So what to make of the statement by Saudi Arabia’s oil minister that the world’s biggest oil exporter could stop using fossil fuels as soon as 2040 and become a “global power” in solar and wind energy?
Ali Al-Naimi’s statement is striking as Saudi Arabia’s wealth and influence is entirely founded on its huge oil wealth and the nation has been one of the strongest voices against climate change action at UN summits.
“In Saudi Arabia, we recognise that eventually, one of these days, we’re not going to need fossil fuels,” said Naimi at a business and climate conference in Paris on Thursday. “I don’t know when - 2040, 2050 or thereafter. So we have embarked on a program to develop solar energy,” he said in comments reported by the Guardian, Bloomberg and the Financial Times. “Hopefully, one of these days, instead of exporting fossil fuels, we will be exporting gigawatts of electric power.”
Naimi also said he did not think that continuing low crude oil prices would make solar power uneconomic: “I believe solar will be even more economic than fossil fuels.”
Paris is the venue for a crunch UN climate change summit in December and Thursday’s conference was part of the French government’s preparations. The Saudi signal provides a ray of sunlight for those hoping for a strong deal to tackle global warming.
“Saudi Arabia is sending a strong signal to all oil producers and companies they must plan for an energy transition,” said Mark Fulton, former head of climate research at Deutsche Bank and advisor to the Carbon Tracker Initiative (CTI).
“If Saudi Arabia is starting to hedge its bets by developing solar capacity, this could change the fundamentals of the oil market,” said James Leaton, CTI head of research.
But Naimi also said that the idea of keeping most fossil fuels in the ground, as scientists say is necessary to tame climate change, “may be a great objective but it is going to take a long time” and needed to be put “in the back of our heads for a while”. He said fossil fuels will still dominate the world’s energy supply up to 2050.
Saudi Arabia had already said in 2012 it aimed to be powered by 100% renewable energy and later that year announced a $109bn solar plan. In January, that plan was delayed by eight years.
So Ali Al-Naimi’s comments on Thursday need to be treated with a degree of scepticism. Furthermore, making the kingdom itself fossil-fuel free doesn’t rule out continuing to export oil for many years. And in the past, Saudi Arabia has suggested it should be compensated for keeping any of its oil in the ground.
But the fact that the Saudi’s feel the pressure to make such statements at all feels politically significant in the year that the world has set itself the task of sealing a climate change deal.
It also adds to the momentum being delivered by the fast-growing, UN-backed, divestment campaign which argues investors should sell their stocks in fossil fuel companies whose hunger for ever more coal, oil and gas are seen as endangering the climate.
Axa, one of the world’s biggest asset managers, announced on Friday that it was selling €500m of coal company stocks, by far the biggest divestment so far. Maybe, just maybe, the dark clouds that have glowered over efforts to tackle global warming for years are starting to disperse and let the sunlight in.
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