Let’s call it The Audacity of hOPEC. AP reported last week:
Saudi Arabia has led a quiet campaign during these and other negotiations “” demanding behind closed doors that oil-producing nations get special financial assistance if a new climate pact calls for substantial reductions in the use of fossil fuels.
That campaign comes despite an International Energy Agency report released this week showing that OPEC revenues would still increase $23 trillion between 2008 and 2030 “” a fourfold increase compared to the period from 1985 to 2007 “” if countries agree to significantly slash emissions and thereby cut their use of oil.
The hypocritical chutzpah is staggering. The head of the Saudi delegation Mohammad S. Al Sabban said:
We are among the economically vulnerable countries….
Many politicians in the Western world think these climate change negotiations and the new agreement will provide them with a golden opportunity to reduce their dependence on imported oil…. That means you will transfer the burden to developing countries, especially to those highly dependent on the exploitation of oil.
First off, for decades now, Saudi Arabia has led the Organization of the Petroleum Exporting Countries in using monopoly practices to keep oil prices higher than they would have been under strict market economics. This caused pain for developed countries like ours, but hardly as much, relatively speaking, as that suffered by the non-oil-producing developing (i.e. poor) countries. I don’t remember Saudi Arabia commenting on the burden that cartel-driven oil prices created for other developing countries.
Second, the Saudi logic about the future impact of a climate deal is exactly backwards from the broad perspective of the burden of all developing countries. If the rich countries reduce their oil consumption, that will necessarily reduce the price of oil compared to what it would have otherwise been.
The head of the Saudi delegation Mohammad S. Al Sabban dismissed the IEA figures as “biased” and said OPEC’s own calculations showed that Saudi Arabia would lose $19 billion a year starting in 2012 under a new climate pact. The region would lose much more, he said.
That is an old study by Charles River, which has done lots of dubious climate analysis for the fossil fuel industry.
In fact, the Saudis will probably be making $200+ billion a year in 2012 from oil sales, and a little climate will not have any noticeable impact on oil consumption by then. Moreover, peak oil is going to drive up prices and reduce demand faster than any climate deal (see World’s top energy economist warns peak oil threatens recovery, urges immediate action: “We have to leave oil before oil leaves us”).
Many inside and outside the Arab world were having none of the Saudis nonsensical, special pleading:
An Arab environmental group IndyACT and the environmental group Germanwatch released a report Thursday accusing Saudi Arabia of blocking key elements of the negotiations. Among their tactics, the groups said, was slowing negotiations by insisting that the economic woes of oil producers be included in the text.
“Despite the variability in the region, the current Arab position is mainly focused around protecting the oil trade rather than saving the planet form the adverse impacts of climate change,” said Wael Hmaidan, the executive director of IndyACT.
The NYT reports:
Petroleum exporters have long used delaying tactics during climate talks. They view any attempt to reduce carbon dioxide emissions by developed countries as a menace to their economies….
“It is like the tobacco industry asking for compensation for lost revenues as a part of a settlement to address the health risks of smoking,” said Jake Schmidt, the international climate policy director at the Natural Resources Defense Council. “The worst of this racket is that they have held up progress on supporting adaptation funding for the most vulnerable for years because of this demand.”
Saudi Arabia is highly dependent on oil exports, which account for most of the government’s budget. Last year, when prices peaked, the kingdom’s oil revenue swelled by 37 percent, to $281 billion, according to Jadwa Investment, a Saudi bank. That was more than four times the 2002 level. At one point in 2008, the average gasoline price in the United States surpassed $4 a gallon.
Saudi exports are expected to drop to $115 billion this year, after oil prices fell. American gasoline prices are hovering around $2.50 a gallon.
The one-year swing in the kingdom’s revenues shows that oil prices are likely to be a bigger factor in Saudi Arabia’s future that any restrictions on greenhouse gases, said David G. Victor, an energy expert at the University of California, San Diego.
