Expert Offers Climate Strategies For Oil Producer Countries

The wave of climate action, focus on renewable energy and rise of natural gas sweeping across the globe could signal oil’s move out the energy spotlight, leaving some oil-producing countries in a quagmire.

But there are ways for the world’s biggest oil producers to maintain oil exports and manage in the near term and beyond. Strategies include diversifying into alternative sectors and protecting the oil business against so-called climate threats, according to Jim Krane, a fellow at Rice University’s Baker Institute. Speaking on climate strategies for producer countries, Krane focused on Saudi Arabia during an event this week on energy and politics in the Persian Gulf.

“From a Saudi perspective, climate action is seen as an encroaching threat to its main export business and the [oil] rents that its political system needs to survive. So what can they do about it?” he asked. “They can try to mitigate the risk through economic diversification. Climate change provides a real impetus for these oil-dependent states to get serious about diversification and get beyond the oil business.”

Another option is for producer countries to “position their oil sectors themselves to survive during this transition period which promises to unfold over multiple decades,” he added.