Governments Plan Massive Expansion of Fossil Fuel Production Despite Climate Crisis, UN Warns
As the world teeters on the brink of climate catastrophe, major fossil fuel-producing nations plan to expand production.

Amidst a global chorus calling for urgent action on climate change, major fossil fuel producers are doubling down on their plans to expand production, defying climate science and “throwing humanity’s future into question”, a UN report revealed on Wednesday.

The report, compiled by the United Nations Environment Programme (UNEP) in collaboration with academic partners, scrutinized the plans of the 20 largest fossil fuel-producing countries, responsible for a staggering 84% of global carbon emissions and roughly three-quarters of the world’s fossil fuel consumption in 2021. 

The findings paint a grim picture: governments’ plans show they intend to produce, in total, 110% more fossil fuels in 2030 than are compatible with the 1.5°C limit set out in the Paris Agreement, and 69% more than is consistent with 2°C of warming.

The analysis found national fossil fuel plans would result in 460% more coal, 83% more gas, and 29% more oil production in 2030 than the world can afford to burn on its increasingly miniscule 1.5 C carbon budget.

The findings underscore the persistent gap between national climate pledges and fossil fuel production, a worrisome trend that has remained largely unchanged since the UN first quantified it in 2019.

“The addiction to fossil fuels remains deeply entrenched in many nations,” said Inger Andersen, Executive Director of UNEP. “Governments must stop saying one thing and doing another … [these] plans to expand fossil fuel production are undermining the energy transition needed to achieve net-zero emissions, throwing humanity’s future into question.” 

“The fossil fuel production gap, the difference between governments’ plans and projections and levels consistent with limiting warming to 1.5°C and 2°C, remains large and expands over time,” the report found.

None of the top 20 fossil fuel-producing countries have committed to aligning their output of oil, coal and gas to limit warming to 1.5°C, despite 17 committing to net-zero emissions pledges, the report found. All continue to subsidise, support and plan expanded fossil fuel production. 

The combined levels of coal, oil, and gas production planned by 10 high-income countries alone would already exceed 1.5°C-consistent pathways for each fuel by 2040, the report found.

The lack of progress by major polluters in realigning their production of fossil fuels with global climate targets comes against a backdrop of new records for global greenhouse gas emissions, sea levels, and fossil fuel subsidies set in 2022. In 2023, one-third of days have seen average global temperatures exceeding 1.5°C over pre-industrial levels.

“The whole world is clinging to the handrails on a boat that is lurching through increasingly turbulent seas,” said Andersen. “Nations must unite behind a managed and equitable phase-out of coal, oil and gas — to ease the turbulence ahead and benefit every person on this planet.”

UN Secretary-General Antonio Guterres, a vocal critic of fossil fuel interests, expressed dismay at the report’s findings. “Governments are literally doubling down on fossil fuel production,” he said, emphasizing the need for credible commitments to ramp up renewables, phase out fossil fuels, and boost energy efficiency while ensuring a just, equitable transition.

India, Saudi Arabia, and Russia lead fossil fuel expansion surge

Government plans and projections would lead to an increase in global coal production until 2030, and in global oil and gas production until at least 2050, the end of the time frame covered by the report. These findings contrast with those of the IEA, which forecast a peak in demand for all three fossil fuels by 2030.

India, Saudi Arabia, and Russia are spearheading the global surge in fossil fuel production, with their expansion plans accounting for the largest share of carbon emissions for coal, oil and gas, respectively, according to the report. 

India’s coal production plans dwarf any other nation, with its Ministry of Coal projecting domestic coal production to more than double to 1.5 billion tonnes by 2030. In March 2022, the Indian government set a goal of increasing production by state-owned Coal India Limited (CIL) alone to one billion tonnes by 2024.

Saudi Arabia, which relies on oil and gas production for half of its GDP, is planning the largest single-country increase in oil extraction. Documents from state-owned Saudi Aramco, which controls nearly a fifth of global oil output, suggest a 47% increase in production by 2050. Aramco also plans to ramp up natural gas production to meet future demand.

Russia, the world’s largest gas exporter, also has ambitious expansion plans. The most recent government figures project coal production increases of between 11% and 53%, and between 6% and 31% for gas by 2035. 

Russia’s energy exports have become a lifeline for the country’s foreign reserves and economy, which have been severely strained by international sanctions and wartime expenditure stemming from its invasion of Ukraine in February 2022.

The United States, Canada, Australia, Norway, and the United Kingdom also play a significant role in fossil fuel expansion plans. According to a recent analysis by Oil Change International, these five countries account for 51% of planned new oil and gas extraction by 2050. 

The United Arab Emirates, hosts of the upcoming UN climate summit starting on November 30, plans to boost its oil production by one million barrels per day by 2027 and increase its natural gas production by 259% by 2028 as part of a $150 billion investment plan in its national oil company, ADNOC. Sultan al Jaber, president of the UN climate summit, serves as the president of ADNOC.

“Governments offer a variety of rationales for increasing production: reducing import dependency, generating government revenue … and winning out as one of the last producers in a shrinking market,” Michael Lazarus, a lead author of the report, said at a closed-door media briefing on Monday.

“But when you take all these reasons together, that’s what leads to the production gap itself – the desire for each country to maximize their own production,” Lazarus added.