Mr. Victor dismissed the Saudi stance as a stunt, saying that the real threat for petroleum exporters came from improvements in fuel economy and rising mandates for alternative fuels in the transportation sector, both of which would reduce the need for petroleum products. “Oil exporters have always, in my view, far overblown the near-term effects of carbon limits on demand for their products,” Mr. Victor said. “For the Saudis this may be a deal-breaker, but the Saudis are not essential players. In some sense, one sign that a climate agreement is effective is that big hydrocarbon exporters hate it.”
Hear! Hear!
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Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
If they are so conserved about future income, they have several options. One thing they can do is simply take some of the billions they are earning and invest it in a trust for future generations as some European countries do.
Another thing they can do is reduce their production. This will have the benefit of raising prices (and their income), saving more oil for the future (when it will be worth more), and also helping to reduce global emissions at the same time because higher prices will reduce demand. Win-win senario.
Wow, that really takes guts. Gouge the consumer for decades, then when they realize that your product is bad, make them pay even more to reduce their use? Are you kidding?
If they are that worried about future revenue, invest what they have (preferably in more eco-friendly technologies). I have already paid enough for oil and certainly don’t want to pay them more not to use it.
I laughed my ass off when I read about this.
I’m spreading this story around to my denier friends in hopes that it may help turn them into climate change believers!
So, where were all the PAYMENTS they were making to us when their oil income was off the charts last year?
Funny, they seem to have gotten some crazy idea that they keep all the upside, but are insured against the downside. Now, why does that sound so familiar?
One of Many
This is just one of many reasons why it’s VITAL for the public to gain a MUCH better understanding of our own companies who have roles in the combined oil-and-climate situation, beginning with ExxonMobil, the largest.
Can you imagine this? We are in a period when several of our very largest companies (incorporated in the U.S., benefitting from U.S. stability and protection, headquartered in the U.S., and etc.) apparently want to keep our harmful oil habit going, when (at the same time) some countries that produce the oil want us to pay them to not produce it, and when we need to dramatically reduce our use of oil and other hydrocarbons if we expect other countries to do so, i.e., if we expect to address the climate problem.
What a bizarre situation we have gotten ourselves into! What’s worse, we allow ourselves to remain in that situation, putting up with the sort of “BS” we get EVEN FROM OUR OWN COMPANIES in the industries in question!!
Are we going to try to walk some sort of impossible Orwellian tightrope as the media allow ExxonMobil to confuse and mislead the public and try to influence policy in harmful directions, even as we are subject to the sorts of demands mentioned in this piece as well as serious messages from other countries that WE must reduce our emissions dramatically if we expect them to do so?
What’s up? Is anyone awake? New York Times and other media: When are you going to shine light on these matters?
?????!!!!
Steps
I’ve just left a message for Andrew Revkin (at The NY Times) asking, again, why The Times is not examining and covering the ExxonMobil issue, Big Oil, and related matters well and in context. Why does The Times remain silent even as ExxonMobil uses the Times’ own front page (as well as double-page spreads) to foist its confusing, misleading, and very narrow portions of the story, selectively, onto Times readers and the general public?
I’m also hoping that key organizations that are supposed to be monitoring journalism, and catalyzing excellent journalism, will get into this. Better late than never. But SOON. Where is the Columbia Journalism Review on all this?
And I’m also hoping that we can get into the ExxonMobil issue, and related matters, specifically and explicitly here at ClimateProgress. ExxonMobil is the largest U.S.-headquartered oil company. It is a One Trillion Pound (plus) Elephant, getting away with nonsense and irresponsibility.
What gives?
The irony is that with all that sun-drenched desert, Saudi Arabia has the potential to become the “Saudi Arabia” of solar energy.
I guess the Saudi royal family are looking at the massive handouts to the coal, oil and nuclear industries in the “bipartisan compromise” Senate legislation, and they figure they should get some too. Maybe there is a way to include them in a cap-and-trade system.
