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Saudi Arabian Energy Minister Prince Abdulaziz bin Salman, a realist. Photographer: Donat Sorokin/TASS/Getty Images |
Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, is a realist. This week, he compared the International Energy Agency’s recent net-zero emissions analysis to “La La Land.” Because a world in which the half-brother of an autocratic prince attempts to manipulate the price of a vital commodity in league with a clutch of other autocracies and struggling petrostates, even as that commodity stokes a climate disaster ... yes, that sounds totally normal and good.
The IEA’s “roadmap” is la-la land in the sense that it requires a “total transformation” of global energy. That is difficult precisely because, with the externalities of emissions largely unpriced, we rely heavily on an incumbent system predicated on “cheap” fossil fuels. But what then? The status quo means doubling down on climate change. That doesn’t sound particularly realistic; like “La La Land” except set in a noirish Los Angeles clouded by wildfire smoke.
Oil is incredibly useful, which is why it is deeply embedded in the modern economy and why its geopolitical compromises are tolerated. But now we know it also harbors dangerous externalities. To simply focus on the benefits and ignore the risks — especially for the emerging markets demanding more barrels — is irresponsible and ultimately self-defeating.
The IEA’s biggest bombshell was the contention that reaching net-zero emissions by 2050 meant no more investment in new fossil-fuel supply. That was never going to persuade the prince to treat it like a documentary. Remember, though, the IEA isn’t issuing orders; just making its best guess at what is needed to meet a modeled outcome.
And if you don’t like that model, there are others. Rystad Energy, a consultancy, released some net-zeroish 1 projections recently. These share many similarities with the IEA’s but differ in important respects, not least oil demand.
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