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New fossil fuels ‘incompatible’ with 1.5C goal, comprehensive analysis finds

A new analysis says developing new oil and gas fields is “incompatible” with the 1.5C aim.

The International Institute for Sustainable Development (IISD) reviewed all “feasible” pathways to 1.5C.

They support the International Energy Agency (IEAclaim )’s that “no new oil and gas fields permitted for development in our [1.5C] route”.

After Russia invaded Ukraine, the revelation comes amid an energy security rush. Countries like the UK have been relying on fossil fuels for energy.

According to the IISD and IEA, rapidly increasing technologies like wind and solar would preclude additional oil and gas exploitation. Current investment in these technologies is not enough to keep below 1.5C.

The IISD estimates redirecting $570bn of annual anticipated new oil and gas investments could “completely support” 1.5C wind and solar expansion.

Case study

Today’s research guides governments, investors, and enterprises towards the Paris Agreement’s 1.5C goal. Using integrated assessment models, it reviews “pathways” that restrict warming to 1.5C. (IAMs).

The paper details fossil fuel investment ramifications. This goes beyond the current IPCC report on climate change solutions.

The IPCC called “greatly decreased” fossil fuel consumption “essential” to preventing warming. It cautioned that existing fossil fuel infrastructure might exceed the 1.5C limit.

The IPCC did not endorse an earlier IEA study that stated: “Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our [1.5C] pathway.”

The IEA finding was widely covered and still cited. However, some firms and governments have continued to dodge the conclusions.

These actions minimise the fossil fuel industry’s 1.5C impact. They exploit climate action pathway caveats in computer models.

These pathways need assumptions about the Earth’s climate, population, economic development, and technology.

Modeling groups make different assumptions. Additionally, numerous paths lead to a goal. Thus, route discoveries are questionable.

Today’s research shows that the IEA was not an aberration, reducing doubt. “Developing…new oil and gas fields is incompatible with lowering warming to 1.5C,” it argues.

Possible routes

The report examines all “realistic” ways to keep below 1.5C. These routes are examined for new oil and gas expansion.

It analyses IPCC, IEA, IRENA, and BP routes.

The report uses the 97 IPCC “C1” scenarios that restrict warming to 1.5C with “no or limited overshoot.”

These scenarios are compared to IPCC “feasibility” thresholds. The IPCC expressed “medium degrees of worry” about carbon capture and storage capturing more than 3bn tonnes of CO2 per year (CCS).

The review excludes scenarios that surpass the “medium” feasibility thresholds for scaling up fossil fuel CCS, BECCS, and afforestation or reforestation. 26 IPCC strategies can reduce warming to 1.5C.

Lead author Olivier Bois von Kursk tells Carbon Brief that the IISD did not filter for wind and solar scale up, energy efficiency, or institutional impediments.

In the median IPCC 1.5C scenario, oil and gas combustion emits CO2. IEA’s 1.5C approach (“NZE,” purple) is contrasted.

In the IEA and IPCC scenarios, oil and gas emissions drop 15% and 29% by 2030. By 2050, they fall by 65% and 68%, respectively.

Next, compare these paths with predicted emissions from burning oil and gas from current fields (dark grey region below) and those under construction (light grey).

If the world pursues a 1.5C trajectory, these existing and under-development reserves can satisfy oil and gas demand. Thus, oil and gas from developing new fields (pink) or exploring permitted reserves would not fit (red).

Billion-tonne annual CO2 emissions from oil and gas burning. Shaded areas: Emissions projected from oil and gas in existing fields (dark grey), under development (light grey), new fields (pink), and new exploration of licenced reserves (red). Lines: Emissions under the median of viable IPCC 1.5C pathways (blue) and the IEA’s 1.5C scenario (NZE, purple). IISD.

Global CO2 emissions from burning oil and gas, billions of tonnes per year.
The IISD report examines 1.5C paths from IRENA, BP, BloombergNEF, DNV, Navigant, and the University of Technology Sydney.The graphic below shows these channels as coloured lines versus shaded areas for emissions from existing and new oil and gas fields. The chart contains IPCC scenarios “IMP-REN” and “IMP-LD”.

CO2 emissions from burning oil and gas, billions of tonnes per year.

Again, production from existing or developing areas meets demand in most 1.5C scenarios.

BP’s route increases oil and gas demand over existing fields’ output. Bois von Kursk notes that 2050 oil and gas use falls below present field output. He warns that short-term demand-meeting developments risk becoming “stranded assets” later.

Beware 

Oil/Gas rig under construction, Grand Harbour, Valletta, Malta.
Grand Harbour, Valletta, Malta, oil/gas rig building. John McKenna/Alamy Stock Photo.

“Stranded assets” illustrates a problem with using model scenarios to make decisions. It also notes report limitations.

Model paths often minimise costs or maximise economic “welfare”. Assumptions include fossil fuel and technological pricing. Models also presume rational action and “perfect foresight” over the best approach to the goal.

Example: Translating model results into real-world implications is difficult. The 1.5C objective would not be affected if the world built hundreds of new coal power plants tomorrow but never turned them on.

Beyond construction, coal plants would not create electricity or emissions. It would have cost a lot and left coal plants stranded.

However, the plant builders may exert political pressure to ensure they can operate them financially. This might “lock in” fossil fuel emissions. Climate and economy models cannot capture these processes.

The IISD analysis says new oil and gas fields are “incompatible” with 1.5C. The study states this is incorrect.

If ageing fields are retired early, new oil and gas may be 1.5C-compatible, according to the IISD report. However, Bois von Kursk tells Carbon Brief this is rare:

“Early shutdown of fields already in production is highly rare and we don’t see it happening unless fields with significant extraction costs become uneconomical. To avoid stranded assets or busting the 1.5C carbon budget, we recommend stopping new fields from developing. Fields nearly never close before their economic lifetime.

Unless alternative energy sources can fulfil expanding global demand, further oil and gas development will be needed.

Wind and solar are not expanding fast enough for 1.5C, the paper states. To catch up, the IEA recommended tripling low-carbon energy investment.

By 2030, the IISD predicts a $450bn yearly wind and solar investment gap between anticipated growth and 1.5C. The research also predicts $570bn in new oil and gas sector development by 2030. It argues redirecting oil and gas funding would “completely finance” wind and solar scaling.

Does 1.5C require ceasing the development of new fossil fuel sources, or can alternative energy sources replace them?

In a recent Energy Transition Show podcast, Christophe McGlade, head of the IEA energy supply unit, addressed this critical point. Models cannot answer.

Political issues instead. Academics, activists, and some governments are taking on fossil fuel supplies.

However, Chinese president Xi Jinping has often stated that “build[ing] the new before discarding the old” is a must for fossil fuel phasing out.

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