The Many Contrasts of Oil-Rich UAE, Host of the Global Climate Talks

The Washington Post / Chico Harlan

13:14 JST, November 27, 2023

ABU DHABI – Even before visitors leave the baggage claim here, they have a sense of the vision the United Arab Emirates wants to project: A billboard-sized image shows rows of solar panels extending across the desert. The country’s leaders tout a “groundbreaking” transition to a green economy. Even the UAE’s oil company frames itself as a climate-conscious pioneer, with a plan to be net zero by 2045.

But in the nation hosting this year’s global climate talks, the definition of what it means to be green comes with some caveats.

That’s because this Gulf state, in waters miles offshore, is ramping up its oil capacity like never before. It is building artificial islands, with subsidiaries dredging sand and hauling in rock, to use as staging grounds for pumping crude oil from some of the largest petroleum reserves on earth. Its ambition is to provide the world with oil for as long as there might be demand.

“The world, I wish it could run on renewables tomorrow. But the reality is not,” said Musabbeh Al Kaabi, the executive director for low carbon solutions and international growth at Adnoc, the UAE’s state-owned oil company.

As a nation with vast and valuable resources, the UAE feels it is well positioned to rally similarly rich nations to be part of the climate solution, by helping to bankroll the clean energy revolution. But like many other petro states, its investments into renewables and other sustainable projects are dwarfed by what it is putting into fossil fuel extraction and carbon-capture technology that could prolong the use of fossil fuels for decades to come.

In short, the UAE is pushing for a green world that can still have its oil. Which is why the UAE makes for such a divisive host for the U.N. Climate Change Conference in Dubai – known as COP28 – which begins Nov. 30.

The UAE is a country of just 10 million people, vibrant with ambition, full of paradoxes. It has gleaming cityscapes built by oil wealth and a president who has said the end of oil would be grounds for celebration. It has eco-friendly developments – with chicken coups and vegetable gardens – spreading into the exurbs while also producing one of the world’s highest per capita carbon footprints. It has indoor ski slopes miles away from newly built mega solar grids. It has summers of increasingly dangerous heat, and hosts conferences where panelists discuss sustainability and keep cool with outdoor air conditioning.

Once a harsh outpost for nomadic farmers and pearl divers, it is a country that has changed across seven decades perhaps as much as any on earth.

And many of its contrasts are converging at COP. To lead the process, the country has tabbed Sultan Al Jaber, a bespectacled, famously demanding executive with multiple hats. One of his roles involves chairing the UAE’s renewable arm, known as Masdar. He also happens to be the chief executive of Adnoc.

In the lead-up to COP, Al Jaber has argued that oil and gas companies have a “central” role to play in solving the planet’s challenges, given their expertise and scale. A group of more than 100 U.S. and European lawmakers wrote in a joint letter that his appointment risks “undermining negotiations,” and that polluters have a “vested financial interest in maintaining the status quo.”

Al Jaber portrays the UAE as a best-in-its-region transformer with plans for solar expansion, green hydrogen production, and by 2050, the status of carbon neutrality. Supporters of the country’s policies say it is influencing the world’s transition well beyond its role as COP host, investing in renewable projects elsewhere, and putting pressure on regional neighbors that have been slower to invest in renewables.

“We are not shying away from the energy transition,” Al Jaber said. “In fact, we are running towards it.”

Though the United Arab Emirates economy is no longer predominantly oil-dependent – fossil fuels account for about 30 percent of the gross domestic product – Al Jaber’s oil company plays an outsize role. Adnoc’s oil helps make the UAE the world’s seventh-largest producer, responsible for about four percent of the global supply. Adnoc sponsors green events, sends its employees into the top ranks of the UAE government, and has helped launch a university program aimed at the clean energy transition. Its falcon logo perches atop several of the high rises in central Abu Dhabi.

Because the company is so enmeshed with the country, and because of government restrictions on free speech, Adnoc – and its expansion plans – faces little domestic scrutiny. Even those speaking on background allow that the company makes a compelling case that so long as the world needs oil, it might as well be Adnoc’s.

