Marc Gunther » Sultan Al Jaber

Abu Dhabi: oil today, green tomorrow?

Marc — Mon, 17 Jan 2011 18:57:04 +0000

Abu Dhabi: not quite "green"

Whatever you think about the rulers of Abu Dhabi, the oil-rich capital of the United Arab Emirates and host of this week’s World Future Energy Summit, you have to give them credit for thinking long-term.

Matter of fact, the most significant word in the name of this global clean energy conference is future.

Because today, Abu Dhabi is awash in oil money and emitting carbon at a furious pace.

An emirate of 1.6 million people, tucked between Oman and Saudi Arabia on the Arabian Gulf, Abu Dhabi looks to a visitor like a vast sprawling, construction site, each luxury development more lavish than the next. Most labor here is performed by workers imported from India, Pakistan and Bangladesh. (Oil flows out, people flow in.) Broad avenues are crowded with cars. Skyscrapers, hotels and palaces are lit all night. There’s nothing “green” about any of that.

Yet the ruling family is investing many millions and perhaps billions of dollars in clean energy, including solar, wind, nuclear, coal capture and sequestration, efficiency, the smart grid and an entirely new, supposedly clean, high-tech new city called Masdar City. The Masdar company is also investing in clean tech startups around the world, including U.S.-based solar companies Solyndra and HelioVolt; it is building a “solar park” with a local partner in a suburb of Berlin and it is an investor in the big London Array offshore wind project in the UK.

No wonder Abu Dhabi and Masdar have the attention of global leaders and big companies–Hillary Clinton visited last week, the UN chief Ban Ki Moon is here today, the heads of Pakistan, Bangladesh and Iceland are coming and giant multinationals including Daimler, ExxonMobil, BP, Total, Shell, Siemens, GE and Johnson Controls are all exhibiting this week. MIT helped develop an institute of science and technology that is already operating in Masdar City.

Hopes are high. As Mrs. Clinton put it:

We are betting that this incredible investment represented by Masdar is going to pay off, and when it pays off it will not only mean a better life for the people of this country and this region, it will have ripple effects throughout the world.

But when and how will the investment pay off? That’s harder to say.

Certainly the rhetoric and the scope of the Masdar initiative are impressive. The venture is not betting on any one technology or solution, but investing in many, including nuclear power and what it calls “clean fossil fuels.”

As Dr. Sultan Al Jaber, the CEO of Masdar, put it in his opening remarks to the summit:

To ensure the emergence of the most commercially viable, scalable and efficient technology, we must create competition, not across the energy mix, but instead, within each technology share.

This way, renewable energy sources will compete against other renewable energy sources, for available R&D funds and financial incentives.

This is impressive, given the fact that Abu Dhabi, by its own estimate, has enough hydrocarbon reserves at current production levels to last 100 years. Investing in clean energy, Dr. Jaber said, is a way of diversifying today’s economy and preparing for a low-carbon or post-carbon future.

Masdar Carbon, for example, is developing carbon capture and storage (CCS) technology to capture CO2 from power plants and heavy industry. It’s also building pipelines from those facilities to the oil fields. The captured CO2 will then be injected into the ground to result in additional oil production, replacing natural gas which is currently used for that purpose; the CCS process gets more oil out of the ground and permits the export of more natural gas.

Carbon capture and storage, according to Masdar, should also

protect the global demand for hydrocarbons–and thus the value of Abu Dhabi’s in-ground hydrocarbon reserves–in a carbon-constrained future, since CCS will help mitigate the likelihood of potential adverse policies or trade barriers by providing the means to burn oil and gas in a clean manner.

Is that “green”? You decide.

Until the clean energy future arrives, oil, banking, trade, real estate and tourism will driving the economy in Abu Dhabi and the rest of the UAE. The UAE is the world’s third largest oil exporter, behind Saudia Arabia and Russia. Dubai, famously, has a ski slope inside a shopping mall.

Wait, there’s more. The New Internationalist magazine says this about the UAE:

Not only does this desert state hold several verdant golf courses for tourists, the temperatures of the sand on some of its beaches are even cooled so that 7-star guests need never worry about burning their tender soles! With even polo ponies living in state-of-the-art air-conditioned quarters, and with virtually no public transport, it is unsurprising that the Worldwide Fund for Nature ranked the UAE as having the worst per capita carbon footprint in the world. The government acknowledges this issue and has invested in renewable energies to some extent, but freely admits that as long as there is a need for fresh water and temperatures in the Gulf region remain high, environmentally costly desalination and air conditioning will continue unabated.

