Known oil, gas and coal reserves may already contain a quarter more carbon than mankind can emit and still avoid dangerous climate change, putting the value of new oil exploration in doubt, a former oil major executive has said.
Reiterating a line put forward by environmental groups for over a decade, Jan-Peter Onstwedder, formerly BP’s most senior risk manager, said the oil industry may be wasting $50 billion annually searching for new fields.
He calculated potential carbon emissions from proven oil, gas and coal reserves at around 700 billion tonnes, compared with about 500 billion tonnes which can be emitted this century and keep temperature increases within less dangerous bounds.
“It prompts the question where does more exploration fit, do we already have all the reserves we possibly need?” he said. “I don’t know whether they thought their strategy through.”
The oil majors have thought it through. As Steve Kretzmann, head of Oil Change International argues: “Unfortunately, the real reason why BP et. al. continue to search for more reserves has nothing to do with whether or not the climate can handle them, and everything to do with the fact that they are financially rewarded for keeping their reserves / replacement ratio up around 100%. Its an outdated financial measurement that is seriously at odds with sane climate policy – and it’s the single most important one that analysts look at.”
Right on the nail, Steve, right on the nail.