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Yasir al-Rumayyan, chairman of Saudi Aramco. Photo: AFP via Getty Images

It's tough to think about long-term investments in Saudi Aramco, the world's biggest oil producer, without climate change entering the equation.

The state of play: A huge number of brain cells are devoted to gaming out when global oil demand may peak and what future climate policies mean for the sector. Some forecasters, like the International Energy Agency, don't see a peak before 2040 absent far stronger climate efforts. Others think it could be sooner.

But, but, but: It's not so clear that carbon constraints or peak demand would be Aramco's enemy, at least not for decades.

  • Saudi oil, compared to other petro-states and companies, has a lower carbon intensity when produced, lessening emissions. It's something Aramco is keen to tout and did when announcing that the IPO is finally, actually, really, truly (theoretically) happening.
  • So it's not impossible to imagine a scenario when Aramco has a comparative advantage if the world gets more serious about reining in what are still rising emissions.

What they're saying: Atlantic Council energy and climate expert David Livingston notes that once crude demand peaks and begins to decline, there will still be decades with lots of oil thirst, but perhaps at lower prices.

  • He tells me that Saudi production costs are relatively low, "so in a world of lower average oil prices they would be able to sustain high levels of production even as other high-cost projects (including offshore and some shale) are forced to shut down."
  • Livingston also argues that Saudi oil would be well positioned to compete in a world with carbon pricing and carbon border adjustments due to their per-barrel emissions and resources to invest in CO2 capture.

The bottom line: "Whether being king of a slowly atrophying industry is attractive enough to justify a premium from investors is another question, however, and one that we will all be watching closely in the months and years ahead," Livingston said.

Go deeper: Saudi Arabia approves IPO of oil giant Aramco

Go deeper

"Atmospheric river" swings Northern California from drought to flood

The bomb cyclone and atmospheric river seen via satellite on Sunday. The center of the storm is at the middle of the comma shape, due west of Washington State. (CIRA/RAMMB)

A series of powerful "atmospheric river" storms are delivering historic amounts of rainfall across parts of drought-stricken California and the Pacific Northwest from this weekend, forecasters warn.

Why it matters: A strong atmospheric river, packing large amounts of moisture, is predicted to whiplash Northern California from drought to flood.

Mike Allen, author of AM
5 hours ago - Politics & Policy

Fauci fires back at Rand Paul for slam on tonight's "Axios on HBO"

Responding to charges by Sen. Rand Paul on Sunday's "Axios on HBO," NIAID director Anthony Fauci told "ABC This Week" that it's "molecularly impossible" for U.S.-funded bat virus research in China to have produced COVID-19.

Why it matters: The issue 0f Wuhan research was reignited on the right last week with a National Institutes of Health letter to Congress disclosing more about the research.

Manchin, Schumer huddle with Biden in Delaware to discuss spending bill

Senate Majority Leader Chuck Schumer (left) and Sen. Joe Manchin at the U.S. Capitol in 2014. Photo: Win McNamee/Getty Images

Sen. Joe Manchin (D-W.Va.) will meet with President Biden and Senate Majority Leader Charles Schumer (D-N.Y.) on Sunday morning in Delaware as Democrats look to reach an agreement on the massive spending measure.

Driving the news: Democrats are still negotiating what to keep in the bill and how to pay for it, with Biden saying on Thursday that the party does not have the votes to raise the corporate tax rate.