The future can’t come soon enough.

Uh, no

The mecca of renewable energy

Marc — Mon, 19 Jan 2009 14:58:50 +0000

In these dismal economic times, it’s remarkable that 15,000 to 20,000 people traveled to Abu Dhabi, of all places, for a clean-energy conference. The renewable energy business, after all, is reeling from the global recession, the credit crunch and the precipitous drop in the price of oil.

Signs of distress are not hard to find. There hasn’t been a successful clean tech IPO since First Solar went public in 2006. Wind power and solar energy companies are laying off workers, according to Greentech Media. Shares of renewable energy companies tumbled in 2008: The WilderHill New Energy Global Innovation Index (ticket symbol NEX) fell by 61%.

Nevertheless, here in Abu Dhabi, the mood at the World Future Energy Summit is surprisingly upbeat. Partly that’s because, 7,000 miles away, Barack Obama is about to become the next president of the United States, and there’s hope that his “green stimulus” program will deliver much-needed funds for research and tax incentives that will spur investment in energy efficiency and renewables.

Mostly, though, the business people and government officials here are optimistic because the fundamentals driving the renewable energy sector—namely, rising demand for power, the threat of climate change and energy security—are as strong as ever.

About 1.6 billion people in the world still don’t have an on-off switch in their lives; they’ll need energy to escape poverty. The science around climate change gives us more, not less, reason to act. As for energy security, Russia’s threats to cut off natural gas to eastern Europe are just the most recent reminder of why no nation wants to be too dependent on others for energy.

Dr. Sultan Al Jaber, who is chief executive of the Masdar Initiative, the clean-energy company that is sponsoring the conference, put it in this way in his opening address: “Renewable energy continues to make absolute sense, even in difficult times such as these.”

As if to underscore the point, Al Jaber announced that Abu Dhabi has pledged to generate 7% of its electricity from renewable sources by 2020.

“This is a bold statement from an OPEC-member state whose economy is dominated by oil and gas,” he said.

It also represents “a significant business opportunity for local and international companies.”

That’s why about 300 companies and 20 governments have sent delegations to Abu Dhabi. (See below for an array of corporate logos from the exhibition floor.) These companies see renewable energy as a big business, going forward.

Said Al-Jaber: “The progress we are making is irreversible.”

Some other observations from my second day in Abu Dhabi:

The view from MIT: Because MIT is a research partner of Masdar, Susan Hockfield, the university’s president, was the only academic to deliver a plenary speech at the conference. She advocated an all-of-the-above approach to energy, saying that with sufficient research, “safer nuclear” and “cleaner coal” will be part of the mix.

So will solar energy, Hockfield said, about which there is enormous excitement these days at MIT. “The amount of sunlight that reaches the earth’s surface in an hour contains enough energy to meet the world’s energy needs for a year,” Hockfield said.

Another big opportunity lies in energy storage. Improvements in battery technology, she predicted, will transform electric cars from a “quaint, pricey boutique option” to a “mainstream affordable solution.”

She also talked about research into new forms of energy storage, including “carbon nanotube-based ultra capacitors” and “benign viruses that self-assemble into extremely light flexible battery components without producing toxic byproducts.” For more on the latter, see this.

What’s wrong with this picture?: The Gulf News, an English language daily here, provides decent coverage of the U.S. and Europe, drawing from global wire services. A Maureen Dowd column about Bush and Obama ran this morning, as did dispatches from The Economist.

But there’s not a word of criticism of the ruling family of the UAE and coverage of the war in Gaza is one-sided. A column by the editor-in-chief of the paper compared Israel’s treatment of the Palestinians to Hitler’s treatment of Jews.

And a tourism map of Abu Dhabi given out by the Sheraton Hotel, where I’m staying, has a decidedly Arab-centric view: On a map of the region, showing Abu Dhabi’s location in the Persian Gulf, Israel simply doesn’t exist.

The World Really is Flat: Few cities anywhere are as globalized as Abu Dhabi, where between 80 and 90% of the people are expats. Most are laborers but many are well-educated professionals from the Middle East, Asia and Europe.

TV channels broadcast in many languages. The hotel offers Arabic, French, Spanish, Russian, Japanese and Indian channels, along with CNN, Bloomberg, ESPN and Fox Sports.

So I had high hopes of watching the NFC and AFC championship games over the weekend when I checked in, and I wasn’t disappointed. The thing is, the only channel showing the games was broadcasting them….in German.

Some logos from the exhibition floor:

I’m not sure if a hybrid Chevy Tahoe really belongs at a clean energy exhibition.