Carbon Levels and Measurement
The International Renewable Energy Agency (IRENA) sees little future for Canada’s tar sands/oil sands by mid-century, according to the National Observer’s analysis of the Dubai-based agency’s latest forecast of global energy supply and its transition away from carbon.
According to IRENA and the International Energy Agency, which collaborated on the report, the world will need to invest 0.4% of global GDP through 2050 if it wishes to stabilize climate change at less than 2ºC above pre-industrial levels. As the Observer’s Mike De Souza reports, the $29-trillion effort would see governments “‘immediately and comprehensively’ deploy new policies to avoid stranded investments in fossil fuel infrastructure, which could include expensive oil and gas projects or new pipelines that would not be needed in the future.”
IRENA’s report singled out Canada, along with India, Turkey, and the United States, for their unambitious climate plans.
The agency’s outlook anticipates that “by 2050, nearly 95% of electricity would be low-carbon, 70% of new cars would be electric, the entire existing building stock would have been retrofitted, and the CO2 intensity of the industrial sector would be 80% lower than today.” Oil demand would be less than of half today’s level, with the most expensive-to-produce resources “no longer exploited.” Separately, Bloomberg calculates that IRENA’s outlook could force fossil energy producers to abandon reserves currently valued at $10 trillion.
“Such a scenario,” De Souza writes, “could translate into economic trouble for Canada’s oil-rich province of Alberta, which has the planet’s third-largest reserves of crude oil, but some of the highest production costs.”
In what may be bellwethers of the industry’s future, he observes, “in recent months several multinational oil companies, including Royal Dutch Shell, Total, and Statoil have cashed out their investments in Alberta’s oilsands.”
Alberta will run a C$10.3-billion deficit in 2017-18 and depend on steadily increasing oil prices to eventually balance the books, under the provincial budget released last Thursday by Finance Minister Joe Ceci.
“To no one’s surprise, Alberta did not slay the deficit dragon in its most recent budget. Or even introduce new weaponry for deficit slaying, or offer any new solutions to the problem,” CBC reports. “Instead, the red ink has spread and the hope seems to be that black gold will one day wash it away. Alberta is leaning on its old standby—oil.”
Media, economists, and opposition critics all described the release as a “fingers-crossed” budget that “promises a hospital, new schools, and more money for seniors and social services,” Canadian Press notes, but relies on a commodity price that any jurisdiction can try to predict, but no jurisdiction can control.
“There are no plans to balance outside of oil prices,” University of Calgary economist Ron Kneebone told CBC. “The only way out of it is to hope that oil prices come back to the 80, 90-dollar level, which no one seems to be expecting any time soon.”
UC economist Trevor Tombe added that if oil prices stabilize in their current range of about US$50 per barrel, Alberta can expect an indefinite run of $10-billion annual deficits. Ceci is projecting a balanced budget as of 2023/24, CBC reports, “as the economy recovers and economic diversification takes hold. As well, the province is optimistic about what new pipeline capacity will mean for corporate and government revenue.”
But that depends on oil prices hitting $68 per barrel by 2020. On Friday, Todd Hirsch, chief economist at the provincially-owned ATB Financial, said he foresaw oil stabilizing at $55 per barrel, not a high enough price to restore the Alberta energy sector’s previous trajectory.
“It kind of shifts it now to a lower gear, and it takes on a different role for the economy,” he told the Conference Board of Canada’s Western Outlook 2017 conference. “$50 to $55 stabilizes the industry, the petroleum sector becomes a stable backbone of the economy, but not the growth engine.”
At (virtual) press time, benchmark West Texas Intermediate crude stood at US$48.78 per barrel.
The province is also projecting that conventional oil and gas production will shrink in the years ahead, while tar sands/oil sands output grows 32%, from just under 2.5 million barrels per day this fiscal year to 3.3 million in 2019-20. That’s in spite of projections last month that the province will blow through its vaunted cap on tar sands/oil sands emissions by 2026.
“We are laying the foundation for a return to economic growth,” Ceci said. “Are we out of the woods? No. We will continue to bring the deficit down, to balance thoughtfully and prudently, and we will do so without sacrificing the supports and services families need.”
The province “is investing heavily in tax credits and other financial incentives to diversify the economy and get off what it calls the ‘oil and gas roller coaster,’” CP notes. “A new carbon tax, launched in January, is expected to bring in $5.4 billion over the next three years, to be reinvested in green projects from energy-efficient light bulbs for homeowners to new rapid transit lines.”
