Shifting Geo-Politics not Good for the Climate

Change may only happen in small steps, but slowly and surely the geo-politics of oil are changing.

The dynamics of Middle Eastern oil are in transition. Anyone who argued that the war in the Gulf was a war about oil should sit up and take notice.  And anyone concerned about the climate should also be worried.

America may be diversifying its oil sources, but perversely this is bad news for the climate.

Maybe the geo-political change can be symbolised in the stories of two meetings in Jeddah, the Saudi capital.

Eighteen months ago there was an emergency summit of oil producers and consumers in Jeddah. Oil prices were at or near record levels.  The Bush Administration’s Energy Secretary, Samuel Bodman, told the Saudis to pump more Middle Eastern oil.

Eighteen months later, the oil price has halved. And as Bodman’s successor, Steven Chu, flies in for a four day visit, his agenda is not about pumping more oil but about research and renewable technologies.

Chu will visit Saudi Arabia’s oil minister and other oil ministers of the Organization of the Petroleum Exporting Countries to discuss “a range of energy issues, including energy security and the importance of investing in a broad portfolio of energy technologies,” the US Department of Energy has said.

Chu is not demanding more oil from the Saudis because the demand for oil from the US is falling, whereas it is growing from China.

Today’s FT points out that last year Saudi Arabia’s oil exports to the US sank below 1 million barrels a day for the first time in two decades. At the same time China’s consumption climbed above that level.

But here comes the rub. The drop in US demand for oil from the kingdom is the result of declining energy consumption due to the recession and also recent energy efficiency drives, but also the US’s greater reliance on imports from the dirty tar sands in Canada as well as Africa.

Any reduction in oil demand due to efficiency has to be welcomed.

But Canada has duly overtaken Saudi Arabia as the top supplier for the US following large investment in its tar sands region. The US is also buying more oil from Angola, Nigeria and Brazil.

Getting your oil from Canada rather than Saudi Arabia may make sense on many different levels. But it may not make sense from a climatic perspective.

As Oil Change International and other environmental NGOs pointed out in a briefing paper a year ago, “Not every barrel of oil has the same carbon footprint. When a barrel of oil is produced, the amount of carbon emitted during its production varies significantly.”

The briefing paper included a table from the US Department of Energy that examined the different greenhouse gas emissions from oil depending from where it was drilled.

This table shows that Saudi Arabia’s oil has the lowest greenhouse gas emissions.  Whereas the two worst places are Canada and Nigeria. Angola is not much better.

Nigeria oil is the worst because so much gas is flared in the process. Oil from there emits nearly ten times more greenhouse gas emissions than that from Saudi Arabia.

So the geo-political axis may be changing. America may be reducing its reliance on Middle Eastern oil. That may bring many different benefits.

But it also brings big problems for the climate.