I read this story elsewhere today … no one would seriously give the Saudis a red cent would they? I mean of course conservation, whether by carbon tax, cap&trade, technological breakthrough, or personal virtue would be financially bad for OPEC nations. So what? How can they possibly have any influence on all the other countries agreeing to use less oil? Supposing somebody developed a miraculous battery/ultracapacitor tomorrow, and we started phasing out gas cars for electric almost immediately. The Saudis would go back to being a relatively poor nation in a desert. They could refuse to go along. They could drive gas powered Hummers for a very long time based on their own oil production, but they couldn’t force the rest of us to.
Am I missing something? Is there any reason any of the important players in Copenhagen would consider this Saudi request as anything other than a joke?
sorry…is GWB geh?
Saudis citizens may need to start working and doing rather than managing imported workers.
Nice article Joe, especially the moral contrast between the new wish list and S.A.’s historical
indifference to poorer neighbors.
9. GFW Am I missing something? Is there any reason any of the important players in Copenhagen would consider this Saudi request as anything other than a joke?
Ultimately it’s all about votes and voting blocks. In the past such agreements followed automatically from consensus by major players. But this treaty will have something for everyone. A survey of relevant UNEP / IPCC voting rules would be interesting.
Seeing that George W. Bush is no longer the president of the USA and, therefore, no longer making mid-East policy, a photo of President Obama with the Saudi monarch may be more newsworthy in the post above. Although, I can understand why it might not be included as there was some debate as to whether or not the president actually bowed when greeting the despot. I cannot recall any such image of his predecessor in such a pose. Maybe someone else can though: http://www.haaretz.com/hasen/spages/1077463.html
Our electric company is in the middle of doing the same thing. People drastically cut back this year, faced with loosing their jobs and high energy prices. Now the electric company says that they cannot make their guaranteed profit margin, and they want permission to raise all our rates to make up their shortfall. So, we the consumers get to pay more for less. If we hadn’t conserved, we would not be getting a raise in rates and would be getting more electricity for the same price.
I feel like the Red Queen: running twice as hard to stay in the same place.
sb gypsy, anytime you hear anyone promote “decoupling”, that’s what you’re experiencing right now. Decoupling basically means that utilities get to game the system so that they bring in a guaranteed amount of revenue from each customer, even if the customers cut their consumption of electricity. Nice, huh?
….this is too funny…..did karl the “brain” take a job advising them of orwellian speak…..just hilarious…….
They can ask. We can laugh.
the saudi’s got rich from americans, past time, give them the boot. we need thomas jefferson or a teddy r. to clean out the senate and congress. maybe we should take a hint from the horror films, give the villagers a torch.
Eight years of science denialism in the Bush Administration has caused Americans to not get the correct message about global warming and its future impact.
I am hopeful the current Administration can help to change that message and I will be very suprised if the Saudis make headway with the new Administration.
Saudi Arabia, the SAME COUNTRY that just subjected a news reporter to multiple lashes for talking about sex. The SAME COUNTRY where women cannot drive, vote, or hold down a job. These 6th century pedophile worshiping pigs do not deserve any more money from anyone.
This Saudi reaction seems similar to what I see the rich doing in this country: When the recession hit lots of prices started rising. They wanted to make sure they didnt have to lower their standard of living – so they decided to shift the burden further onto the less well off.
So…
The Saudis and the rest of the ‘oiligarchs’ get to keep the gold mine while American workers get the shaft…
Sounds like multinational corporate business as usual.
We don’t have to pay off the Saudis, or any other extortionists — and we don’t have to keep up the legal fiction of the corporation-as-person either. The sooner we abandon that piece of idiocy the better.
This is mindboggling. I personally think its hilarious that James Inhofe and Sarah Palin are lining up with….the Saudi’s – their natural allies. Someone should be running ads linking Inhofe with the Saudis in the US.