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Top oil exporter Saudi Arabia targets net zero emissions by 2060

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October 23, 2021

By Yousef Saba, Saeed Azhar and Marwa Rashad

RIYADH (Reuters) -Saudi Arabia’s crown prince said on Saturday that the world’s top oil exporter aims to reach ‘net zero’ emissions of greenhouse gases – mostly produced by burning fossil fuels – by 2060 – 10 years later than the United States.

He also said it would double the emissions cuts it plans to achieve by 2030.

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Crown Prince Mohammed bin Salman and his energy minister said Saudi Arabia would tackle climate change, but also stressed the continued importance of hydrocarbons and said it would continue to ensure oil market stability.

They were speaking at the Saudi Green Initiative (SGI) ahead of COP26, the U.N. climate conference in Glasgow at the end of the month, which hopes to agree deeper global emissions cuts to tackle global warming.

The United States is committed to achieving ‘net zero’, meaning that it emits no more greenhouse gases than it can capture or absorb, by 2050. But China and India, the world’s second and third biggest emitters, have not committed to this timeline.

Amin Nasser, chief executive of the state oil giant Saudi Aramco, said it was counterproductive to “demonise” hydrocarbons. He said Aramco aimed to expand its oil and gas production capacity while also achieving net zero emissions from its own operations by 2050.

He called for more global investment to ensure adequate crude oil supplies.

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Prince Mohammed said in recorded remarks that the kingdom aimed to reach net zero by 2060 under its circular carbon economy programme, “while maintaining its leading role in strengthening security and stability of global oil markets”.

He said Saudi Arabia would join a global initiative on slashing emissions of methane by 30% from 2020 levels by 2030, which both the United States and the EU have been pressing.

‘HYDROCARBONS STILL NEEDED’

U.S. climate envoy John Kerry is due to attend a wider Middle East green summit in Riyadh on Monday.

The SGI aims to eliminate 278 million tonnes of carbon dioxide emissions per year by 2030, up from a previous target of 130 million tonnes. The crown prince said the SGI initiative would involve investments of over 700 billion riyals ($190 billion) in that time period.

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Saudi Arabia’s economy remains heavily reliant on oil, although the crown prince is trying to promote diversification.

Energy minister Prince Abdulaziz bin Salman said the world needed fossil fuels as well as renewables.

“It has to be a comprehensive solution,” he said. “We need to be inclusive, and inclusivity requires being open to accept others’ efforts as long as they are going to reduce emissions.”

He said the kingdom’s younger generation “will not wait for us to change their future”.

He said net zero might be achieved before 2060 but the kingdom needed time to do things “properly”.

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Another Gulf oil producer, the United Arab Emirates, this month announced a plan for net zero emissions by 2050.

The non-profit Climate Action Tracker consortium gives Saudi Arabia its lowest possible ranking, “Critically insufficient”.

Saudi Arabia’s first renewable energy plant opened in April and its first wind farm began generating in August.

It does, however, have plans to build a $5 billion plant to produce hydrogen, a clean fuel, and state-linked entities are pivoting to green fundraising. ($1 = 3.7507 riyals)

(Reporting by Yousef Saba and Saeed Azhar in Riyadh, Marwa Rashad in London and Maher Chmaytelli in Dubai; additional reporting by Raya Jalbi in Dubai; writing by Ghaida Ghantous; editing by Jason Neely and Kevin Liffey)

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Yen shines, Aussie sags as Powell turns hawk despite Omicron uncertainty

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December 1, 2021

By Kevin Buckland

(Reuters) – The safe-haven yen held steady on Wednesday, while the risk-sensitive Australian dollar languished near a one-year low after Federal Reserve Chair Jerome Powell signalled a faster taper of stimulus despite the risks around the Omicron COVID-19 variant.

Investors fear that hasty monetary tightening could choke off the nascent economic recovery, with little still known about Omicron’s potential to evade current vaccine protection or how deadly it might be.

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“Investors are staying cautious,” said Shusuke Yamada, chief Japan FX strategist at Bank of America-Merrill Lynch.

“It’s very difficult to make a judgement about the impact of Omicron when we don’t have a lot of information.”

Global markets fell sharply on Tuesday after the head of drugmaker Moderna said existing COVID-19 vaccines would be less effective against the new variant, although BioNTech’s chief executive struck a cautiously positive note, saying the vaccine it makes with Pfizer would likely offer strong protection against severe disease from Omicron.

The Aussie weakened 0.12% to $0.71245 after dipping as low as $0.7063 of Tuesday for the first time since Nov. 3, 2020. The New Zealand dollar was largely flat at $0.68195 after also touching the lowest since early November of last year at $0.6773 in the previous session.

The greenback ticked 0.09% higher to 113.26 yen, but still within sight of an overnight low of 112.535, a level not seen since Oct. 11.

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Powell said in testimony to Congress on Tuesday that Fed officials will discuss at their Dec. 14-15 policy meeting whether to end bond purchases a few months earlier than had been anticipated. The Fed chief finally did an about face on a long-held contention that inflation would be “transitory.”

Powell expressed confidence that the impact from Omicron will be far less than in the spring of 2020, when the pandemic erupted.

In response, traders wound up interest rate hike expectations, with money markets now almost fully priced for tightening at the June meeting.

