The sale of Saudi Arabia’s national oil and gas company sought a huge cash injection for the toxic fossil fuel industry and, as Anne Alexander and Ameen Nemer argue, the kingdom’s role in the climate crisis benefits a tiny and brutal elite while threatening the lives of many.
On 11 December, while government leaders met in Madrid for the UN climate change treaty talks, COP25, the talk of the world’s financial markets was the flotation of Saudi Aramco – the Saudi Arabian national petroleum and natural gas company – on Riyadh’s Tadawul stock exchange. As scientists, youth activists and politicians warned from the COP25 stage that current policies are leading humanity towards climate catastrophe, investors flocked to buy shares in the state-owned oil company, which has been the world’s largest corporate source of carbon emissions since 1965. Not content with engineering a huge cash injection for the toxic fossil fuel industry through the Aramco share offering, Saudi officials were also organising behind the scenes in Madrid to block agreement on more ambitious moves towards cutting emissions.
The repressive monarchy has long played this kind of role in the politics of oil: combining direct responsibility for accelerating climate change, with systematic efforts to deny that it is happening. As long ago as 1995, at the Intergovernmental Panel on Climate Change in Madrid, Saudi officials were working hard to cast doubt on scientists’ evidence and to create delays and obstruct negotiations over how to deal with the problem. At the root of this lies Saudi Arabia’s long-term dependence on oil: the discovery of massive petroleum reserves in 1938 coincided with the consolidation of the Al Saud family’s control over the Arabian peninsula and transformed their fortunes from rulers of a small desert kingdom, perpetually hovering on the brink of bankruptcy, to one of the wealthiest states in the world. As oil revenues began to flow, King Abdulaziz became less dependent on taxes from the people of Arabia, revenues from the Hajj pilgrimage or the salary he had been paid as a client of the British Empire.
From the beginning, the history of the kingdom has been entwined with that of the US oil companies, who secured a concession to drill for oil in the newly formed kingdom in 1933. The company took on the name Arabian American Oil Company, or Aramco for short, in 1944. The Saudi government took over Aramco during the 1970s, completing the nationalisation process in 1980. The relationship between the US and Saudi Arabia is not just about connections between companies, however. Saudi Arabia depends on the United States for its security. However, that dependence on a foreign superpower has cost the absolute monarchy its political independence. Although Saudi-US ties go back to the 1933 oil concession, the foundation stone of the strategic relationship between the two states was laid by US president Roosevelt and the founder of Saudi Arabia, King AbdulAziz. That relationship has continued until today with Trump repeatedly stating clearly that the Kingdom has to pay to be protected.
For whose benefit?
So who will benefit from the Saudi Aramco share offering? Prince Mohamed Bin Salman orchestrated the public listing of Saudi Aramco as a means to raise funding for plans to transform the Saudi economy, following the launch of his ‘Vision 2030’ development strategy. Just like the corporate oil giants which tout their interest in renewable energy as a way to show they have a future beyond the profits from fossil fuels, Saudi Arabia’s rulers are wooing international investors with schemes to develop new industries and services.
However all the decisions about how to spend these billions will be taken by a tiny, unaccountable and brutal elite. Since its foundation, Saudi Arabia was ruled mainly by the House of Saud and their loyalists. The absolute monarchy suppresses any call for democracy and has a gruesome record of human rights abuses including torture until death and executions. Crown Prince Mohamed Bin Salman, who is responsible for the kidnapping and murder of journalist Jamal Khashoggi has stated that only death will stop him from running the country for 50 years. Mohamed Bin Salman is also responsible for Saudi Arabia’s war in Yemen, despite the fact that this has drained the economy of billions and dragged on five years, causing untold suffering there.
Saudi Arabia’s oil wealth isn’t shared equally among its citizens either. While the royal family and the tiny number of rich people enjoy summer in Europe and somewhere else, spending millions, they give the impression that all people in Saudi Arabia are rich. The Saudi regime spends billions on PR firms to whitewash its crimes and cover up the reality inside Saudi Arabia. Twenty-five percent of people in Saudi Arabia live in poverty according to unofficial statistics while 12.8 percent is the number of unemployed according to official statistics. Aramco, the biggest government-owned oil company in the world demolished gardens and farms in 1996 by claiming part of Al-Ramis Endowment estate belongs to the company. In 2019, the whole of the Al-Ramis estate was taken by the company against the will of many of the farmers and owners. This 8.4 million square metres of mostly planted land has been flattened to build residential areas despite the fact that Saudi Arabia has huge empty spaces which can be used for such projects.
The kingdom and the climate crisis
What about Saudi Arabia’s claims to be investing in renewable energy? These are about as convincing as those by oil companies which continue to profit from burning the planet while trying to sell us back energy from the sun and the wind. Mohamed Bin Salman announced an enormous solar energy project in the Arabian desert in March 2018 with typical fanfare as a “huge step in human history.” By October it had been cancelled. Meanwhile Saudi Arabia increased oil production.
The kingdom’s rulers are perfectly well aware that their oil stocks are finite and the bonanza they have paid out for nearly a century will come to an end at some point. They also know that the tide is turning on a global scale against the fossil fuelled economy which has pushed humanity into an era of climate disaster. Among the “risk factors” they draw to potential investors’ attention in the 469-page prospectus published in April 2019, Saudi Aramco officials list “the impact of climate change on the demand for, and price of, hydrocarbons.”
The problem for the rest of us is that climate change is already happening – and ordinary people around the world are paying the price – and emissions keep rising. On its own, Saudi Aramco has produced nearly 4.4 percent of the global total of carbon emissions since 1965, and its bosses want to keep on pouring fuel on the fire. The Saudi Aramco flotation, which has been described by environmental groups as “the biggest single infusion of capital into the fossil fuel industry” since the Paris climate agreement, also shows starkly how the logic of the financial markets puts money and power before the future of people and planet. Saudi Arabia’s policies are of course reinforced by the ruling family’s dependence on the USA. Following Trump’s decision to pull out of the Paris climate agreement, the USA and Saudi Arabia share joint-bottom place in the Climate Change Performance Index, which monitors countries’ climate protection policies, greenhouse gas emissions and renewable energy use.
The impact of accelerating climate change is also being felt in Arabia itself and neighbouring countries through rising temperatures and water shortages. According to climate scientists Jeremy Pal and Elfatih Eltahir, large areas of the Gulf are likely to become uninhabitable for humans as a result of regular extreme summer temperatures and humidity towards the end of this century unless greenhouse gas emissions fall significantly. Of course it is the poorest who suffer the worst consequences, such as the victims of Saudi Arabia’s brutal war in Yemen where the impact of climate change is exacerbated by the devastation caused by the Saudi and Emirati bombing campaign.
All of this points towards the need for anyone who takes seriously the threat of climate change to stand with Arabians who are campaigning for democracy. There are activists both inside and outside the Kingdom who have been organising and campaigning over a wide range of issues, such as ending misogynist laws which curtail women’s rights, or against the frequent use of the death penalty and torture. Currently their struggles often go unnoticed by the trade unions and the left, and are little known within the climate movement. But we all have a common interest in ending the rule of the repressive Saudi monarchy.