By Yee Kai Pin
BALI, Indonesia: With the UN climate-change debate entering its second week and the search for a successor to the Kyoto Protocol seemingly elusive, temperatures are rising and fingers being pointed at culprits of global warming.
While China and India are having to defend their records on carbon emissions - even though per-capita emissions in either country remain well below averages in the industrialised West - one key region, the Middle East, appears to have gone missing on the blame radar.
It’s not that the Middle East produces the bulk of the oil being burnt globally. But oil demand there is growing at a faster clip than nearly every other region, while fuel efficiency in such cities as Tehran - where gasoline costs just 38 cents a gallon at the pump - simply hasn’t caught on.
To be fair, Middle East governments are showing they’re aware of the issues. A rare meeting last month of heads of states from the Organisation of Petroleum Exporting Countries ended with $750mn in “petrodollar” pledges from four members toward research into climate change and the environment.
Six Middle East oil producers belong to Opec, a 13-member group that pumps nearly 40% of the world’s crude oil.
“I think they’re cognizant of the (climate change) issues, they know this is not an issue they can avoid,” Victor Shum, Singapore-based Senior Principal at US energy consultancy Purvin & Gertz, Inc, said.
“(But) it’s going to be a long road” to achieving fuel efficiency, he said, noting that the mid-November meeting in Riyadh was only the first time Opec publicly discussed climate change.
Meantime, while record-high oil prices have turned global attention to Middle East supply, the region is quietly rising up the ranks among leading consumers.
Middle East oil demand will climb 4.5% next year to 6.9mn barrels a day, or nearly 8% of the global total, according to the International Energy Agency in Paris.
The percentage change would be second only to Asia Pacific and India - a region with a population about 20 times larger.
However, there’s been little pressure on the Middle East to tackle fuel efficiency head-on, unlike in heavily oil import-dependent countries such as Japan, where supply comes at a premium.
Asia’s top oil consumer China, which is sparing little expense to ensure a secure flow of imported oil, has had to endure fuel shortages as distributors in the country’s south, unable to pass on higher international costs to motorists, routinely hold back supplies.
Even Indonesia, East Asia’s only Opec member, is looking into ways to cushion the impact of record-high oil prices; it’s been a net oil importer since 2003.
Last month, Minister of Mines and Energy Purnomo Yusgiantoro estimated the cost of fuel subsidies could jump to IDR90tn ($9.8bn) this year, well above the IDR55tn target in the government’s 2007 budget.
In most parts of the Middle East, such pressures don’t exist.
All six GCC members - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - are oil exporters.
Anecdotes of wastage, from leaking gasoline at pumping stations to empty offices and homes being kept lit and air-conditioned, are well documented.
With Saudi Arabia producing crude at $4-$5 a barrel from “legacy” fields (more from newer projects due to the higher infrastructure costs), Middle East consumers are seemingly taking cheap oil as a birthright, critics say.
Still, a little-publicised fact is that Iran, despite raking in record revenues in recent years from crude exports - dollar-denominated or otherwise - imports more than half of the gasoline it consumes, according to government data.
While this is partly due to a shortage of oil refining capacity, Tehran is also under pressure to keep tabs on runaway inflation, amid rising social discontent among the country’s youth.
Like in Indonesia, Iran’s subsidies on domestic gasoline sales are expected to balloon with higher international prices.
The country is already spending nearly $10bn a year to import fuel to be sold below cost in the domestic market.
In Bali, a case needs to be made for energy and climate to be interlinked, and for climate issues to be tackled by energy players, say delegates and industryanalysts.
The IEA, the energy security watchdog of the Organisation for Economic Co-operation and Development, will be led by executive director Nobuo Tanaka.
He’ll focus on energy efficiency and technology at a briefing yesterday, a spokeswoman said.
Middle East countries are also being represented at the UN Climate Change Conference that runs until Friday, but only mostly through their environment ministries.
From the GCC, top environment officials from just Oman, Qatar and the UAE are speaking, alongside a deputy head from nonmember state Iran.
Saudi Arabia’s Minister of Petroleum Ali Naimi is registered as the head of the kingdom’s delegation. But Saudi sources say he won’t be picking up the gauntlet – or the microphone – on climate issues.
Naimi was due to fly in to the Indonesia resort island yesterday, after the arrival of Opec’s Secretary General Abdalla Salem El-Badri, Opec sources say.
Nor will the host country’s energy minister Purnomo take the podium, although he’ll accompany President Susilo Bambang Yudhoyono to a signing ceremony on Tuesday for geothermal projects.
“Bali is not the energy ministry’s responsibility,” said a senior Indonesian Opec official in Jakarta. – Dow Jones Newswires. |
