Saudi Aramco’s Path towards Sustainability
“How does a country negotiate its own perceived demise?” This question posed by journalist Antonia Juhasz in a 2015 Newsweek report relating to the UN’s 21st Conference of Parties is one worth considering when thinking about Saudi Arabia’s role leading up to the climate change discussions.
Until recent years, leaders of oil-dependent economies have focused on reaping the economic and social benefits of their limited natural resources to drive growth and prosperity. Like a double edged sword, the path towards development has also paved the way towards long-term impacts on energy sustainability and the environment. For many countries and companies, finding the balance between long-term growth and sustainability has proved difficult.
Threats and Opportunities in Combating Climate Change
Deploying renewable power and targeting energy efficiency strongly depends on oil revenues. Saudi Arabia controls 16% of the world’s proven oil reserves with the oil sector accounting for roughly 80% of budget revenues, 45% of GDP, and 90% of export earnings.
The country embarked on a National Transformation Program (‘NTP’) aimed at preserving natural resources and diversifying the economy by channeling oil earnings into lower emission sectors ranging from financial services and tourism to renewable energy and efficiency technology to enhance growth. Plans to diversify the energy mix would lead to co-benefits in pursuing economic diversification from oil, while contributing to greenhouse emission (‘GHG’) mitigation and adaptation to climate change. Today, the key issue for Saudi Arabia and its national oil company Aramco is around accountability and commitments to limit warming below 1.5°C .
Mitigation and Adaptation Measures
During the Oil & Gas Climate Initiative, ten member companies including Aramco, BP and Shell agreed to increase their investment to combat climate change. The program committed to significant investments in natural gas, carbon capture and storage (‘CCS’), renewable energy, as well as low-GHG research and development.
- Gas flaring – total flared gas is industry-leading at less than 1%.
- Zero discharge technology – in 2014 recovered 415,000 barrels of oil by deploying technology at well sites to enhance recovery
- Fuel efficiency – a range of advanced R&D projects including the development engine efficiency to increase the mileage efficiency of vehicles and reduce pollutant emissions of future engines
- CCS –launched its first CO2 Enhanced Oil Recovery pilot in 2015. Also invested in technology start-ups, including Novomer, which develops catalysts capable of efficiently and profitably converting CO2 into valuable products.
- Renewables –targeted renewable capacity of 54GW and 17 GW of nuclear energy by 2032.
Delivering on the Promise
Climate Change Tracker reported that Saudi Arabia failed to honor its commitment to holding warming below 1.5°C. According to the report, “if most countries followed this approach, global warming would exceed 3–4°C. To contribute with a minimum effort, Saudi Arabia would need to at least triple its proposed abatement and overall ambition” . Planned policies aimed at diversifying the energy mix, have recently been downscaled following an initial delay of eight years. In the NTP the renewable power plans are lowered to 9.5 GW in 2023 and nuclear power is no longer mentioned.
Additional Mitigation Measures
Aramco should use the Energy Management Program to implement measures that will support mitigation actions and promote energy efficiency on a national level. Focus should be on the industry, building and transportation sectors that collectively account for over 90% of local the energy demand. Support initiatives should be set with the increase of efficiency standards within these sectors. It should improve the efficiency of facilities, by replacing lower efficiency power plants with higher technology and efficiency plants thus helping drive significant fuel savings in the utility sector.
Finally, Saudi Arabia and Aramco should re-shift their focus to invest in necessary infrastructure and implement ambitious programs for the increased contribution of renewable energy to the mix.
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 National Transformation Program 2020, report, January 2016.
 The Intended Nationally Determined Contribution of the Kingdom of Saudi Arabia under the UNFCCC, report, UNFCCC.
 IPCC Secretariat. Forty Forth session of the IPCC. Technical paper. Intergovernmental Panel on Climate Change. IPCC-XLIV/L-2 (20.10.2016).
 “Saudi Aramco Makes Joint Collaborative Declaration on Climate Change with Oil and Gas Industry CEOs.” Saudi Aramco. October 16, 2015. http://www.saudiaramco.com/en/home/news-media/news/COP21.html, accessed November 02, 2016.
 “Saudi Aramco Energy Ventures LLC Announces an Equity Investment into Novomer Inc.” Transforming Pollution into Sustainable Polymers & Chemicals. December 10, 2013. http://tinyurl.com/ztctnft, accessed November 03, 2016.
 Saudi Arabia’s Renewable Energy Strategy and Solar Energy Deployment Roadmap. Report. King Abdulaziz Center for Atomic and Renewable Energy. 23
 Tracker, Climate Action. “Saudi Arabia.” – Climate Action Tracker. November 02, 2016. http://climateactiontracker.org/countries/saudiarabia.html , accessed November 03, 2016.
 World Energy Outlook. Report. International Energy Agency. 2015 ed.