The company has some of the most carbon efficient oil in the world. That is partly the fortune of geography: Its oil fields are relatively close to shore, under low-lying waters, relatively easy to access. The company also credits years of investments in efficiency measures, and is carrying out major infrastructure work, laying hundreds of miles of underwater cables that will connect solar power and nuclear energy to its offshore sites, including the artificial islands.

In short, Adnoc will soon be drilling for oil with the help of renewable power. It also pledges to eliminate methane emissions by 2030.

Initiatives to reduce emissions are almost a “license to operate,” said Al Kaabi, the Adnoc official.

Adnoc has plenty of company in ramping up its oil production. Many of the biggest fossil fuel producers – both state- and publicly owned – are rushing to use recent record profits and tap resources before the market might wane as renewables surge. Oliver Connor, an energy analyst who tracks the fossil fuel industry for Citi, said that none of the big players want to leave potential wealth “in the ground.” Adnoc last year decided to increase its production capacity target by 2027 to 5 million barrels per day, up from roughly 4.65 million now.

Adnoc makes the case that oil should play a bridge role as renewables come online, and across the UAE, energy industry watchers deride the notion of a rapid fossil fuel phase-down as naive, even dangerous. They say the aftermath of Russia’s invasion offered a preview of the price shocks and panic that would unfold with widespread energy shortages.

But this oil push goes against what leading climate scientists say must happen – a rapid reduction in emissions of carbon and other greenhouse gases to forestall the worst expected impacts of global warming. While Adnoc emphasizes the promise of carbon capture technology – and is investing heavily in expanding its capacity – right now the company has a capture capacity, in the form of a project at a steel plant, equivalent to a sliver of its emissions.

Other companies have faced growing pains in ramping up such technology, and even in the best-case scenario Adnoc won’t be capturing emissions on a larger scale until the latter part of the decade. In the meantime, research suggests that the world has somewhere between six to nine years left at current emissions levels before emitting enough carbon dioxide to eclipse the 1.5 degree Celsius mark, a target written into the Paris agreement.

The UAE’s policies, and specifically Adnoc’s oil plans, are “not 1.5-degree compatible,” said Mia Moisio, an analyst at the New Climate Institute who follows national-level climate policies.

In that sense, Adnoc hardly stands out among oil companies.

But Adnoc is the only one whose CEO, in his capacity as COP president, has called the 1.5 Celsius target a “north star,” and a goal that needs to stay “within reach.”

The UAE is a nation of showpieces, including the world’s tallest skyscraper in Dubai. But when it comes to understanding how fully the country can live up to its green aspirations – and how to separate hype from reality – one site is particularly instructive. It is a 2.5 square mile patch of land near the Abu Dhabi airport, a city dreamed up in 2006 as the symbolic start of a diversification from oil. The mission was backed by the crown prince and spearheaded by Al Jaber, who said, “there is nothing like this in the world.” The goal was the world’s first town with zero carbon and zero waste.

“It was bold and visionary,” said Steve Geiger, one of the first employees behind the project, who now runs an energy transition advisory and investment group. “We were making some very big claims.”

“Amazing, isn’t it?” said then-President George W. Bush, seeing the renderings of the city, saying the UAE was on the “leading edge of technological change.”

Seventeen years later, Masdar City, as the site is known, has not fully achieved its goals. It was supposed to be finished in 2016; instead it has a core of completed residential and office buildings, with a Thai restaurant, an artisanal coffee shop, and a mall, surrounded by cranes and heavy equipment. The town was supposed to be a home and workspace for 90,000 people; instead, the number stands at 15,000, two-thirds who commute in for work in gas-guzzling cars. The hope had been to have a virtuous cycle of reuse; but engineers realized that even desalinating water would require a level of clean energy beyond reach, short of blanketing Abu Dhabi in solar panels.

Even now, among dozens of buildings, only three – being built or nearly finished – are slated to be carbon neutral, producing at least as much power as they consume. The other buildings, even those with solar panels, need to draw energy from the country’s broader grid.

“The original concept, we quickly realized it was unfeasible,” said Chris Wan, the city’s associate director of sustainability.

