The End of the Cartel: The UAE, Oil, and the Climate Future

"We want to monetize our reserves before the energy transition makes them worthless." Which is completely rational from their point of view, and slightly terrifying from a climate point of view.

Claro, pero lo más sorprendente es esto: los Emiratos también son líderes en energía solar.

Of course, but the most surprising thing is this: the UAE is also a leader in solar energy.

Tienen uno de los proyectos de energía solar más grandes del mundo, el proyecto Al Dhafra.

They have one of the largest solar energy projects in the world, the Al Dhafra project.

Y organizaron la conferencia del clima COP28 en Dubái en 2023.

And they hosted the climate conference COP28 in Dubai in 2023.

Which, for the record, was deeply controversial.

You had a country that produces roughly three million barrels of oil a day hosting a global climate summit.

The head of their national oil company was the president of the conference.

A lot of climate scientists were not happy.

Comprendo la crítica, pero también hay que reconocer algo: la COP28 fue la primera conferencia del clima donde los países acordaron hablar del "fin del petróleo".

I understand the criticism, but you also have to acknowledge something: COP28 was the first climate conference where countries agreed to talk about the 'end of oil.' Before, that was impossible.

Antes era imposible.

Oil-producing countries blocked these conversations.

Los países productores de petróleo bloqueaban estas conversaciones.

That's a fair point.

The language was watered down, but it was there.

A phase-down of fossil fuels made it into the final text.

Some people said it was the beginning of the end, others said it was a smokescreen.

I'm genuinely not sure which camp was right.

Y ahora los Emiratos salen de la OPEP.

And now the UAE leaves OPEC.

Para mí, esto muestra que los países productores de petróleo no tienen la misma dirección.

For me, this shows that the oil-producing countries don't have the same direction.

Cada país tiene su propio plan.

Each country has its own plan.

Arabia Saudita quiere controlar los precios.

Saudi Arabia wants to control prices.

Los Emiratos quieren producir más y también invertir en el futuro.

The UAE wants to produce more and also invest in the future.

And that fracture matters enormously for climate.

OPEC's whole power came from collective action.

When members start breaking ranks, the group's ability to manage global oil supply falls apart.

That means more price volatility, potentially more production, and that's not good news for anyone trying to hit emissions targets.

Tienes razón.

You're right.

Pero también hay otra manera de ver esto.

But there's also another way to look at this.

Si la OPEP pierde su poder, los precios del petróleo pueden bajar.

If OPEC loses its power, oil prices can fall.

Y cuando el petróleo es barato, las empresas no invierten tanto en buscar petróleo nuevo.

And when oil is cheap, companies don't invest as much in finding new oil.

Entonces a largo plazo, puede ser bueno para el clima.

So in the long term, it might be good for the climate.

Cheap oil, though.

There's the problem.

Cheap oil is also what makes it harder for renewables to compete.

Every time oil prices crash, the economics of solar and wind get a little less favorable by comparison.

The climate movement has had a complicated relationship with oil prices for decades.

Es verdad.

That's true.

Mira, los años noventa son un buen ejemplo.

Look, the nineties are a good example.

El petróleo era muy barato.

Oil was very cheap.

Los gobiernos no invertían en energías renovables porque no era necesario.

Governments didn't invest in renewable energy because it wasn't necessary.

Entonces la crisis del clima continuó sin mucho progreso.

So the climate crisis continued without much progress.

And here we are.

Though the difference now is that solar and wind have gotten so cheap on their own terms that cheap oil matters less than it did.

The cost of a solar panel has dropped something like ninety percent since 2010.

That changes the equation.

Exacto.

Exactly.

Y aquí está el problema más grande para los Emiratos y para todos los países del Golfo: sus economías dependen casi completamente del petróleo.

And here is the biggest problem for the UAE and for all the Gulf countries: their economies depend almost completely on oil.

Arabia Saudita necesita un precio de ochenta o noventa dólares por barril para pagar sus programas sociales.

Saudi Arabia needs a price of eighty or ninety dollars per barrel to pay for its social programs.

Los Emiratos también.

The UAE too.

I spent time in Riyadh years ago covering the Arab Spring's spillover effects, and even then the Saudi government was acutely aware of this vulnerability.

They had this massive program called Vision 2030 to diversify the economy.

Tourism, technology, entertainment.

But oil still pays the bills.

Los Emiratos son diferentes de Arabia Saudita en esto.

The UAE is different from Saudi Arabia in this.

Dubái, por ejemplo, ya no depende principalmente del petróleo.

Dubai, for example, no longer depends primarily on oil.

La mayoría de su economía es turismo, finanzas y comercio.

Most of its economy is tourism, finance, and trade.

Abu Dabi todavía tiene mucho petróleo, pero la dirección del país es más diversificada.

Abu Dhabi still has a lot of oil, but the country's direction is more diversified.

Which is why they can afford to leave OPEC in a way that Saudi Arabia probably can't.

Riyadh is still the center of gravity of that organization.

Without Saudi Arabia, OPEC is just a club with no bouncer.

Buena descripción.

Good description.

Pero volvamos al clima.

But let's return to the climate.

Los científicos dicen que para limitar el calentamiento global a 1.5 grados, el mundo necesita dejar de usar combustibles fósiles antes de 2050.

Scientists say that to limit global warming to 1.5 degrees, the world needs to stop using fossil fuels before 2050.

Eso es en menos de veinticinco años.

That's in less than twenty-five years.

Twenty-five years.

Which sounds like a long time until you realize that the infrastructure we build today, the pipelines, the refineries, the power plants, they last fifty or sixty years.

Every new oil facility we build now is a bet that the world will still be burning oil in 2080.

Y los Emiratos anunciaron esta semana que quieren expandir su producción de petróleo.