CBC tracks 28% of the carbon levy revenue going back to households in rebates, 24% to green infrastructure, 19% to grants to renewable energy and cleantech companies, and 11% to energy efficiency.
The global growth rate for renewable energy must double and total investment will have to hit $29 trillion by mid-century to cut energy-related carbon dioxide emissions 70% by 2050 and phase them out by 2060. But the target is achievable and its economic impact is “net positive”, according to research released in Berlin this morning by the International Renewable Energy Agency (IRENA).
The report appears just days after the International Energy Agency announced that the world’s energy-related CO2 emissions held steady last year for the third year in a row, with China and the U.S. showing reductions and European emissions holding steady. But IRENA says that’s just a start.
“The economic case for the energy transition has never been stronger,” IRENA Director-General Adnan Z. Amin said in a release. “Today around the world, new renewable power plants are being built that will generate electricity for less cost than fossil fuel power plants. And through 2050, the decarbonization can fuel sustainable economic growth and create more new jobs in renewables.”
The net result is that “we are in a good position to transform the global energy system, but success will depend on urgent action,” he said.
In its release, IRENA notes that the $29-trillion price tag for the energy transition envisions would equal 0.4% of global GDP through 2050. Combined with other pro-growth policies, the agency says the off-carbon transition will expand the global economy by 0.8% in 2050, produce more than enough jobs to offset those lost in the fossil industries, and “improve human welfare through important additional environmental and health benefits thanks to reduced air pollution.”
IRENA’s energy transition roadmap, REmap, shows “significant energy efficiency improvements” keeping global demand at about 2015 levels in 2050. “The supply mix, however, would change substantially, with the share of renewables in total primary energy supply reaching two-thirds by 2050,” the agency states.
IRENA adds that “subsidies that sustain ageing conventional energy industries should be abandoned in order to level the playing field. Modern energy access, fair competition, and sustainable development need to underpin energy policy-making.”
Atmospheric concentrations of the most prevalent climate-altering greenhouse gas set an ominous double record in 2016, according to the U.S. National Oceanic and Atmospheric Administration (NOAA), reporting benchmark measurements from its Mauna Loa Observatory in Hawaii.
Carbon dioxide levels at Mauna Loa rose by 3 parts per million in 2016 and reached 405.1 ppm, matching “the record jump observed in 2015,” the agency reports in a release. “The two-year, 6-ppm surge in the greenhouse gas between 2015 and 2017 is unprecedented in the observatory’s 59-year record.” 2016 also marked a record fifth consecutive year in which the observatory recorded a 2 ppm or greater increase in atmospheric carbon dioxide, NOAA notes.
“The rate of CO2 growth over the last decade is 100 to 200 times faster than what the Earth experienced during the transition from the last Ice Age,” said Pieter Tans, lead scientist of NOAA’s Global Greenhouse Gas Reference Network. “This is a real shock to the atmosphere.”
Global average CO2 levels passed 400 ppm—a 43% increase over pre-industrial levels—two years ago. They previously hovered around 280 ppm for about 10,000 years until humanity began burning coal in volume at the start of the Industrial Revolution, around 1760. By last month, the level at Mauna Loa had climbed above 406.4 ppm.
As global temperatures spike, U.S. public concern about climate change has also hit an all-time high, the Washington Post reports. A new Gallup survey found 68% who understand that climate change is caused by human activity, 62% who believe its effects are already apparent, and 45% who said they worry about climate change “a great deal”.
Those results “are up from a previous high in 2007, when a similar poll found that 41% of respondents worried greatly about climate change,” the Post notes. “Between then and now, American concern about global warming actually declined for four years and has only been on the rise again since 2011. Similarly, the percentage of Americans who believe climate change is already happening previously peaked at 61% in 2008 and then declined until 2011.”
The paper suggests Americans’ attention to climate change might rise and fall with their economic prospects. One study in 2011 “found that an increase in a state’s unemployment rate is associated with both a decreased likelihood that its residents believe climate change is occurring and reduced support for climate action.”
“Slumping and disintegrating” permafrost across a 135,000-square-kilometre (52,000-square-mile) stretch of the Canadian Arctic is disrupting local ecosystems and could soon lead to a huge new release of atmospheric carbon, according to a study published last month in the journal Geology.
