In April, 2010, BP took the front page, and held it for months, as it struggled to plug the blowout on the bottom of the Gulf of Mexico that would cough up 3 or 4 million barrels.
The Deepwater Horizon disaster was a bitter reminder of the coming difficulties and risk involved in getting what is left of the world’s oil reserves up and out of places that are a lot harder to get at – deep sea, where pressures are extreme; the arctic, where conditions are even more challenging; tar sands, the poster child for too much carbon; and in thousands of small, disparate patches, where ‘tight oil’ comes from driving water, sand and a few chemicals into fissures miles underground. In the U.S., these wells average around 100 barrels a day (see chart below). Herding cats does not seem a likely way to make the U.S. the swing producer to knock Saudi Arabia off its perch. Related: The Front-Runners In Fusion Energy
Things got harder for explorers as 2014 came to an end, and the price of Brent, the international benchmark, was well on its way to a total 61 percent fall in under 12 months. The question is not so much whether the price of oil will be high enough to get the next trillion barrels out of the ground (roughly the current world rate of consumption for another 30 years); it is whether or not the climate can “afford” to have that happen. Peak oil, whether from insufficient supply or demand, makes for an interesting cocktail party discussion. It has even become a political litmus test. However, it is largely irrelevant. Sheik Yamani’s dictum, that the Stone Age did not end because we ran out of stones, should not be dismissed. Related: Oil Prices Responding Positively To Bad News, But Why?
BP, the abbreviation for British Petroleum (which was originally known as Anglo-Persian and then Anglo-Iranian Oil), ran a PR campaign for several years suggesting its initials stood for Beyond Petroleum. Though their green credentials ended up in a watery grave, they were on to something. Whether or not the collapse of Brent crude signals the beginning of the end for the age of oil, it is perhaps, in Winston Churchill’s phrase, “the end of the beginning” for their principal competitor, renewable energy. And that is a good thing, because we could be getting close to tripping over the upper limit of how much CO2 can be pumped into the atmosphere without triggering catastrophic climate change effects.
In April of this year, BP was in the headlines again, this time in conjunction with the growing movement to keep most of the next trillion barrels in the ground. “Investors holding $2 trillion in assets ask regulators to require transparency a day after 98% of BP shareholders demand similar information.” Much heat, less light, has been generated during the past year or so concerning the ‘imperative’ that most of the remaining fossil fuels on earth (especially those still in the earth) stay put. Otherwise, it is argued, the atmosphere will heat up over 2o centigrade and millions of lives and billions of dollars’ worth of property will be threatened. Related: Forget Asia. US Natural Gas To Be Exported To Mexico
The 2 o C redline depends upon certain assumptions entered into computer models that deliver such prophecies. But the effects of climate change will take place along a spectrum of temperature scenarios. The 2 o C threshold is an arbitrary one agreed to for the purposes of policy, not for any particular scientific significance. Therefore debating the intricacies of the 2 o C target is not important. What is beyond doubt is that CO2 holds heat and more CO2 will hold more heat and the related effects will be expensive.
The purpose of this series of articles is to show that fossil fuels are not the only asset class that can be measured in the trillions of dollars now under threat from climate change.
By Henry Hewitt for Oilprice.com
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