Oil in the soil, coal in the hole

 Over 80% of coal, 50% of gas and 30% of oil reserves will need to stay in the ground if dangerous global warming is to be avoided under the goal to limit global warming to no more than 2C, say scientists. Research, published in Nature journal, also rules out drilling in the Arctic. Carbon capture and storage would have only "a relatively modest effect" on how much fossil fuels can be used because of its expense and late introduction, the scientists added.

"Policy makers must realise that their instincts to completely use the fossil fuels within their countries are wholly incompatible with their commitments to the 2C goal." said lead researcher Dr Christophe McGlade, of the UCL Institute for Sustainable Resources. Currently, the world is heading for a catastrophic 5C of warming and the deadline to seal a global climate deal comes in December at a crunch UN summit in Paris.

The Middle East would need to leave about 40% of its oil and 60% of its gas underground. The majority of the huge coal reserves in China, India, Russia and the United States would have to remain unused. Undeveloped resources of unconventional gas, such as shale gas, would be off limits in Africa and the Middle East, and very little could be exploited in India and China. Unconventional oil, such as Canada's tar sands, would be unviable.

The research also raises questions for fossil fuel companies about investment in future exploration. "We shouldn't waste a lot of money trying to find fossil fuels which we think are going to be more expensive," co-researcher Prof Paul Ekins told the BBC. "That almost certainly includes Arctic resources. It will certainly include a lot of the shale gas resources in Europe, which have not really been explored or exploited at all." 

Rob Bailey, research director for energy, environment and resources at Chatham House, said the finding that half of natural gas reserves must remain untapped will make uncomfortable reading for governments seeking to replicate the US shale revolution and displace dirtier coal. "The recently heralded golden age of gas will be short lived if we are to avoid dangerous climate change," he said.

Emma Pinchbeck, WWF-UK's head of energy and climate change policy, said the study showed "yet apocalypticagain that the majority of the world's fossil fuel reserves, and coal in particular, must stay in the ground to stay within two degrees of warming".

The new study reveals the profound geopolitical and economic implications of tackling global warming for both countries and major companies that are reliant on fossil fuel wealth. It shows trillions of dollars of known and extractable coal, oil and gas cannot be exploited. Major fossil fuel companies face the risk that significant parts of their reserves will become worthless, with Anglo American, BHP Billiton and Exxaro owning huge coal reserves and Lukoil, Exxon Mobil, BP, Gazprom and Chevron owning massive oil and gas reserves. Exxon alone spends $100m A DAY on exploration.

Financial experts, including the Bank of England and Goldman Sachs, have begun taking seriously the risk that expensive fossil fuel projects will be rendered worthless by future climate action. James Leaton, research director at the Carbon Tracker Initiative (CTI) said: “Investors are already using the detailed CTI cost curves to start identifying how low demand and price scenarios could play out.” 

The research also highlights the contradiction of governments seeking to maximise their nation’s fossil fuel extraction, as in the UK, while simultaneously pledging to limit global warming to 2C. Michael Jakob, a climate change economist at the Mercator Research Institute on Global Commons and Climate Change in Berlin. “If you really want to convince developing countries to leave their coal in the ground, you have to offer something else and I don’t think the Saudis will leave that oil in the ground if they get nothing for it,” he said, citing green technology including CCS, as well as financial compensation. Jakob said the challenge was enormous, but that it provided benefits as well as costs: “There are huge sums at stake, but not just on the losers’ side but also on the winners’ side. Some assets will lose value, but others will gain value, like solar and wind power and land for biomass production.”

The new analysis calls into question the gigantic sums of private and government investment being ploughed into exploration for new fossil fuel reserves, according to UCL’s Professor Paul Ekins, who conducted the research with McGlade. “In 2013, fossil fuel companies spent some $670bn (£443bn) on exploring for new oil and gas resources. One might ask why they are doing this when there is more in the ground than we can afford to burn,” he said. “The investors in those companies might feel that money is better spent either developing low-carbon energy sources or being returned to investors as dividends,” said Ekins.

“One lesson of this work is unmistakably obvious: when you’re in a hole, stop digging,” said Bill McKibben, co-founder of 350.org which is campaigning to get investors to dump their fossil fuel stocks. “These numbers show that unconventional and ‘extreme’ fossil fuel – Canada’s tar sands, for instance – simply have to stay in the ground. Given these numbers, it makes literally no sense for the industry to go hunting for more fossil fuel,” McKibben said. “We’ve binged to the edge of our own destruction. The last thing we need now is to find a few more liquor stores to loot.”

The only sensible response to such findings is a global agreement to leave these unburnable fossil fuels in the ground. But it’s not just that no such agreement exists, no such agreement has ever been mooted. There has not been a single proposal, debate or even position paper on limiting fossil fuel production put forward during international climate negotiations. Almost all nations pay lip service to the idea of minimising greenhouse gas emissions yet all if the stuff keeps coming out of the ground, it will be burnt, without regard to the feeble policies seeking to limit its consumption. For years, governments have been wasting precious time by pursuing unworkable solutions. Despite the validity of the science and the sincerity of those reformers, to expect that capitalism will no longer support the goose that lays their golden eggs is far, far more an utopian expectation than the supposed unachievable hope of the socialist solution to the problem. Capitalists would rather see the planet burn than give up the chance to make money. The energy companies manipulate the media and feed uncertainty around the impact of CO2 on global warming. Any real action is at best delayed and at worst completely shelved while their paid for politicians play Russian roulette with the lives of all of humanity.

Capitalism offers us two choices: cataclysmic bad or apocalyptic bad.

 Only socialism can fully ascribe and abide with the Great Law of the Iroquois:

“In all of your deliberations in the Confederate Council, in your efforts at law making, in all your official acts, self-interest shall be cast into oblivion. Cast not over your shoulder behind you the warnings of the nephews and nieces should they chide you for any error or wrong you may do, but return to the way of the Great Law which is just and right. Look and listen for the welfare of the whole people and have always in view not only the present but also the coming generations, even those whose faces are yet beneath the surface of the ground – the unborn of the future Nation.”