Abu Dhabi foresees new partnerships for carbon seize when the worth of oil rises
DUBAI, United Arab Emirates – Oil-rich Abu Dhabi and its national oil company seek new partnerships in carbon capture technology as rising oil prices re-focus big oil’s climate change strategies.
“There is no credible way to achieve global climate goals without seriously promoting and ensuring the widespread introduction and storage of carbon,” said Sultan Al Jaber, Minister for Industry and Advanced Technology of the United Arab Emirates and Executive Director and Group of Abu Dhabi National Oil Company (ADNOC) CEO said over the weekend.
Carbon Capture and Storage (CCS) technology aims to reduce the amount of carbon released into the atmosphere through conventional power generation and industrial processes by storing carbon waste in a place where it does not end up in the atmosphere, normally under the earth. Long-term carbon storage is a fairly new concept and its environmental, economic and technical aspects are still being debated.
ADNOC, which produces more than 3 million barrels of oil every day, is committed to reducing its greenhouse gas emissions and promoting carbon storage. It joins a long list of oil companies that have come under increasing pressure to accelerate climate change efforts as higher prices put the industry on a more sustainable path.
We continue to see it as a game changer and are very willing to work with others within and even outside of our industry to enable wider CCS adoption.
Sultan Al Jaber
UAE Minister for Industry and Advanced Technology and ADNOC General Manager
“This goes beyond the oil and gas industry,” said Al Jaber. “I see an opportunity and an important role for carbon capture and storage in sectors that are difficult to decarbonize and that consume the most energy, such as heavy industry, manufacturing and chemistry,” he added.
Al Jaber spoke last week at a CERAWeek virtual panel discussion with Vicki Hollub, CEO of Occidental, and energy economist Dan Yergin, vice chairman of IHS Markit.
Oil prices soared on Monday as Brent crude surged above $ 70 following an attack on Saudi oil plants and after OPEC and its allies decided to maintain production cuts in April. Higher prices are a boon to major oil exporters to the Gulf like Saudi Arabia and the United Arab Emirates, which still rely heavily on oil export revenues to fuel economic growth. Oil prices fell below zero and into negative territory in April last year.
ADNOC recently partnered with French oil major Total to explore ways to reduce CO2 emissions and CCS. The UAE want to reduce their carbon intensity by another 25% over the next ten years.
“We continue to see it as a game changer and are very willing to work with others within and even outside of our industry to facilitate broader CCS adoption,” said Al Jaber.
ADNOC, which plans to aggressively expand its oil production capacity in the coming years, says it can capture 800,000 tons of carbon dioxide annually through its plant in Al Reyadah in Abu Dhabi. As oil production capacity increases, there are also plans to expand the capacity of the program to produce 5 million tons annually by 2030.
“Carbon Capture, Use and Storage (CCUS) must be an important pillar of efforts to put the world on the path to net zero emissions,” the International Energy Agency said in a release last year. “After years of slow progress, new investment incentives and strengthened climate targets are building new momentum for CCUS,” he added.
Al Jaber, who is also the UAE’s special envoy on climate change, didn’t say what kind of partnerships the company wanted to enter into. ADNOC recently stated that it is also exploring the potential of new fuels such as hydrogen, which Al Jaber said shows “great promise as a low-carbon fuel” that could be manufactured on a large scale within ADNOC’s existing hydrocarbon value chain.
Recovery in demand
Al Jaber was also optimistic about the positive impact of vaccines and stimulus programs on the global economic recovery, which is having a direct impact on oil demand.
“At the regional level, we see that one of the most important powerhouses in the world economy, China, has already recovered in GDP and is seeing robust growth again,” he said. “We expect another major player in the global economy, the US, to return to pre-Covid GDP levels this year and continue to grow through 2022,” he added.
Al Jaber also pointed to the improving recovery in oil demand, which fell to lows of around 75 million barrels a day at the height of global lockdowns. “Worldwide consumption is currently around 95 million barrels per day and we expect it to rise above pre-Covid levels by the end of this year,” he said.