Unconventional oil and gas will fry climate: ExxonMobil report
ExxonMobil's influential global energy report, "The Outlook for Energy: A View to 2040", says that new technologies like fracking and tar sands are unlocking a gusher of oil and natural gas.
Our ability to extract new sources of fossilized carbon is growing even faster than we can burn them up. ExxonMobil reports that the amazing surge in "unconventional" sources of oil and natural gas is so great that humanity can continue to burn ever increasing amounts of fossil carbon for well over a century.
And that is exactly what they expect the world will do.
In contrast, they expect people to choose new renewable energy sources for less than a quarter of our new energy supply.
The result will be that renewable energy sources will continue to lose ground to fossil fuels through 2040 and beyond. The energy production gap between fossil fuels and renewable energy will grow 35% larger than it is today.
ExxonMobil's report paints a big, bright, beautiful picture of the future made possible by burning ever increasing amounts of fossil carbon. The pages of their report brim with happy people gazing at shimmering cell phones and jelly bean pretty charts.
Off the climate cliff
Unfortunately for most of humanity, all that extra fossil fuel burning also comes with one very big downside. If we do burn that much more fossil carbon the resulting climate pollution will crank the global thermostat up by 4OC. And that, scientists and global leaders say, will inflict climate misery on humanity for thousands of years.
ExxonMobil includes a colourful chart showing the surge in climate pollution that will result from burning all that extra oil and gas. They even provide the numerical data in a table at the end of the report.
What they don't talk about, however, is what all the climate pollution means for your future. They never mention how hot the planet will get or what changes that is expected to bring.
The missing chart
To find out what their expected levels of climate pollution will mean for us I turned to the International Energy Agency (IEA). The IEA publishes three climate pollution scenarios that will lead to global warming of +2OC, +4OC and +6OC respectively.
My chart below shows ExxonMobil's emissions projections in the context of the IEA's three global warming scenarios. Take a look:
As you can see, ExxonMobil's projections closely match the IEA pathway to a planet that is 4OC hotter.
Their projections also closely match BP's "most likely" projections made last year. It seems the economic energy models of the oil supermajors agree that humanity will continue to burn ever more fossil carbon instead of switching to cleaner energy sources to preserve a safe climate future.
Climate scientists say that the threshold for "dangerous" climate changes and tipping points is +2OC. The nations of the world, including Canada and the USA, have pledged to keep global warming below this dangerous +2OC threshold.
The World Bank says the +4OC world we are headed for will be "devastating" for humanity. Their own recent study calls such a future a "climate catastrophe" that "simply must not be allowed to occur" because "there is also no certainty that adaptation to a 4°C world is possible."
The U.N. Secretary-General Ban Ki-moon says climate changes at that level would pose an "existential challenge for the whole human race - our way of life, our plans for the future."
International Monetary Fund director stated bluntly that in a world that hot, "future generations will be roasted, toasted, fried and grilled."
Biz-as-usual will be even worse
Amazingly, ExxonMobil's emissions projections aren't a "business-as-usual" scenario.
They assume "that governments will continue to gradually adopt a wide variety of more stringent policies to help stem GHG emissions." This includes a carbon price rising to $80 per tonne of CO2 (tCO2) in OECD nations, like Canada and the USA.
A carbon price of $80 is much too low to prevent climate disaster according to ExxonMobil. And yet it is also far above what we have the political will for so far.
BC, Alberta and Canada
For example, here in BC we have one of the highest carbon prices in the world at $30 per tCO2. We would need to increase that $2 every year for twenty five years in a row to get to $80 by 2040. But the political will to increase it has evaporated. The current Clark government has declared a multi-year freeze on it.
As ExxonMobil's economic and energy modelling shows, $80 per tCO2 isn't a lot. Raising the BC Carbon Tax to $80 will increase gasoline prices by 9%. Gasoline prices in BC have increased ten times more than that in just the last few years. Over in the UK, gas taxes are 80 cents higher per litre than in BC. The BC Carbon Tax would need to rocket beyond $350 per tCO2 before our gasoline prices matched what the English already pay today.
These examples show why carbon prices will need to be higher than $80 to ensure a safe climate future.
Meanwhile, Alberta next door charged a carbon price of less than $1 per tonne of CO2 in their province last year. (Math: $160m paid in emissions compliance divided by 210m tCO2 from fossil fuel burning = $0.76 per tCO2).
Environment Canada projects that Alberta's extremely low carbon pricing will result in such a huge surge in climate pollution that the province will single-handedly wipe out all the climate cuts in all the rest of Canada.
Despite clear warning that their weak policies are leading to national failure, Alberta has never raised their carbon price. Even discussing charging more than their current $1 per tCO2 in the future is proving to be politically toxic.
At the national level, the Harper government has vilified carbon pricing for years as a socialist scheme that will destroy the economy. Recently, Prime Minister Stephen Harper announced that his long-promised climate regulations for our oil and gas sector would be delayed yet again. This time "indefinitely".
ExxonMobil reaps benefit, shirks responsibility
ExxonMobil benefits from selling fossil fuels but appears to take no responsibility for any of the climate damage their products cause.
They sold over a trillion dollars in fossil fuel products in the last three years. Profits approached a billion dollars a week. And yet the responsibility they assume for the megatonnes of CO2 their products will cause is zero. Their report mirrors this benefit-responsibility disconnect. They spend many pages talking about the benefits of their products and not a single word about the climate consequences of using them.
Studies show that the disconnect between who benefits from fossil fuels and who takes responsibility for the resulting CO2 is growing ever wider in recent years. More than 60% of global economic benefit from fossil fuels is now out of sync with the UN's decades-old carbon accounting system for CO2 responsibility.
The UN accounting system puts all the CO2 responsibility onto the nations that burn fossil fuels. But nations also benefit from selling fossil fuels to others and from consuming products and services made elsewhere using fossil fuels. The explosion in global trade in fossil fuels, products and services means that assigning all the CO2 responsibility to those burning fossil fuels no longer accurately reflects who benefits. The accounting system is full of "carbon responsibility leakages".
If we are going to avoid the "climate catastrophe" ExxonMobil's own data shows we are headed for, everyone who benefits from fossil fuels will need to start shouldering some of the responsibility for the climate pollution. That needs to happen for moral, fairness and successful policy reasons.
The outlook for different energy sources
I'll wrap up with a brief look at how ExxonMobil expects the different energy sources to evolve...