https://www.theguardian.com/environment/2016/nov/18/obama-arctic-ocean-drilling-fossil-fuels-trump

Barack Obama’s administration has ruled out drilling for oil and gas in the pristine Arctic Ocean, throwing up a last-ditch barrier to the pro-fossil fuels agenda of incoming president Donald Trump.

The US Department of the Interior said that the “fragile and unique” Arctic ecosystem would face “significant risks” if drilling were allowed in the Chukchi or Beaufort Seas, which lie off Alaska. It added that the high costs of exploration, combined with a low oil price, would probably deter fossil fuel companies anyway.

“The plan focuses lease sales in the best places – those with the highest resource potential, lowest conflict, and established infrastructure – and removes regions that are simply not right to lease,” said the interior secretary, Sally Jewell.

“Given the unique and challenging Arctic environment and industry’s declining interest in the area, forgoing lease sales in the Arctic is the right path forward.”

The move, announced as part of the federal government’s land and ocean leasing program that will run from 2017 to 2022, has been cheered by environmentalists who called for the Arctic to be put off limits for drilling to help slow climate change and avoid a catastrophic oil spill.

“Today’s announcement demonstrates a commitment to prioritizing common sense, economics and science ahead of industry favoritism and politics as usual,” said Jacqueline Savitz, Oceana’s senior vice-president for the United States.

“The decades-long push to drill in the Arctic has put this unique and diverse ecosystem at risk, cost tens of billions of dollars and created significant controversy without providing the promised benefits. We now have the opportunity to put the old arguments behind us and work together toward a sustainable future for the Arctic region.”

The removal of the Arctic Ocean from federal leasing runs contrary to Trump’s vow to “lift the Obama-Clinton roadblocks” to large fossil fuel projects and throw open vast areas of land and water to drilling. But even if Trump reverses the Arctic ban, the economics are still unfavorable for offshore drilling in the region.

Shell spent more than $7bn on its attempt to exploit oil and gas reserves in the Arctic after being allowed to do so by the US government despite a high predicted risk of an oil spill in the frigid ecosystem. The Anglo-Dutch company abandoned its drilling operation in September last year, having faced huge costs and fierce opposition from green groups.

Fossil fuel interests have eyed the Arctic as a huge new frontier for oil and gas riches, with rapidly melting sea ice making areas of the Arctic Ocean more accessible for drilling rigs. The Arctic holds about 90bn barrels of undiscovered oil and 30% of the world’s untapped natural gas.

However, the International Energy Agency has warned that the drilling in the Arctic is not yet commercially viable, while environmental groups have warned that opening up new fossil fuel development will push the planet over the precipice into catastrophic climate change.

The Arctic is at the forefront of global warming, with the region heating up at twice the rate of the rest of the planet. This summer, Arctic sea ice shrank to its second smallest extent ever recorded, with the annual winter regrowth occurring at a “sluggish” rate, according to the National Snow and Ice Data Center. On current trends, ice is returning at a slower rate than the record low experienced in 2012.

The new federal leasing plan also makes the Atlantic off-limits to drilling, another success for environmentalists and coastal communities that fought initial plans to lease areas to fossil fuel firms. But the plan does include 10 new sales in the Gulf of Mexico, the epicenter of US offshore drilling.

The federal government, through the Bureau of Ocean Energy Management, currently manages around 3,400 active oil and gas leases in federal waters, covering an area spanning 18m acres.

“Today’s decision is a victory for the Arctic and demonstrates the growing strength of the movement to keep fossil fuels in the ground. But we also need to protect communities along the Gulf of Mexico,” said Marissa Knodel, a campaigner at Friends of the Earth.

“Unfortunately, Donald Trump has made it clear that he wants to return to the days of ‘drill baby drill’. That’s why President Obama must use his remaining days in office to permanently keep as much of our lands and waters from Trump and his oil cronies as possible.”

The Obama administration has pushed through a number of climate-related measures since the election of Trump, who denies climate change exists and has promised to withdraw the US from the international effort to tackle it. The president-elect also proposes cutting all funding for clean energy and to dismantle Obama’s Clean Power Plan, the main policy designed to cut emissions.

This week, the department of the interior unveiled regulations to slash fugitive emissions of methane, a potent greenhouse gas, from natural gas operations. The US was also the first nation to submit to the United Nations a plan on how it will reduce emissions, with the Obama administration setting a goal of an 80% reduction by 2050.

