New study on “unburnable oil”: Arctic oil and tar sands must stay in the ground

Keith Stewart

The January 2014 edition of the well-respected academic journal Energy Policy will include a study entitled “Un-burnable oil: An examination of oil resource utilization in a decarbonized energy system”.

The study looks at what the idea of a carbon budget means for individual oil reserves like Arctic oil or the Canadian tar sands. You can read an advance copy of the article on-line, but the authors (Christophe McGlade and Paul Ekins) helpfully summarize their findings in the following way:

We examine volumes of oil that cannot be used up to 2035 in a low CO2 energy system.
500–600 billion barrels of current 2P reserves remain unused.
At least 40–55% of yet to be found deepwater resources must not be developed.
Arctic oil and most light tight oil resources remain undeveloped.
Unconventional oil production is generally incompatible with a low CO2 energy system.

The authors look at two scenarios: one where there is widespread adoption of carbon capture and storage (CCS) technology and one where there is not (acknowledging that the latter is much more likely). They then break out global oil reserves into various categories and conclude, with respect to Arctic oil, that:

“Arctic oil played only a very minor role in the scenario with CCS, and no role at all when CCS was not allowed. These results suggest that the development of Arctic regions is largely inconsistent with an evens chance of limiting average global temperature change to 2 °C and that it may be reasonable to classify Arctic resources as ‘un-burnable’; this therefore calls into question the rationale for ongoing exploration efforts in Arctic regions, if stated commitments to emission reduction are to be taken seriously.”

Canada Case Study

The authors take a detailed look at two countries: the UK and Canada. With respect to the tar sands (the vast majority of Canada’s proven reserves of oil), they conclude that it could theoretically play a role in the transition to a low-carbon world if the natural gas currently used to steam the oil out of the ground and refine the bitumen were replaced by 100% biomass and the greenhouse gas emissions from the biomass were captured and stored underground (resulting in negative greenhouse gas emissions). But the authors note that this would be fantastically expensive and even if technically possible (and there are lots of questions around the climate and other ecological impacts of large-scale biomass), it would likely price the oil out of the market.

In the (much more likely) scenario where there are only modest reductions in greenhouse gas emissions from extracting and processing tar sands, the authors state that in Canada “no new bitumen projects come online” if we are on a pathway to keeping warming below 2 degrees C,  though existing projects would continue to operate.

This graph from McGlade and Ekins article on “Un-burnable Oil” shows future oil production in Canada in a low-carbon scenario without CCS.

More generally, they conclude that “the widespread development of unconventional oil resources is incompatible with a decarbonised energy system.”

Carbon budgets

unburnable-oil-productionThis article very usefully explores the implications of carbon budgets for specific oil reserves.

The concept of a carbon budget was popularized by Bill McKibben in his July 2012 Rolling Stone article Global Warming’s Terrifying New Math and subsequent “Do the Math” speaking tour. It was then echoed in the International Energy Agency’s 2012 World Energy Outlook, which stated that “No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal.”  And more recently, the Intergovernmental Panel on Climate Change included the idea of a carbon budget in their 2013 survey of climate science.

Carbon budgets have also spread into the business community, thanks to Carbon Tracker’s landmark report on the “carbon bubble” (i.e. fossil fuel companies are overvalued because concerns over climate change could lead governments to mandate energy companies to keep a significant portion of their oil, gas and coal reserves “stranded” in the ground). Bloomberg even developed a “carbon risk valuation tool” for investors that measures the exposure of individual companies to the carbon bubble.

Now we just need Canada’s federal government to take a look at the research on carbon budgets and wrap their heads around living within our (carbon) means before we end up struck trying to export dirty oil into a world that has moved on to clean energy.


Courtesy Green Peace

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