Fossil Fuels On The Table At COP28 As OPEC Slashes Production, US Crude Output Breaks Records

COP28 is poised to become the first-ever UN international climate change conference to address the topic of ending fossil fuel usage head-on, according to various reports familiar with the summit's agenda.

Text calling for the eventual phase out of oil, gas and coal is reportedly currently under discussion at COP28, a position which has garnered support from major oil-producing countries including the United States, Norway, the United Arab Emirates and Colombia. This commitment would be non-binding, and would not commit countries to ending the use of fossil fuel by any single set date.

Although national representatives will likely be unable to form a consensus behind ultimately committing to ending the use of oil and gas, even a commitment to reducing emissions from fossil fuels from the world's major countries would mark a milestone of international cooperation.

COP26 in Glasgow in 2021 was the first UN climate conference to even discuss the topic of fossil fuel reduction—that year's summit ended with a commitment to reduce (not eliminate) the use of coal, with no mention of oil or gas.

"The phase-down and the phase-out of fossil fuels is inevitable," Sultan Al-Jaber, President of the UAE's state-run oil and gas company Adnoc as well as formal host of COP28, told reporters in Dubai on Monday.

"The goal is an energy system that has no emissions," Norwegian Foreign Minister Espen Barthe Eide told Reuters on Wednesday.

Partially driving this push is a UN study published in September that found most countries have fallen behind their climate commitments made at the Paris Summit in 2015. The study argues that no new investments in oil and gas infrastructure can be made in the future if the planet's average temperature is to remain below 1.5 degrees Celsius relative to pre-industrial levels by 2050.

Representatives from OPEC and every major oil and gas company are present at COP28. ExxonMobil CEO Darren Woods gave an interview at the summit in Dubai on Monday, where he pushed back on calls for the end of fossil fuel usage, instead suggesting that countries should focus their efforts on emissions reduction measures (namely carbon capture and storage).

"Keep your mind open to a variety of different solutions and make sure that the work that everybody is putting into this is focused on the areas of strength that we can make the most reduction the quickest," Woods said on the topic of carbon emission reductions.

Oil markets have been volatile thus far in 2023. Last week OPEC+ expanded and extended its pre-existing production cuts through early 2024. Meanwhile, U.S. oil production is projected to reach record levels in 2023 thanks in large part to a boost in productivity from Texas' Permian basin.

While the U.S. government expresses support abroad for the end of fossil fuel exploitation in the long term, the private sector shows no signs of abating its output of oil and gas -- and the carbon emissions that follow -- at least for the immediate future.

"We cannot save a burning planet with a firehose of fossil fuels," UN Secretary-General António Gutteres said last week. "The 1.5-degree limit is only possible if we ultimately stop burning all fossil fuels. Not reduce. Not abate. Phaseout."

COP28 will end on Tuesday, at which point a set of non-binding national implementation plans are expected to be announced.