use. Building the necessary network of plants would require more than $3.5 trillion of investment every year between now and 2050—equivalent to the oil-and-gas industry’s entire annual revenue. Operating the facilities would also suck up power equivalent to global electricity demand in 2022.

With no easy options for the energy transition, oil-and-gas companies seem to be hoping the world stays hooked on their core products. COP28 probably won’t change their minds, given its producer-friendly setup. The flip side is that it won’t stop the questions about the industry’s future either.

Write to Carol Ryan at

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