John Kerry, the secretary of state, said this week that climate change is “bigger than one person, one president” and that international progress on the issue was unstoppable, despite the threat of US withdrawal from the Paris climate agreement.

Businesses have also stated their support for the international climate effort, with more than 360 companies, including Levi’s, Kellogg’s and Nike, urging Trump to keep up American efforts to ward off dangerous global warming.

Oil giants including BP and Shell have been pilloried by climate campaigners after disclosing their annual contributions to a much-hyped new green investment fund would be less than BP chief Bob Dudley earned last year.

Mr Dudley and Royal Dutch Shell chief executive Ben van Beurden were among industry heavyweights who appeared at an event in London to announce plans by the Oil and Gas Climate Initiative (OGCI) to invest $1bn in “innovative low emissions technologies” over the next ten years.

Rather than investing in renewables, the fund’s initial focus will be on action to reduce methane emissions from gas production and on technologies to capture and either use or store carbon emissions, they said.

Environmental group Greenpeace pointed out the funding equated to just $10m (£8m) a year for each of the OGCI’s ten members, compared with Mr Dudley’s controversial 2015 pay package of almost £14m.

Charlie Kronick, climate adviser at Greenpeace UK, said it was a “pathetic offering” that would do nothing to combat climate change and “even fails as an effective example of PR spin”.

The OGCI, whose members also include Saudi Aramco, Statoil and Total, represents companies that together account for one-fifth of the world’s oil and gas production.

Mr Dudley stressed that the joint fund was just “a start” and was not the sum total of the companies’ efforts on green energy, which he said together amounted to “billions”.

“This is happening alongside all of the work we are doing individually as companies on the transition to a lower emissions world,” he said, adding: “Don’t worry, we’ve got it.”

The new fund could invest in start-up companies and also fund research and development programmes at universities, Patrick Pouyanne of Total said.

The fund could also then look at industrial energy efficiency and cutting emissions in the transport sector, but does not plan to invest in renewables like solar or wind.

“The energy mix of the world will evolve. We take it very seriously,” Mr Pouyanne said.

The companies wanted to “make real progress on these technologies because we need them”, he said. “It’s a matter for us of being able to maintain our business in the future and to develop it.”

Mr Dudley said that the investments were “the right thing to do” but that they would also make economic sense for the companies.

“We all absolutely realise the world will move to a low-carbon world, emissions will be an issue. Some places there will be prices on carbon,” he said.

Reducing methane emissions was “an essential licence for us to be able to advocate for natural gas”.

Dr Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit, said the planned investment was a “drop in the ocean”.

“Shell’s capex budget for 2016 alone is $25-29bn, Saudi Aramco values itself at more than $2 trillion, and the cost incurred by BP following the Deepwater Horizon spill was $61.6bn,” he said.

Big Oil’s critics suggest that their business model is fundamentally incompatible with tackling climate change because climate science suggests much of the world’s existing fossil fuel reserves must be left in the ground is to avoid dangerous extremes of global warming.

But Mr van Beurden said their valuations were driven by proved reserves that would last about a decade and that it was therefore “rather unlikely” that they would not be produced.

“If you take a longer-term view, we cannot burn all the hydrocarbons on the planet in an unmitigated way,” he said. “But there is no alternative to using some of the hydrocarbons for a very long time to come.”

“The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil,”

Sheikh Zaki Yamani, Saudi Arabia’s energy minister in the 1970s

This sentiment arguably still chimes with Riyadh’s outlook in 2016 particularly with countries such as China exploring long-term alternative sources of clean energy.

Saudi Arabia’s Vision 2030, announced in April by Deputy Crown Prince Mohammed bin Salman, the first phase of which, the National Transformation Plan, was approved last week by the cabinet in Riyadh, envisages a huge diversification of the Saudi economy away from its dependency on oil production over the coming decades.

In the near term, Saudi Arabia continues to target oil market share, pumping at near record highs, although, as current Saudi energy minister Khalid al-Falih said on June 2 at a meeting of the Organization of Petroleum Exporting Countries “there is no reason to expect that Saudi Arabia is going to go on a flooding campaign”.

Undoubtedly Saudi Arabia’s pumping strategy continues to reflect, at least partly, Riyadh’s desire not to hand market share to its regional rival Iran as the latter seeks to ramp up oil production following the easing of Western sanctions related to Tehran’s nuclear programme.

But it likely also includes a calculation that targeting price over market share is no longer a viable policy.

The higher the price of a barrel of oil, the easier it is to justify the production of energy where the extraction costs are significantly greater than those of Saudi Arabia, especially when low interest rates allow projects to secure cheap financing.