Powell’s testimony continues later Wednesday.

“Powell’s unexpectedly hawkish tone overnight, essentially asserting that inflation risk has primacy over growth/Omicron risks, should leave the (dollar index) forging ahead,” Westpac strategists wrote in a client note.

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The index, which measures the dollar against six major peers, traded at 95.921 after sliding to 95.544 on Tuesday for the first time since Nov. 18, weighed down largely by an unwinding of bearish bets on the euro, the most heavily weighted component in the basket.

Westpac recommends buying dips in the index down to the mid-95 level.

The single currency slipped 0.04% to $1.1331, down from a two-week high of $1.1387 overnight.

Sterling traded not far from an 11-month low of $1.31945 reached overnight, last changing hands at $1.32955.

(Reporting by Kevin Buckland; Editing by Shri Navaratnam)

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OPEC+ begins two days of talks amid oil rout

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December 1, 2021

LONDON (Reuters) – OPEC and its allies begin two days of meetings on Wednesday to decide whether to release more oil into the market or restrain supply amid an oil price rout and fears the Omicron coronavirus variant could weaken global energy demand.

Oil prices fell to near $70 a barrel on Tuesday from as high as $86 in October, posting their biggest monthly decline since the outset of the pandemic, as the new variant raised fears of a supply glut.

For November, Brent fell by 16.4%, while WTI fell 20.8%, the biggest monthly fall since March 2020.

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“The threat to oil demand is genuine,” said Louise Dickson, senior oil markets analyst at Rystad Energy. “Another wave of lockdowns could result in up to 3 million bpd (barrels per day) of oil demand lost in the first quarter of 2022.”

Also pressuring prices, Federal Reserve Chair Jerome Powell said the U.S. central bank likely will discuss speeding its reduction of bond purchases amid a strong economy and expectations that a surge in inflation will persist.

The Organization of the Petroleum Exporting Countries (OPEC) will meet on Wednesday after 1300 GMT, followed by a meeting on Thursday of OPEC+, which groups OPEC with allies including Russia.

Several OPEC+ ministers, including from Russia and Saudi Arabia, have said there was no need for a knee-jerk reaction from the group.

But some analysts have suggested OPEC+ might put plans to add 400,000 barrels per day (bpd) to supply in January on hold.

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The group was already weighing the effects of last week’s announcement by the United States and other countries to release emergency crude reserves to temper energy prices.

OPEC+ has been gradually winding down record supply cuts of 10 million bpd implemented last year and currently has some 3.8 million bpd of reductions still in place.

The increase in OPEC’s oil output in November has again undershot the rise planned under a deal with allies, a Reuters survey found.

(Reporting by OPEC team, writing by Dmitry Zhdannikov, editing by Richard Pullin)

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New York accuses Amazon of backsliding over worker safety, seeks monitor

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December 1, 2021

By Jonathan Stempel

NEW YORK (Reuters) -New York state’s attorney general on Tuesday asked a state judge to appoint a monitor to oversee worker safety at an Amazon.com Inc fulfillment center in New York City, citing the retailer’s alleged rollbacks of COVID-19 safety measures that were “already inadequate.”

Letitia James, the attorney general, also wants a court order requiring the rehiring of Christian Smalls, who Amazon fired for allegedly violating a paid quarantine by leading a March 2020 protest over conditions at the Staten Island facility.

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James, a Democrat running to become New York governor, sued https://www.reuters.com/article/us-amazon-com-complaint/new-york-attorney-general-sues-amazon-over-covid-19-shortfalls-idUSKBN2AH0C2 Amazon in February in a New York state court in Manhattan over its safety protocols for thousands of workers at the Staten Island facility and a distribution center in the New York City borough of Queens.

She said Amazon is valuing profit over safety and “acting as if the pandemic is over” by rolling back safety protocols even as the Omicron variant https://www.reuters.com/business/healthcare-pharmaceuticals/omicron-variant-could-outcompete-delta-south-african-disease-expert-says-2021-11-30 of the COVID-19 virus threatens to increase transmission rates.

The alleged rollbacks include making the Staten Island facility “mask-optional” for vaccinated workers while not requiring masks for unvaccinated workers, and failing to enforce social distancing.

In her motion for a preliminary injunction, James said the proposed monitor would oversee upgraded cleaning, hygiene and social distancing procedures.

“While case rates, hospitalizations, and deaths rise, Amazon rescinds protections and packs in more workers for its holiday rush,” James said in her motion. “Amazon’s ongoing – and worsening – failure to protect workers must be halted.”

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Amazon said in a statement it has taken a “comprehensive approach” to COVID-19 safety.

“It’s disappointing that the Attorney General is seeking to politicize the pandemic by asking for ’emergency’ relief now despite having filed this lawsuit nine months ago,” Amazon said.

The Seattle-based company is appealing a judge’s refusal in October to dismiss James’ lawsuit.

Amazon on Nov. 15 reached a separate settlement with California https://www.reuters.com/legal/government/amazon-settles-california-claims-it-concealed-covid-19-cases-workers-2021-11-15 over claims it violated a state “right-to-know” law by concealing from warehouse workers and local health agencies the numbers of workers being infected with COVID-19.

(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis and Stephen Coates)

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