Money, money, money

The top 10 countries in extraction-based greenhouse gas emissions account for 75% of the global total, while the top 35 countries account for 96% (data represents 2021 levels).

The report’s findings underscore the crux of the fossil fuel crisis: governments and private companies continue to reap massive profits from fossil fuel production, creating a disincentive for any party to exit the lucrative market. 

Amidst an energy crisis triggered by Russia’s invasion of Ukraine, which caused oil and gas prices to skyrocket, major oil companies more than doubled their annual profits to a record $219 billion in 2022. Buoyed by record profits, major petroleum companies have quietly retreated from their already modest climate commitments.

In October, American fossil fuel giants ExxonMobil and Chevron reaffirmed their expansion plans, both announcing acquisitions of smaller shale producers in the United States for a combined total of over $100 billion. The United States is the largest producer of oil and gas in the world. 

In India, low monsoon rainfall over the summer months led to a surge in electricity consumption. Adani, the country’s second-largest power producer, responded by amplifying coal generation, from which it raked in $792 million, compared to $84 million the year prior, Semafor reported this week.

The Organization of the Petroleum Exporting Countries (OPEC), the global oil cartel that supplies 51% of the world’s oil and controls 81% of proven oil reserves, forecast in its annual report released last month that it expects oil demand to increase by 17% by 2045.

In the foreword of the report, OPEC Secretary General and Kuwaiti oil executive Haitham Al Ghais cautioned against calls to halt investments in new oil projects, asserting that such measures could lead to “energy and economic chaos.”

Scientific consensus and expert bodies agree that new oil and gas field development is incompatible with all pathways for limiting global warming to 1.5 degrees Celsius.

“This is the heart of the problem,” said Ploy Achakulwisut, a lead author of the report. “Major producers are not willing to transition from fossil fuel production.” 

Expanding fossil fuels: Economic ‘insanity’ 

Despite plans by leading fossil fuel producers to expand output, the IEA projects fossil fuel demand will peak by 2030 due to the accelerating economic momentum of renewables.

The International Energy Agency’s (IEA) latest annual report, released in October, projects a significant shift towards renewable energy sources in the coming decade. By 2030, renewables, including solar, wind, and hydropower, are expected to account for nearly half of the global electricity mix, up from around 30% today.

IEA Executive Director Fatih Birol emphasized the irreversible nature of this transition, declaring it “unstoppable.”

“It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us,” said Birol. “Taking into account the ongoing strains and volatility in traditional energy markets today claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever.”

This rapid transition towards clean energy renders planned expansions in fossil fuel production economically questionable, according to experts.

“Government production plans and targets, help to influence legitimise and justify continued fossil fuel dependence,” said Achakulwisut. “At the same time, many of these investments and infrastructure are at risk of becoming stranded assets as the world decarbonises.” 

Despite the growing adoption of green technologies, the allure of fossil fuel profits continues to hold sway, preventing countries from decisively stepping away from these energy sources. This reluctance stems, in part, from fears of losing out on market share in a shrinking market. 

“Despite their climate promises, governments plan on ploughing yet more money into a dirty, dying industry, while opportunities abound in a flourishing clean energy sector,” said Neil Grant, an environment analyst at Climate Analytics and a co-author of the report. “On top of economic insanity, it is a climate disaster of our own making.”

Major fossil fuel producers resist loss and damage fund

The US, the largest producer of oil and gas in the world, threatened earlier this week to exit loss and damage fund negotiations altogether.

As the largest fossil fuel-producing nations refuse to halt their expansion of coal, oil, and gas production, they are also resisting calls to compensate vulnerable countries for the climate-related damages they are causing and help them prepare for the escalating dangers of a warming climate.

Tensions are escalating ahead of the crucial UN climate summit, COP28, over the establishment of a loss and damage fund, a cornerstone of the global climate response and the crowning achievement of last year’s UN climate summit in Egypt.

The fund, aimed at compensating developing nations for the impacts of climate change, was nearly derailed at a recent preparatory meeting in Abu Dhabi due to financing disagreements led by the United States, which signalled that it is unwilling to provide any funding beyond voluntary contributions.

Developing countries, bearing the brunt of climate change impacts, have staunchly opposed the US proposal to house the fund at the World Bank, citing the institution’s outdated structure and excessive US influence.

China is also playing a pivotal in discussions surrounding the fund, urging the United States to make substantial contributions while remaining careful to sidestep any financial obligations of its own.

Outi Honkatukia, co-chair of the Abu Dhabi negotiations, called reaching an agreement on the fund “mission impossible”. A shaky agreement was reached, but it fell short of consensus, leaving the fund’s future uncertain. For now, the fund will be housed at the World Bank, a key U.S. demand, but developing countries hope this is a temporary step toward an independent fund. The battle will continue at COP 28 in Dubai.

“The US’s inability to agree on even a watered-down text highlights their lack of commitment to establishing an effective fund,” Lien Vandamme, a senior campaigner at the Center for International Environmental Law, told Politico.

The fate of the loss and damage fund hangs in the balance, casting a shadow over the upcoming COP28 climate summit. Its failure to materialize could jeopardize the overall progress of climate negotiations.

Image Credits: UNEP, UNEP .

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