Equally, newly-developed extraction technologies do not disappear.

Saudi Arabia may have hoped to bear down, through increased production, on the ability of the US shale oil industry’s ability to compete but those US producers have, so far, proved tenacious.

Shale oil potentially becomes stranded in the ground if the global oil price is too low to justify its extraction but as the price ticks up, the production comes back on-stream while technological advances may even lower the extractive costs.

But as Riyadh looks out to 2030 it also has to factor into its calculations that major energy-consuming economies, including China, are ploughing money into efforts to develop dependable sources of clean energy.

On the consumer side, Hong Kong itself is already championing the use of electric vehicles but that electricity is still largely sourced from carbon-energy.

The ultimate prize is to create that electricity from a carbon-free energy source.

And one way to do that is by exploring the feasibility of nuclear fusion technology to re-create on planet Earth the conditions that generate the energy that powers the sun and the stars. The International Thermonuclear Experimental Reactor (ITER) Project, after the Latin word iter meaning the way, is a collaboration of 35 nations including China.

The aim, as ITER explains it, is to create “the tokamak… an experimental machine designed to harness the energy of fusion”.

“Inside a tokamak, the energy produced through the fusion of atoms is absorbed as heat in the walls of the vessel. Just like a conventional power plant, a fusion power plant will use this heat to produce steam and then electricity by way of turbines and generators,” ITER says.

Science fiction? Yet in February Chinese scientists in Hefei, the capital of Jiangsu province, managed in their own Experimental Advanced Superconducting Tokamak (EAST) to heat, as the POST reported, “a hydrogen gas – a hot ionised gas called a plasma – to about 50 million Kelvins (49.999 million degrees Celsius). The interior of our sun is calculated to be around 15 million Kelvins.”

Previous experiments by European and Japanese physicists could only hit that temperature for periods of less than a minute. The EAST team maintained that temperature for 102 seconds which was a breakthrough.

Energy produced from fusion technology is many decades away even if it is shown to be achievable but Riyadh understands it is just another example of how the world is seeking alternatives to carbon energy.

Saudi Arabia may not have been looking EAST when it mapped out its 2030 Vision but the Hefei success, and indeed technological advances in shale oil extraction, surely underscore why Riyadh is targeting oil market share, not price, and help explain its determination to diversify the Saudi economy over the next few decades.

As a major energy consumer, China can surely only benefit from this as Saudi Arabia has apparently realised that Sheikh Yamani had a point.
________________________________________
Source URL: http://www.scmp.com/business/global-economy/article/1974989/forget-about-peak-oil-heres-real-reason-saudi-arabia-selling

The EU abandoned or weakened key proposals for new environmental protections after receiving a letter from a top BP executive which warned of an exodus of the oil industry from Europe if the proposals went ahead.

In the 10-page letter, the company predicted in 2013 that a mass industry flight would result if laws to regulate tar sands, cut power plant pollution and accelerate the uptake of renewable energy were passed, because of the extra costs and red tape they allegedly entailed.

The measures “threaten to drive energy-intensive industries, such as refining and petrochemicals, to relocate outside the EU with a correspondingly detrimental impact on security of supply, jobs [and] growth,” said the letter, which was obtained by the Guardian under access to documents laws.

The missive to the EU’s energy commissioner, Günther Oettinger, was dated 9 August 2013, partly hand-written, and signed by a senior BP representative whose name has been redacted.

It references a series of “interactions” between the two men – and between BP and an unnamed third party in Washington DC – and welcomes opportunities to further discuss energy issues in an “informal manner”.

BP’s warning of a fossil fuel pull-out from Europe was repeated three times in the letter, most stridently over plans to mandate new pollution cuts and clean technologies, under the industrial emissions directive.

This reform “has the potential to have a massively adverse economic impact on the costs and competitiveness of European refining and petrochemical industries, and trigger a further exodus outside the EU,” the letter said.

The plant regulations eventually advanced by the commission would leave Europe under a weaker pollution regime than China’s, according to research by Greenpeace.

BP said any clampdown would cost industry many billions of euros and so pollution curbs “should also be carefully accessed with close co-operation with the industrial sectors”.

Last year the EU’s environment department moved to limit the coal lobby’s influence on pollution standards, after revelations by the Guardian and Greenpeace about the scale of industry involvement.

The commission had previously allowed hundreds of energy industry lobbyists to aggressively push for weaker pollution limits as part of the official negotiating teams of EU member states.

