The vast majority of the fossil fuel reserves that countries and companies have today must remain in the ground if the climate crisis is to end, according to an analysis.
The research found that 90 percent of coal and 60 percent of oil and gas reserves could not be extracted if there was even a 50 percent chance of keeping global warming below 1.5 C, the highest temperature. beyond which the worst hit climate impacts.
The scientific study is the first such assessment and highlights the huge disconnect between the climate goals of the Paris Agreement and the expansion plans of the fossil fuel industry. Investigators described the situation as “absolutely desperate.”
“The (analysis) implies that many planned and operational fossil fuel projects (are) unviable,” the scientists said, meaning that trillions of dollars in fossil fuel assets could lose value. New fossil fuel projects only made sense if their backers did not believe the world would act to address the climate emergency, the researchers said.
The report’s findings are “grim” for the fossil fuel industry, implying that oil, gas and coal production must have already peaked and will decline by three percent annually from now on. States that rely heavily on fossil fuel revenues, such as Saudi Arabia and Nigeria, are at especially high risk. A minister of one OPEC state recently warned of “unrest and instability” if their economies did not diversify over time.
To stay below 1.5 ° C, the analysis says:
The United States, Russia and the former Soviet states have half of the world’s coal reserves, but will need to keep 97 percent underground, while the figure for Australia is 95 percent. China and India have about a quarter of the world’s coal reserves and will need to keep 76 percent underground.
Middle Eastern states have more than half of the world’s oil reserves, but they will need to keep nearly two-thirds in the ground, while 83 percent of Canada’s oil from tar sands must not be extracted.
Virtually all unconventional oil or gas, such as from fracking, must remain in the ground, and fossil fuels cannot be extracted from the Arctic.
“It’s absolutely desperate,” said Professor Paul Ekins of University College London, and one of the members of the research team. “We are nowhere near the Paris target in terms of the fossil fuels that people plan to produce.”
“Whenever oil and gas is found, every government in the world, despite everything they may have said (about the climate), tries to pump it out of the ground into the atmosphere as quickly as possible. It will require private companies to write down their reserves but, for countries with nationalized oil companies, they only see a large part of their wealth evaporate.
A new scientific study uncovers the huge disconnect between the climate goals of the Paris Agreement and the expansion plans of the fossil fuel industry. Investigators described the situation as “absolutely desperate.” #ClimateCrisis # COP26
“But the silver lining is that we really can do it. We know that clean electricity technologies can be implemented at scale very quickly when the policy mechanisms to do so are in place. “
The researchers said it was vital to ensure a just transition for the many workers in the fossil fuel industry.
Christiana Figueres, UN climate chief when the Paris climate agreement was signed, said: “We must keep fossil fuels in the ground. A secure future has no room for any new fossil fuel extraction. The shift to clean energy must be accelerated to sustain human activity now and protect human well-being tomorrow. ”
Christophe McGlade, senior analyst at the International Energy Agency (IEA), said: “The research underscores how the rhetoric of addressing climate change has departed from reality. None of the net zero promises made to date by the major oil and gas producing countries include explicit targets to reduce production. “
Mike Coffin, analyst at the Carbon Tracker financial think tank, said: “It is critical that investors in oil and gas companies are aware of the risks of the transition. There is a very real risk of assets being stranded. “
Its latest report finds that companies are at risk of spending more than a trillion dollars on projects incompatible with a low-carbon world, with ConocoPhillips, ExxonMobil, Chevron and Shell being the most exposed.
In May, an IEA report concluded that there could be no new oil, gas or coal developments if the world reached net zero by 2050. A UN report in December found Fossil fuel production must fall rapidly to stay below 1.5 C and avoiding “severe climatic disruption”, but countries were planning an increase in outputs.
The new research, published in the journal Nature, used a complex model of global energy use that prioritized the use of fossil fuels that are cheaper to extract, such as Saudi oil, in the use of the remaining carbon budget. Costly and highly polluting reserves, such as Canadian tar sands and Venezuelan oil, are buried in the model.
The analysis took into account how quickly the use of fossil fuels could be reduced, for example, taking time to phase out the use of coal in India and China. It also considered the cost of renewable energy alternatives in each country. Reserves were defined as the coal, oil and gas that was economical to extract in 2018, before the coronavirus pandemic.
The ratios of untractable reserves produced by the analysis are much higher than for a related analysis in 2015. This reflects a reduction of the temperature target from 2 C to 1.5 C and the rapidly falling costs of renewables and electric vehicles, with the latter significantly reducing the demand for oil.
“It is very likely that the bleak picture that our scenarios paint for the global fossil fuel industry is an underestimation of what is required,” the researchers said. This is because the carbon balance used only gives a 50 percent probability of 1.5 C and because scientists assumed a significant level of CO2 removal from the atmosphere using technology that has yet to be tested at scale.
The researchers said there were some “promising signs” as global coal production peaked in 2013 and oil production is now believed to be at or near peak demand, even according to some industry commentators. . They said action to cut production could include ending subsidies, taxes and even bans on new exploration. Denmark and Costa Rica recently founded a alliance of countries that sets an end date for fossil fuels.
“The net zero test has to be if you want new (fossil fuel production), you have to categorically show what’s going to decrease elsewhere so that we can stay within the carbon budget,” Ekins said. “That, of course, is proof that neither the new oil fields planned in the UK nor the new Cumbrian Coal Mine meet.”
A spokesperson for the International Association of Petroleum and Gas Producers said: “Meeting global energy demand and achieving decarbonisation is a priority for industry and society. Accomplishing this without further investment in new oil and gas fields would require the massive deployment of other energy sources and efficiencies, as well as large investments in new technologies, all accelerated at a rate we have not yet seen. “
Energy ministers in fossil fuel-rich countries recently rejected suggestions that exploration and production should slow. From Australia Keith Pitt said: “Reports of the imminent death of coal are greatly exaggerated and its future is assured well beyond 2030.” In June, commenting on the IEA’s net-zero report, Saudi Arabia Prince Abdulaziz bin Salman said: “I think it’s a sequel to (the) La La Land film.”
The UK government, which hosts the crucial COP26 climate summit in Glasgow in late October, was contacted for comment.