Oil Change International

Exposing the true costs of fossil fuels

The Sky’s Limit: Unpacking the Climate Math

Four years ago, the concept of “unburnable carbon” hit the mainstream when Bill McKibben published “Global Warming’s Terrifying New Math” in Rolling Stone magazine, based off of work by the analysts at Carbon Tracker and before that Greenpeace. The research underlying that concept showed that the carbon embedded in proven fossil fuel reserves on the books of fossil fuel companies is many times greater than what climate scientists have determined the atmosphere can withstand in a safe climate scenario. This month, new analysis by Oil Change International updated that math, took it further, and is making waves.

In the new report, entitled “The Sky’s Limit: Why the Paris Climate Goals Require a Managed Decline of Fossil Fuel Production,” we’ve identified a stark reality when it comes to fossil fuel development and the climate: Existing fossil fuel production, if allowed to run its course, would take us beyond the globally agreed goals of limiting warming to well below 2?C and aiming towards 1.5?C.

For the first time ever, this study utilized data from industry databases (e.g. Rystad Energy UCube) to catalog the fossil fuels that exist in current mines and wells — those sites where investments have been made and development is already underway — and compared it to carbon budgets associated with a two-in-three chance of staying below 2?C, or even chances of limiting warming to 1.5?C, backed by data from the Intergovernmental Panel on Climate Change (IPCC).

Our research found that the carbon budgets will be exhausted with current development, and in fact some currently-operating fossil fuel projects will need to be retired early in order to have appropriately high chances of staying below even the 2?C limit. Further, to meet a 1.5?C goal, the existing oil and gas wells currently in production have enough fuels in them to fill the budget, even if coal were phased out tomorrow.

This analysis is already sending shockwaves through the climate movement and being echoed by influential thought leaders around the globe. More than a dozen organizations, ranging from smaller groups like the Health of Mother Earth Foundation in Nigeria to larger groups such as 350.org and Christian Aid, joined in to release the report. Climate scientists and energy analysts have expressed agreement with the findings since the release, and countless organizations and prominent individuals have joined the choir to spread the word about the report.

As George Monbiot writes in The Guardian, the report presents three scenarios for moving forward:

First: a gradual, managed decline of existing production and its replacement with renewable energy and low-carbon infrastructure, which offer great potential for employment. Second: allowing fossil fuel production to continue at current rates for a while longer, followed by a sudden and severe termination of the sector, with dire consequences for both jobs and economies. Third: continuing to produce fossil fuels as we do today, followed by climate breakdown.

The good news, as highlighted in our report, is that if the right investments of political will and financing are made, a just transition to renewable energy is definitely possible in the timeframe necessary. Renewable energy is expanding at ever-increasing rates, becoming cheaper by the day, and could be poised to follow the path to universality seen by recent technologies such as the personal computer and cell phone. The report lays out a number of studies that show renewable energy can absolutely fill in the energy gap as fossil fuels are phased out.

Many have already called the report “the math behind the Keep It In The Ground movement,” and, with any luck, just as unburnable carbon entered the public consciousness four years ago, the climate imperative of ending new fossil fuel development may do the same.

Comments (1)

  1. (From my blog, links not functioning here)

    This post will discuss the report “The Sky’s Limit” written by Greg Muttitt and other people working at the Oil Change International think tank in Washington.

    The basic message of this report is: Stop all new development of fossil fuel reserves. Those already in production are enough to blow through our carbon budget.

    Or, in less words: When in a hole, stop digging.

    Obviously, I support this. It is just as obvious as would be the idea (not proposed in the report) of not relying on fossil fuel reserves mined on Mars for the future.

    The problem is, the people who decide on investing in exploration and development of new fossil fuel reserves are not all employed at Oil Change International.

    The report does not address why someone in charge for oil exploration at Exxon or in Saudi Arabia would want to follow their advice.

    That’s where Phaseout Profit Theory comes in.

    The report correctly states on page 36:

    Simply restricting supply alone would lead to increased prices (…)

    Exactly. And that would be good news for the owners of the already developed reserves. It they like higher prices and higher profits, might they be inclined to listen to this report?

    Imagine fossil fuel interests coming together and declaring that they are even considering a ten year moratorium on new oil exploration and development.

    Is there any way that just announcing such a conference doesn’t immediately double oil prices?

    The owners of oil reserves can’t cling to their business model infinitely anyway. Humanity burns through 5.3 million years of fossil fuel reserves each year, which is not sustainable in the long term even if rising CO2 levels in the atmosphere was a good thing (it’s not).

    At some point, fossil fuel supply needs to go down anyway.

    If you are an owner of such reserves, your interest should be to make sure that supply goes down faster than demand, increasing prices and profits.

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