Have the recent pronouncements of the death of oil and reigning renewables been more rhetoric than reality? Yes and no. It’s true that peak oil is now closer than ever, and globally we’re seeing a more earnest effort to decarbonize than ever before, in large part thanks to green stimulus packages for post-COVID economic recovery. But for all of the advances that green energy is making around the world, it’s just not enough to achieve the kind of greenhouse gas emissions reductions necessary to curb the impact of climate change. In fact, it’s not even close. This week Axios reported on the “chasm between CO2 goals and energy production,” saying that “projected and planned levels of global oil, natural gas and coal production are way out of step with the kind of emissions cuts needed to hold global warming significantly in check.” This reporting is based on a brand new study. The second annual “Production Gap Report” is the continuation of a project developed in collaboration with the United Nations Environment Programme (UNEP). The 2020 report was put together by the UN, the Stockholm Environment Institute, the International Institute for Sustainable Development, the Overseas Development Institute and the climate think tank E3G.
The purpose of the report, which is modelled after and alongside UNEP’s Emissions Gap Reports is to synthesize and communicate “the large discrepancy between countries’ planned fossil fuel production and the global production levels necessary to limit warming to 1.5°C and 2°C.” And, as it turns out, that discrepancy is still quite large, even after the COVID-19 pandemic took a huge bite out of fossil fuel demand and the oil and gas industry as a whole.
Related: UAE Oil Is A Vital Geopolitical Weapon Against China's Middle East Expansion
The report calculates the emissions that will be released from fuel combustion over the next calendar year based on projections and extrapolations of all the countries of the worlds’ planned and estimated fossil fuel extraction. The prognosis is grim. While meeting the Paris climate accord goal of limiting and maintaining long-term global warming to just 1.5° Celsius over pre-industrial temperature averages would require the global community to reduce fossil fuel production by a full 6 percent each year over the course of the next decade, right now most countries are reaching toward a reduction goal of just 2 percent--less than half of what is needed. Despite the fact that all 196 members of the United Nations Framework Convention on Climate Change (UNFCCC) signed onto the Paris Agreement, according to the 2020 Production Gap report, "countries are instead planning and projecting an average annual increase of 2 percent, which by 2030 would result in more than double the production consistent with the 1.5°C limit."
While the world is heading in the right direction overall to bring down greenhouse gas emissions on the eve of catastrophic climate change, it simply isn’t doing so with enough urgency. For example, while coal has had an especially rough year and seems to be on its very last legs as an industry, it would need to see a whopping 11 percent production cut every year until 2030 to comply with the 1.5°C pathway. It’s hard to see that happening when countries like China are falling back on coal in times of economic and energy insecurity.
Similarly, while OPEC+ is mulling over the idea of extending production cuts to keep oil prices afloat during this extended oil demand downturn, it would be shortsighted and naive to think that means the end of oil is upon us. While we may very well be living in the era of peak oil, that is a far cry from seeing a 6 percent annual decrease of the fuel that still overwhelmingly powers the global economy.
Ultimately, in spite of all the lofty rhetoric, “the pandemic-related production declines this year won't lead to the long-term changes needed to get on track toward those temperature targets.” For that we need human intervention and intentional economic and political restructuring, not just viral disruption.
By Haley Zaremba for Oilprice.com
More Top Reads From Oilprice.com:
- A Major Oil Rally Could Be On The Horizon
- Oil Majors Are Paying The Price For Investing In Renewables
- Japan And Kuwait Strike Major Oil Storage Deal
Like the article says, climate change is a grave risk. Our measurement data shows that the climate has warmed 1C over the century. There is scientific consensus that a significant part of this is caused by CO2 emissions, and that is very likely to continue. There is no scientific consensus about consequences, estimates range from benign to catastrophic. So we are playing with fire, and have no idea of the consequences. (ref MIT climate sciences).
To achieve stated goals in a few decades we would need to globally enforce policies which are not acceptable for the most, like moving people to live in small apartments in temperate climates, limit private car ownership to very wealthy, end flying, eat lower in the food chain, etc. I think that is not going to happen. On the other hand, slow transfer to renewables has started, it is likely that new technologies will be found to solve current issues, and thinks will proceed in the cleaner direction. In the long run, the end of oil is simply inevitable, though I doubt that anyone living today will see a close to the carbon-neutral world.
Green companies and certain social media are refuting this because they have more expertise and this can be done by 2030. It cannot happen not when you are expecting 2-3% demand increases per year around and yet instead of working with oil and gas to make these changes, these media companies are telling Banks and Wall street that oil companies will disappear by the year 2030, so this is not working to achieve a common goal these are scare tactics, that are causing companies problems with their financing. I hope brownouts in 2030 hit green companies and journalists first, so that maybe they will do the proper research and report the facts
California was telling the world that they would get rid of all of their gas plants 5 years ago, but now they are telling them, they cannot shut these down or there will be even more brown outs. Had they not shut down other plants over the the last 3 years, they would not be having any brownouts now, but the media and the green companies knew much more.
This is not rocket science, but the world took 150 years to start using oil and gas, and your experts tell them they can switch to renewables if they start in 2020 and by 2030 everything will be green. Perhaps Pot smoking is being utilized a bit to much in the U. S., as any expert could have told you, this is going to take years. I guess maybe now we can all work together.
A few days ago, she was repeating the sentiments of a clique of analysts, investment banks, militant environmental activists and hydrocarbon divestment campaigners about the so-called approaching peak oil demand projected by them to occur between 2028 and 2035. Now she is telling us why the world can’t quit fossil fuels and also about the large discrepancy between countries’ planned fossil fuel production and the global production levels necessary to limit warming to 1.5°C and 2°C.
It transpires that to achieve that goal would require the global community to reduce fossil fuel production by a full 6% each year over the course of the next decade at a time when global demand for fossil fuels is rising at an average annualized rate of almost 1.7%.
While coal is headed towards its own demise, crude oil and gas are going from strength to strength. Trust me when I tell you that the notions of post-oil era, approaching peak oil, zero emissions, imminent global energy transition to renewables are not only illusions but also fads.
Oil and gas will continue to be the core business of the global oil industry and the fulcrum of the global economy throughout the 21st century and probably far beyond.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
The 17 Sustainable Development Goals for 2030 ought to become a project that enables all grassroots groups and independent research organizations to team up to make the most of comparative economic advantage and economies of scale to really allow the best carbonless energy sources to take off, including Gen 4 nuclear.
If we want to fear climate change then it is the cold we should be afraid of. The Earth has spent almost all of the last few million year in the deep freeze with glaciers destroying life and covering much of the world. There have been a few short interglacial periods (such as the current one) when it got a bit warmer, but generally it has been devastatingly cold. Bizarre that so many people seem to want more cold!