The Green MEP Molly Scott Cato said that the UK’s robust advocacy of BP’s positions was a cause of deep shame, and illustrated how Brexit would increase the power of fossil fuel firms.

She said: “It reveals how the arm-twisting tactics of big oil seek to undermine the EU’s progressive energy and climate policies. BP’s covert lobbying, combined with threats of an exodus of the petrochemicals industry from the EU, are nothing short of blackmail.

“This document paints a disturbing picture of the degree to which global corporations subvert the democratic process, influence the commission and threaten the vital transition to a cleaner, greener Europe.”

A BP spokesman said that the letter was intended to “highlight the risk of ‘carbon leakage’, where EU policy to reduce carbon emissions may result in industry relocating outside the EU, rather than achieving any actual reduction in emissions. Avoiding this perverse outcome is of critical importance to climate policy.”

In his reply to BP, Oettinger said that his department was finalising an energy prices report and “your thoughts are very valuable in this context”.

Before the report’s publication, Oettinger’s team removed figures from an earlier draft which revealed that EU states spent €40bn (£32bn) a year on subsidies for fossil fuels, compared to €35bn for nuclear energy, and just €30bn for renewables. The commissioner’s office argues that the numbers were inconsistent and “not comparable”

Early in his tenure, Oettinger had been forced to back down on plans for a moratorium on deepwater offshore oil drills in the wake of the BP Deepwater Horizon disaster.

Within two years, he had become an industry champion, arguing that Europe was competitively disadvantaged by a reluctance to take offshore drilling risks.

Oettinger regularly hosts alpine retreats for government ministers, bankers and captains of industry. In 2013, these included executives from Shell, Statoil, GDF Suez, EDF, Alstom, Enel and ENI, although not BP.

A spokeswoman for Oettinger said: “When the Commission prepares formal legislative proposals, there is a full public consultation exercise in which all stakeholders can participate.

With the majority of the EU legislation referred to, Commissioner Oettinger was not the Commissioner in the lead.”

An alignment between the commission’s eventual climate proposals and BP’s positions was “unfound,” the official added.

In his reply to BP, Oettinger said that he shared the firm’s views on a guarantee for unlimited crude oil and gas exports being included in a TTIP free trade deal and welcomed more “thoughts” from the company.

Along with Shell, BP began lobbying for an end to the EU’s renewables and energy efficiency targets in 2011, but the scope of its lobby intervention went further.

In its letter, BP strongly opposed renewable energy subsidies, particularly in Germany, and a planned cap on certain biofuels which studies have shown to be highly-polluting.

Over the year that followed, an EU state aid decision on renewables went against Germany, while a cap on the amount of first generation biofuels that could be counted towards EU targets was also weakened.

Europe’s efforts to cut carbon emissions should be built upon market-based tools such as its flagship emissions trading scheme, BP said in its letter.

But EU proposals to label tar sands oil as more polluting than other oil – which could lead to additional taxes – risked companies “being penalised subjectively on the basis of adverse perceptions”, according to BP.

The tar sands proposal was vehemently opposed by the UK and the Netherlands, and the plan was eventually dropped in 2014.

Jos Dings, the director of the sustainable transport thinktank Transport and Environment said: “In case anyone doubted why Europe chose to treat all oil – regular and high polluting – the same, here’s the answer: Big Oil telling the commission that really its impossible to tell them apart.”

Lisa Nandy, the Labour’s shadow energy and climate secretary, called for the EU’s climate policies to be strengthened. “By working together with like-minded governments across Europe we can ensure that big companies cannot water down environmental safeguards,” she said.

BP recently topped a survey of the most obstructive company on climate change, and is increasingly a target for fossil fuels divestment campaigns.

http://www.bbc.com/autos/story/20160527-how-to-save-a-billion-gallons-of-petrol

Back in 2008, during one of the more memorable exchanges in the US Presidential race between then-Senator Barack Obama and Senator John McCain centred on offshore drilling — its value to the American nation, or lack thereof. Sen Obama took an unusual approach to the argument: He focused on tyre pressure. “Making sure your tyres are properly inflated, simple thing, but we could save all the oil that they’re talking about getting off drilling, if everybody was just inflating their tyres and getting regular tune-ups,” he said. “You could actually save just as much.”

Replied Sen McCain: “My opponent doesn’t want to drill, he doesn’t want nuclear power, he wants you to inflate your tyres.”

