No oil company wants to be the first to abandon the fuel. Apart from Gustavo Petro’s Colombia
Former Brazilian President Lula was laughing at me. In March, I was sitting across from 76-year-old Luiz Inácio Lula da Silva in an excessively air-conditioned studio in So Paulo, interviewing him for a piece on Brazil’s October elections, in which he is winning the polls. I had just asked Lula whether he would be interested in signing on to Gustavo Petro’s audacious climate pledge—then the leftist frontrunner in Colombia’s 2022 presidential campaign and, as of this week, the country’s president-elect. As part of his campaign, Petro promised to immediately halt issuing new permits for oil exploration, which is significant in a nation where oil accounts for 40% of exports and 12% of government revenue. Petro also requested that Lula, who may become his most significant regional ally, join him. So, would he do it?
“Look, Petro has the right to suggest anything he wants,” Lula continued, laughing and shaking his head as though we were talking about a strange old acquaintance. “However, in the instance of Brazil, this is not true. It’s not for real in the situation of the world.”
It just become a lot more serious for Colombia. Petro, a former communist guerilla, received 50.47 percent of the vote in the second round ballot on Sunday, barely beating a populist businessman who received 47.27 percent. On the day he takes office on August 7, the president-elect will halt issuing new oil licences. He will then seek parliamentary approval to set a 12-year timeframe for the completion of already-approved exploration. According to Petro’s advisers, the oil produced under those current contracts is sufficient to meet local demand for “at least” 23 years if exports are reduced. Long before the oil runs out, the government promises to build enough renewable energy infrastructure to replace fossil fuels.
How far-reaching is Petro’s ambition for oil exploration?
According to detractors, Petro’s energy strategy is “economic suicide.” Many fear that his strategy to expand agriculture and tourism would not be enough to compensate for reduced oil export profits, potentially leaving a large gap in government finances. Analysts expect that the peso will depreciate significantly against the dollar as a result of declining investor confidence in Colombia. Furthermore, oil industry organizations argue that output may decline too rapidly to meet Colombian demand until alternative fuels become available, forcing the country to rely on imports.
Such concerns have been expressed by politicians and fossil fuel supporters all across the world, resulting in a worldwide impasse on oil: practically all of the world’s top 33 oil producers have promised under the Paris Agreement to attempt to limit global warming to 1.5°C over pre-industrial levels. However, no dates for ending oil production have been established that fit with that aim, according to experts. According to a March analysis by the International Institute of Sustainable Development (IISD), affluent nations must stop producing oil and gas by 2034, and countries in Colombia’s medium income band must do so by 2043 to have a 50:50 chance of meeting the 1.5°C objectives. Petro’s two-decade production phase-out is not ambitious in terms of climate change—just it’s about acceptable.
Petro’s political purpose, on the other hand, is extreme. “This would be absolutely head and shoulders beyond what other nations are doing,” says Kevin Anderson, the IISD study’s lead scientist at Manchester University’s Tyndall Center for Climate Change Research. Even though both governments claim to be climate leaders, Norway continues to award dozens of new oil exploration licenses each year, while the United Kingdom is contemplating a new wave of oil and gas contracts, Anderson adds. “These are both extremely affluent countries that would stay extremely prosperous [in the absence of oil and gas production].” However, they are exhibiting a blatant contempt for climate science.” He adds that Petro’s oil strategy “is the kind of leadership we need on climate change, and there’s very, very little of it around.”
No one wants to be the first to give up their oil profits: of the small number of nations that have put a halt to oil development in recent years, Belize is the only one where oil contributes more than 1% of GDP. And politicians don’t want to be accused of jeopardizing their nations’ energy security, which has been heightened by Russia-EU tensions over natural gas since the start of the Ukraine crisis. “Angela Merkel made the decision to shut down all of Germany’s nuclear power reactors.” And today, Europe relies on Russia for energy,” said Brazil’s Lula. He has promised to invest in new domestic oil refinery facilities to protect Brazilians from global price fluctuations.
A futuristic vision
Given the global background, how could Petro garner the support of the majority of Colombians for his anti-oil platform? According to Claudia Navas, a Bogotá-based analyst for consultancy Control Risks, Petro did not offer his oil proposal as a stand-alone climate policy, and it was unlikely to be a deciding issue for most voters on its own. According to Navas, the oil phase-out is part of a broader “vision for change” in Colombia that appealed to working-class people who had previously been excluded from the country’s economic progress. Following his election, Petro urged Latin American leftists to “stop dreaming that a future of social justice and economic redistribution could be established on the base of high oil, coal, and gas prices.”
It also helps that Petro may highlight renewables as a significant prospect for Colombia. The country currently generates about 70% of its electricity from hydropower, and its various climates provide above-average potential for wind and solar, as well as green hydrogen generation. These sources, when combined, might allow Colombia to export renewable energy rather than oil in the future.
Residents of Barrancabermeja, a northern oil town with a strong Marxist pedigree, appear to have believed Petro’s proposals, voting for him handily. The town’s mayor expressed hope that the area will retain its “energy capital” designation as he congratulated the president-elect. “We expect that your idea for energy transition would create job possibilities for the industry that has historically maintained Barrancabermeja and the country’s economy.”
All of this is not to argue that concerns about Colombia’s economy are unjustified. Petro will need to back up his high words with a specific plan for creating low-carbon businesses to replace fossil energy and earnings in places like Barrancabermeja and across the country in the next months and years. The performance of Petro will have a significant impact on leaders in other oil-producing countries such as Brazil. “The implementation will decide whether Petro’s policy creates more panic in the area about the energy transition or drives people towards it,” Navas adds.