“Things have really taken off. Climate warming is now making that happen. It’s exactly what we should expect with climate change,” said study lead Steven V. Kokelj of the Northwest Territories Geological Survey. “And the maps that we produced clearly indicated it’s not just a random pattern. We’re sort of connecting dots here for the scientific community.”
The study shows that permafrost collapse in the NWT “is intensifying and causing landslides into rivers and lakes that can choke off life downstream, all the way to where the rivers discharge into the Arctic Ocean,” InsideClimate News reports. “The study didn’t address the issue of greenhouse gas releases from thawing permafrost. But its findings could help quantify the immense global scale of the thawing, which will contribute to more accurate estimates of carbon emissions.”
The ICN story surveys other permafrost studies that point to similar impacts across the circumpolar north. The land has been frozen since the last ice age, 10,000 years ago. But now, “as the Arctic warms at twice the global rate, the long-frozen soils thaw and decompose, releasing the trapped greenhouse gases into the air. Scientists estimate that the world’s permafrost holds twice as much carbon as the atmosphere.”
Suzanne Tank, assistant professor of biological sciences at the University of Alberta, pointed to the ecological implications of the Canadian study. “The pulses of silt, mud, and gravel make streams murkier and limit growth of aquatic plants at the base of the food chain,” InsideClimate states. “Exactly how that affects other species, including fish, is the subject of ongoing research.”
Tank told ICN that “most of the carbon in the Canadian melting is being released quickly as coarse particles that aren’t converted to CO2 immediately,” writes reporter Bob Berwyn. “But separate research by Swedish scientists suggests that the soil particles are quickly converted to heat-trapping CO2 when they are swept into the sea.”
China is forecasting a fourth straight year of stable or declining carbon dioxide emissions, solidifying the country’s position as a global climate change leader as the new White House administration moves to slash U.S. climate programming.
The 2017 plan recently released by China’s National Energy Administration anticipates a 1% emissions cut, and shows a 1.3% reduction in coal consumption for 2016, according to analysis by Greenpeace East Asia.
“The encouraging news reinforces China’s growing status as a global climate leader, and sends a strong signal to U.S. President Trump that his dirty energy agenda will send the American economy in the wrong direction as the rest of the world moves forward,” Greenpeace declared yesterday in a media release.
“China is ploughing money into renewables and reining in its addiction to coal. As Trump’s rhetoric leaves the world in doubt over what his plan is to tackle climate change, China is being thrust into a leadership role,” said Global Policy Advisor Li Shuo.
“These trends give some hope that the global peak in emissions might well be within reach, but only if all major emitters break free from fossil fuels and reduce emissions.”
“While the Trump administration proposes huge cuts to federal climate change programs and vows to ‘cancel Paris’, the majority of the people in the United States want action on climate change,” added Greenpeace USA Executive Director Annie Leonard.
“Trump would know this basic fact if he listened to anyone but the last fossil fuel executive he dined with at Mar-a-Lago, or if he listened to facts at all. The United States Congress has to listen to what the people want and stop our delusional president from sabotaging global progress on the most urgent issue facing the human species.”
In a post on EcoWatch, meanwhile, NRDC International Program Director Jake Schmidt identifies China as one of six countries that are leading the global boom in renewable energy adoption. “
At the end of 2016, India “had installed 11 gigawatts of solar and 29 gigawatts of wind capacity, moving significantly closer to its goals of 100 gigawatts of solar and 75 gigawatts of wind by 2022,” he notes. Latin America, meanwhile, “has recently proven itself to be a regional powerhouse in clean energy.” Chile and Mexico set record-low prices in recent renewable energy auctions, he writes, while Chile, Brazil, and Uruguay placed among the top five developing countries for clean energy.
The maritime shipping industry is under the gun in Europe, where legislators have “lost patience” with its inaction on climate change and are now proposing to include the industry in the continent’s Emissions Trading System (ETS).
The EU has given the International Maritime Organization until 2023 to come up with its own emission controls, after decades of delays. If the IMO continues postponing action, the ETS provision will take effect.
“Ship owners are furious, claiming it is wrong that they will effectively be charged for carbon pollution in European Union waters ahead of any wider international arrangement,” Climate News Network reports. But that hasn’t stopped members of the European Parliament from endorsing a environment committee recommendation that shipping be included in the ETS’ carbon cap-and-trade system.