The benefits that Masdar City has yielded are more nuanced – including lessons about smart architecture in a hot climate. On a morning-long tour through the city, Wan and his colleague Steve Severance showed off details that help lower consumption. Sunhat-like roofs, tucked down on the east and west, that allow sunlight – just not directly. Gorgeous, curling staircases, centrally placed to entice walking instead of elevator use. Intentionally constructed wind tunnels that help make Masdar City feel 10 degrees cooler than downtown Abu Dhabi.

“It’s 92 degrees right now,” Severance said. “We’ve been standing outside for hours. And Chris is wearing a jacket.”

Toward the end of the tour, Severance reflected on the winding path that Masdar City has taken – one slowed by pragmatic concessions and technologies that fizzled, but also boosted at times by ideas that emerged only later, never considered in initial blueprints. The UAE’s path to net zero, he said, might unfold the same way.

He told a story about Masdar City’s cars.

Initially, the city had intended to use podlike autonomous vehicles, moving along fixed tracks, to help people get around. Architects made the aesthetic choice to raise the city on a platform, allowing the pods to operate one level below in the shade – a fortuitous choice, because their batteries would have struggled in the UAE’s heat.

“This is pre-iPhone technology,” Severance said of the eggshell-like vehicles.

Naturally, they didn’t catch on as planned, though the city still has nine of them. EV technology took off. The platform idea was abandoned midstream, with construction returning to ground level. And now the city makes use of all sorts of clean transport methods, including golf carts.

When Severance and Wan said goodbye, they zipped back to work on electric scooters.

By 2050, the UAE says it will achieve nationwide a status that for now applies to those three buildings in Masdar City: carbon neutrality. No other Gulf state has a more ambitious net zero target, and to get there the country would have to make wholesale changes, cleaning up its industry, boosting the energy efficiency of its glass skyscrapers, creating more electric-only transportation, capturing carbon from the atmosphere, and building solar capacity at an astonishing scale.

“No doubt there will be some radical breakthroughs,” said Robin Mills, an energy consultant who lives in Dubai. “A lot will change in the next 27 years.”

But one thing that wouldn’t have to happen is a break from oil.

That’s because, in the global system of tracking climate impacts that predates the major climate conferences, countries that extract fossil fuels are held to account only for the emissions that come from inside their own borders – not from the actual end-use of the oil, so long as it is exported. Those emissions, coming from use in cars or homes or in the power grid, are dramatically higher than those stemming from drilling and processing. Even a company like Adnoc can work toward to its own net-zero target, while it effectively acts as an emissions export company.

According to the Climate Action Tracker, an independent research group, Adnoc, between 2016 and 2020, exported an annual average of 570 million tons of carbon dioxide emissions to other countries – more than 1 percent of the global total, and more than twice the emissions emitted nationally by the UAE.

Climate experts say this feature of emissions accounting isn’t a loophole: Consumers that are using and creating a demand for fossil fuels should be on the hook, too. But it also means that the biggest fossil fuel countries and the biggest producers can all look like they’re on the path to net zero – while simultaneously ensuring emissions go elsewhere.

“It does start at home. But we do need to look at the global consumption picture,” Connor, of Citi, said.

The only way to actually eliminate emissions by 2050 is if the oil market shrinks significantly, and an ever-declining group of companies try to meet the waning demand.

But who decides which companies can vie to be among the last suppliers? What if everyone doesn’t agree? And beyond that, given the competing projections about oil demand in the next decades, what if demand doesn’t shrink?

“It’s a natural risk and it’s hard to sort,” said Steve Griffiths, a senior vice president at Khalifa University in Abu Dhabi.

In the interview at Adnoc’s headquarters, Al Kaabi made the case for his company as one of those last suppliers, whenever the moment might come.

He said Adnoc was embracing “all necessary practices” to “maintain our competitive advantage,” and that its oil had the second-lowest carbon intensity of any producer, only a fraction behind Norway’s Equinor. He said the world’s oil, down to the last “molecule” ever used, should come from the cleanest sources.

Meaning Adnoc?

“Or Equinor,” he said with a slight smile.