Going Underground – Keeping Fossil Fuels Where They Belong

January 8, 2015

carbon capture cartoon

Illustration by Belle Mellor [http://bellemellor.com/]

If we want to limit climate change to a 2 degree rise in global temperatures, the fossil fuel industry as we know it will have to disappear. Or it will have to be “disappeared.”

That is the message from a radical new study published in Energy Policy and Nature by analysts Christopher McGlade and Paul Ekins that has been garnering wide coverage in news outlets across the world.

Ekins and McGlade set out to analyse what proportion of the world’s oil, coal and gas reserves could be exploited under the assumption that the world remained within CO2 emission limits that, it is widely thought, will ensure ‘only’ a 2 degree centigrade global temperature rise.

Their modelling took place via two global databases maintained by the fossil fuel industry and independent industry analysts, which had never before been combined in such a way. The researchers also modelled future fossil fuel usage under two scenarios.

In their first scenario, Carbon Capture and Storage (CCS) was widely adopted by fossil fuel producing nations until the year 2035. In the other, no CCS was modelled. The reality may be in between, but as CCS remains highly speculative, it makes sense to err towards the more pessimistic side of things.

The results are not encouraging. Ekins and McGlade report that, under either of their scenarios, a huge proportion of usable fossil fuel reserves would have to remain in the ground. In the no-CCS scenario, they suggest that 45 percent of recoverable oil reserves must remain un-exploited by 2035. In the scenario with CCS, more fossil fuels can be exploited, but the difference is not massive.

The researchers suggest that many potential energy sources will be non-starters if we seek to limit temperature rises.

They argue that no Arctic drilling should take place and very limited deepwater recovery of oil and gas. Shale oil or “light tight oil” is also marginal, “play[ing] a minor role in a scenario with CCS, while without CCS it reaches only a small level of production in early periods before declining to nothing by 2020.”

Ekins and McGlade are attuned to the implications of their modelling, noting that their “results suggest that any parallel ‘shale oil’ revolution would not be at all helpful in the transition to a low-carbon energy system” despite the boosterism which currently surrounds such resources.

In fact, the central finding of the research is that politicians and corporations across the world need to get real. As they conclude, “a large disconnect appears to exist between policies permitting exploration in new areas, particularly in Arctic and deepwater areas, and pledges to restrict temperature rises to 2 °C.” This could be extended to shale oil and, in fact, major conventional oil production scheduled to come online in the near future.

For Ekins and McGlade, “Policies should therefore not encourage either the development and exploitation of all and every oil resource discovered, or the discovery of more expensive resources.”

This is radical stuff. What is actually happening is that corporations are increasing their future production as we speak, investing in conventional and ‘more expensive sources’ and governments are abetting them. Assuming that action will be taken globally to limit temperature increases to 2 degrees by 2100, this means that a vast “carbon bubble” is being inflated. Trillions in dollars of fossil fuel investments could become worthless, if the resources that they are based on cannot be exploited.

However, these resources are not politically innocent. The corporations that are banking on them are constantly seeking to protect them via political investments. That’s why governments are so keen to promote fracking anywhere, anytime, or so it seems. And it is why the work Ekins and McGlade must inform a popular movement to keep fossil fuels in the ground.

McGlade himself seems a little naïve when he tells the Guardian that “If some UK shale gas resources turn out to be economically viable, and provided the local environmental impacts can be made acceptable, I would say we should use them” then notes in the same breath that “the caveat is what fossil fuels should we then not be using from somewhere else” and that “is a question I have never heard asked by a policy maker in this country.”

As the Guardian report by Damian Carrington notes, “Major fossil fuel companies face the risk that significant parts of their reserves will become worthless, with Anglo American, BHP Billiton and Exxaro owning huge coal reserves and Lukoil, Exxon Mobil, BP, Gazprom and Chevron owning massive oil and gas reserves.”

Yes, if we make them face that risk. And there’s the rub. There is not currently enough pressure on corporations and governments to make the necessary carbon budgeting adjustments.

When politicians gush about the benefits of fracking, they should be made to commit to reducing fossil fuel consumption from other sources of energy. However, that’s not the way free market capitalism works. In reality, the free market is propelling us headlong into a climate apocalypse, where the temperature rise is well, well over 2 degrees. We need deep and imminent political change to reshape the economic system, and the study by Ekins and McGlade is eloquent proof.


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