And the UAE announced this week that they want to expand their oil production.

Quieren producir más de cinco millones de barriles al día.

They want to produce more than five million barrels a day.

Ahora mismo producen unos tres millones.

Right now they produce about three million.

Eso es un aumento muy grande.

That's a very large increase.

And that's the contradiction at the heart of this story.

A country that hosted the world's most important climate conference, that has one of the largest solar installations on the planet, is simultaneously planning to nearly double its oil output.

That's not hypocrisy exactly.

It's strategy.

But it's a strategy that doesn't fit with a 1.5-degree world.

Es una contradicción real, sí.

It's a real contradiction, yes.

Pero Fletcher, ¿quién va a comprar este petróleo?

But Fletcher, who's going to buy this oil?

Si los países ricos usan menos petróleo, ¿hay suficiente demanda?

If wealthy countries use less oil, is there enough demand?

La respuesta es sí, porque India y los países de África y Asia todavía necesitan mucha energía para desarrollarse.

The answer is yes, because India and the countries of Africa and Asia still need a lot of energy to develop.

And there's the deepest tension in all of climate politics.

A billion people in sub-Saharan Africa have unreliable or no electricity.

Telling them to skip fossil fuels and go straight to renewables is, in principle, the right answer.

But it requires enormous upfront investment that many of those governments simply don't have.

Correcto.

Correct.

Y los países ricos tienen una responsabilidad histórica aquí.

And wealthy countries have a historical responsibility here.

Europa y los Estados Unidos construyeron sus economías con carbón y petróleo durante doscientos años.

Europe and the United States built their economies with coal and oil for two hundred years.

Ahora dicen a los países pobres: 'No puedes hacer lo mismo.'

Now they tell poor countries: 'You can't do the same thing.'

That argument lands, and it lands hard.

I've heard it from energy ministers in Lagos and Jakarta and it's genuinely difficult to refute.

The historical carbon debt is real.

The question is whether acknowledging it gets us anywhere useful given the physics of what's actually happening to the atmosphere.

Exactamente.

Exactly.

Entonces, ¿qué significa la salida de los Emiratos de la OPEP para el futuro?

So what does the UAE's exit from OPEC mean for the future?

Para mí, muestra que el sistema viejo de controlar el petróleo está terminando.

For me, it shows that the old system of controlling oil is ending.

Pero el petróleo todavía no está terminando.

But oil itself is not yet ending.

Hay una diferencia importante entre las dos cosas.

There's an important difference between the two things.

That's a really clean way to put it.

The cartel is fracturing even as the commodity it controls remains central to the global economy.

Which means more chaos in markets, more price unpredictability, and probably more drilling, not less, as each country tries to maximize revenue before the window closes.

Sí.

Yes.

Y hay una cosa más que quiero mencionar.

And there's one more thing I want to mention.

Los Emiratos tienen una empresa de energía renovable que se llama Masdar.

The UAE has a renewable energy company called Masdar.

Es una de las empresas más grandes del mundo en energía limpia.

It's one of the largest companies in the world in clean energy.

Invierten en proyectos solares y eólicos en cuarenta países.

They invest in solar and wind projects in forty countries.

So they're running two tracks simultaneously.

Pump as much oil as possible right now, and build the clean energy infrastructure that will eventually replace it.

Whether that's visionary or cynical depends on which track you think is real and which one is window dressing.

Las dos cosas pueden ser verdad al mismo tiempo, ¿no?

Both things can be true at the same time, can't they?

Eso es la realidad del mundo hoy.

That's the reality of the world today.

El cambio climático es un problema serio, pero la transición es muy difícil y muy cara.

Climate change is a serious problem, but the transition is very difficult and very expensive.

Y los países que tienen petróleo no van a dejar de usarlo de un día para otro.

And countries that have oil aren't going to stop using it overnight.

That may be the most honest sentence anyone's said on this topic in a while.

All right.

One thing I noticed you used earlier, and I've been meaning to ask you about it.

You said los países van a dejar de usar petróleo.

That construction, dejar de, I use it, but I'm never quite sure I'm using it right.

Ah, sí, es una construcción muy útil.

Ah yes, it's a very useful construction.

'Dejar de' más un infinitivo significa 'to stop doing something.' Por ejemplo: 'Voy a dejar de fumar.' Significa 'I'm going to stop smoking.' Es para una acción que termina.

'Dejar de' plus an infinitive means 'to stop doing something.' For example: 'Voy a dejar de fumar.' It means 'I'm going to stop smoking.' It's for an action that ends.

So it's specifically stopping an ongoing activity.

Not just stopping in the sense of pausing, but leaving something behind for good.

Or at least with the intention to.

Exacto.

Exactly.

Y es diferente de 'parar.' 'Parar' es más físico, más inmediato.

And it's different from 'parar.' 'Parar' is more physical, more immediate.

'El coche paró.' El coche paró, se detuvo.

'El coche paró,' the car stopped.

Pero 'dejar de conducir' significa que una persona decide no conducir más, como una decisión de vida.

But 'dejar de conducir' means a person decides not to drive anymore, like a life decision.

La diferencia es importante.

The difference is important.

So the whole climate debate, in Spanish, runs on 'dejar de.' Dejar de quemar petróleo, dejar de emitir carbono.

There's something almost philosophically appropriate about that.

Leaving things behind rather than just stopping them.

Eso es una observación muy poética para un americano, Fletcher.

That's a very poetic observation for an American, Fletcher.

Pero sí, tienes razón.

But yes, you're right.

Aunque a veces me pregunto si los Emiratos realmente van a 'dejar de' usar su petróleo, o si solo van a 'parar' cuando no les quede más.

Though sometimes I wonder whether the UAE is really going to 'dejar de' use their oil, or whether they'll only 'parar' when there's none left.