Maritime shipping produces about a gigatonne of carbon per year, accounting for 2.5% of global greenhouse gas emissions, and its output is on track to increase 50 to 250% by mid-century.
That projection “is not compatible with the internationally-agreed goal of keeping global temperature increase to below 2°C compared to pre-industrial levels, which requires worldwide emissions to be at least halved from 1990 levels by 2050,” the European Commission stated.
Ports and cargo owners supported the EU initiative, Brussels-based Transport & Environment reports. The International Chamber of Shipping’s director of policy and external relations, Simon Bennett, complained that “this vote for a unilateral, regional measure simply risks polarizing debate among IMO Member States, which have already agreed to develop a strategy for reducing shipping’s CO2 emissions” consistent with the 2015 Paris Agreement.
But T & E Aviation and Shipping Policy Director Bill Hemmings pointed to the IMO’s “bad track record of failing to act quickly”—dating back as far as the 1997 Kyoto Protocol, Climate News Net notes.
“This cross-party [European Parliament] proposal will end the anomaly of shipping being the only sector in Europe not contributing to the 2030 emissions reduction targets,” Hemmings said. “EU governments must follow Parliament’s lead and agree that ship CO2 emissions must go in the EU ETS if the IMO does not act. The benefits to our climate through less warming and to our industry and economy through lower fuel costs cannot be ignored.”
Converting wood pellets to electricity produces higher greenhouse gas emissions than coal, and related European subsidies for biomass fuel are in immediate need of review, according to a new study for Chatham House.
The biomass industry “rejected the report, saying that wood energy cuts carbon significantly compared to fossil fuels,” according to BBC.
The debate is important, because wood pellets supply about 65% of Europe’s green energy. “EU governments, under pressure to meet tough carbon-cutting targets, have been encouraging electricity producers to use more of this form of energy by providing substantial subsidies for biomass burning,” explains BBC environmental correspondent Matt McGrath. But “current regulations do not count the emissions from the burning of wood at all, assuming that they are balanced by the planting of new trees,” he adds, citing the Chatham House assessment.
“The fact that forests have grown over the previous 20 or 100 years means they are storing large amounts of carbon,” said report author Duncan Brack, a former special advisor at the UK Department of Energy and Climate Change. “You can’t pretend it doesn’t make an impact on the atmosphere if you cut them down and burn them.”
The assumption that bioenergy is carbon-neutral “misses out on some crucial issues, including the fact that young trees planted as replacements absorb and store less carbon than the ones that have been burned,” BBC adds, citing Brack. “Another major problem is that under UN climate rules, emissions from trees are only counted when they are harvested.”
Since Canada, the U.S., and Russia use a different method to account for carbon in the wood pellets they export to Europe, and the EU skips emissions from burning, “the carbon simply goes ‘missing,’” McGrath notes. The UK imported 7.5 million tonnes of pellets from Canada and the U.S. in 2015-16.
“This report confirms once again that cutting down trees and burning them as wood pellets in power plants is a disaster for climate policy, not a solution,” said David Carr, General Counsel of the U.S. Southern Environmental Law Center. “The process takes the carbon stored in the forest and puts it directly into the atmosphere via the smokestack at a time when carbon pollution reductions are sorely needed.”
“They are shooting themselves in the foot,” agreed Linde Zuidema of Fern, an environmental group based in Brussels. “They are not taking into account that increased harvesting of trees will actually have an impact on the role that forests play as a carbon sink.”
Dr. Nina Skorupska, CEO of the UK Renewable Energy Association, said the bioenergy supply chain cuts emissions 60 to 80% compared to fossil fuels. “That principle is at the heart of the industry,” she told BBC. “Biomass cuts carbon, supports forests, and delivers reliable renewable energy at a lower cost.”
Brack also took issue with the Intergovernmental Panel on Climate Change’s growing emphasis on bioenergy with carbon capture and storage (BECCS). “It’s really worrying,” he said. “The number of scenarios that the IPCC reviewed that rely on BECCS for ambitious climate change targets, it’s crazy.”
In 2014, The Tyee ran a feature series on biomass that raised similar concerns about its climate and other environmental impacts. While one state-of-the-art demonstration plant at the University of British Columbia was running very cleanly, “that achievement is likely exceptional,” wrote Robert McClure, executive director of the non-profit InvestigateWest.
“In the United States, a Wall Street Journal review of 107 biomass-fueled power plants found that 79% had been cited in the previous five years for violating air or water pollution standards,” he wrote. “Prompted by health concerns, the American Lung Association, Massachusetts Medical Society, and Florida Medical Association have all come out against large-scale wood-burning to produce energy.”
ExxonMobil Corporation will admit this week that it can no longer profitably develop up to 3.6 billion barrels of its Alberta tar sands/oil sands reserves unless oil prices rise, the Wall Street Journal reports.
The formal acknowledgement, forced on Exxon by the U.S. Securities and Exchange Commission, followed a quarterly report last fall in which Secretary of State Rex Tillerson’s former employer admitted that up to 4.6 billion barrels of its reserves might have to stay in the ground.
The move comes after Exxon burned through $20 billion to “put the oil sands at the centre of its growth plans” through its Kearl project, about 70 kilometres north of Fort McMurray, and “highlights how dramatically the prospects of the region have dimmed,” the Journal reports [sub req’d]. “Once considered a safe bet, Canada’s vast deposits are emerging as a prominent case of reserves being stranded by a combination of high costs, low prices, and tough new environmental rules.”
“For a lot of reasons the oil sands look like a prime candidate for eventual abandonment,” Baker Institute energy fellow Jim Krane told the WSJ. “One problem is that costs are persistently higher. The high carbon content only makes it worse.” The uniquely carbon-intensive process for extracting Alberta heavy oil and bitumen, the Journal acknowledges, has prompted the federal and provincial governments to introduce an (not necessarily foolproof) emissions cap and a carbon levy, on top of the already-high cost of tar sands/oil sands production.
The Journal points to continuing low oil prices as the central factor that has “altered investment priorities” for fossil producers, drawing emphasis away from expensive (and acutely environmentally sensitive) Arctic, ultra-deep, and tar sands/oil sands deposits. “Such projects can require billions of dollars in up-front investment and seven to 10 years, or even more, to bring returns. Now companies are turning to new sources of crude oil, such as shale, that don’t require the same massive investment of time and money to bring to production,” the paper states.
Citing ARC Financial, the WSJ says the price crash and ensuing shift in priorities have so far doomed at least a dozen and a half projects representing 2.5 million barrels of production per day. “Barring some geopolitical catastrophe that really changes the outlook,” said Amy Myers Jaffe, executive director for energy and sustainability at the University of California, Davis, “all these other projects are going to take the wind out of the oil sands.”
Exxon is still happily projecting that oil, gas, and coal will still supply 77% of global energy demand in 2040, against 4% for wind, solar, and biofuels. (h/t to The Energy Mix Subscriber Shelley Kath for pointing us to this story)
Alberta’s tar sands/oil sands producers will blow through Premier Rachel Notley’s promised cap on the sector’s annual emissions in less than a decade, even as they continue to add another 43% to their collective capacity, according to studies by a leading bank and a Calgary-based think tank.
“Both BMO Capital Markets and the Canadian Energy Research Institute (CERI) predict that total oilsands production will reach about four million barrels per day in the 2025 timeframe—up from an expected 2.8 million barrels per day this year,” industry news source JWNEnergy reports. “Around the same time, the sector will break through the 100-megatonne-per-year limit.”
The cap has been criticized for accounting for a fifth of Canada’s remaining carbon budget by 2030.
According to JWN, BMO concluded, “based on current emissions and our production outlook,” that the cap will be “breached by 2025-2026.” By 2030, the sector will be emitting at a level 10% above the cap.
JWN says it’s “unclear” whether this will “incentivize emissions reduction” or “limit production growth.”
Higher output of diluted bitumen from the tar sands/oil sand region “makes international [climate] commitments increasingly difficult to meet,” CERI finds. “Thus there is interest in reducing the amount of GHGs emitted to extract bitumen from the oilsands and generate synthetic crude oil.”
Another study cited by JWNEnergy is particularly optimistic about this prospect. “CO2 emission intensity has the potential to decrease by ~35% with technology that has shown strong results on pilot application,” financial analysts with CIBC World Markets wrote, “and potentially up to ~70 to ~80% from higher-risk recovery schemes.”
With those innovations still mostly on the drawing board, however, a number of tar sands/oil sands operators are already anticipating the first new expansions on their way to achieving JWN’s cap-busting projections.