Obama’s claim — that simply maintaining proper tyre pressure could save as much fuel as the country stood to gain from offshore drilling — sent fact-checkers scurrying for answers. Could it be true? Could such a simple trick — managing four tyres’ PSI can be accomplished in about four minutes — really improve fuel economy by 4% and, collectively speaking, save a billion gallons of petrol a year? The answer, according to the US Government Accountability Office, is an emphatic yes. Notes a GAO memorandum dated 9 Feb 2007: “The Department of Energy’s designated economist on this issue indicated that, of the 130 billion gallons of fuel that the Transportation Research Board (TRB) estimated were used in passenger cars and light trucks in 2005, about 1.2 billion gallons were wasted as a result of driving on underinflated tires.”

The memo notes that in 1999, underinflated tyres contributed to the deaths of nearly 250 motorists and caused the injuries of some 25,000 more.

A former U.S. Department of Justice attorney who prosecuted and won the massive racketeering case against Big Tobacco thinks the agency should consider investigating Big Oil for similar claims: engaging in a cover-up to mislead the public about the risks of its product.

Sharon Eubanks, who now works for the firm Bordas & Bordas, told ThinkProgress that ExxonMobil and other members of the fossil fuel industry could be held liable for violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) if it’s discovered that the companies worked together to suppress knowledge about the reality of human-caused climate change. She said that, considering recent revelations regarding ExxonMobil, the DOJ should consider launching an investigation into big fossil fuel companies.

“I think a RICO action is plausible and should be considered,” she said.

Eubanks’ comments come a few days after two House Democrats urged Attorney General Loretta Lynch to launch an investigation into ExxonMobil for hiding the results of its own climate change research. Recent investigations from Inside Climate News and the Los Angeles Times discovered that ExxonMobil conducted research in 1977 affirming that climate change was caused by carbon emissions from fossil fuels, yet continued to fund politicians and organizations that deny climate science and work to prevent regulations limiting carbon emissions.

Many have compared the situation to the actions of the tobacco industry. In 2006, a federal judge found that the big tobacco companies colluded to “deceive the public” about the health hazards of smoking, which amounted to a racketeering enterprise. The reason they did it, Eubanks said, was to avoid health regulations and save money.

“The cigarette companies actively denied the harm of cigarette smoking, and concealed the results of what their own research developed,” she said. “The motivation was money, and to avoid regulation.”

It appears to me … that there was a concerted effort by Exxon and others to confuse the public on climate change.

Based on the revelations about ExxonMobil, Eubanks said the Department of Justice should consider investigating whether similar collusion occurred among big fossil fuel companies and other high-carbon-emitting industries that would profit from climate denial.

“It appears to me, based on what we know so far, that there was a concerted effort by Exxon and others to confuse the public on climate change,” Eubanks said. “They were actively denying the impact of human-caused carbon emissions, even when their own research showed otherwise.”

In addition to giving millions of dollars to politicians and groups that deny climate science, ExxonMobil helped found the Global Climate Coalition, “an alliance of some of the world’s largest companies seeking to halt government efforts to curb fossil fuel emissions,” according to Inside Climate. Exxon’s company leaders also argued against the Kyoto Protocol, an international treaty to fight climate change which the U.S. refused to sign. Exxon reportedly advised then-President George W. Bush not to sign it.

Critics say ExxonMobil did this while knowing full well the risks of climate change, which is expected to include the displacement of millions of people and even the erasure of some low-lying island nations.

Because of this, calls for a DOJ investigation into ExxonMobil and other fossil fuel companies are getting louder. Last week, Democratic presidential candidate and former Maryland Governor Martin O’Malley tweeted his support for an investigation, drawing yet another parallel to the tobacco industry.

“We held tobacco companies responsible for lying about cancer,” O’Malley said. “Let’s do the same for oil companies and climate change.”

However, Eubanks warned that if the charge is anything like the tobacco case, a DOJ investigation would need bi-partisan support — or a Democratic-controlled Congress and White House — to be successful. She recalled dealing with a Republican-controlled Congress during the prosecution of the tobacco industry, and then later, a Republican president who did not want to see the industry hurt.

“We filed the case under the Clinton administration, and we struggled with budget issues — many of the Republicans pushed hard to push us down,” Eubanks said.

After Bush was elected, the environment at the DOJ worsened. “They were trying to choke the case off,” she said. “It was a long time ago, but i still get queasy feeling when I think about working seven-day weeks all the time, and a nine-month trial, to see these people trying to kill the case.”

She did eventually win the case, but at a cost, Eubanks said. Instead of the $130 billion her team had sought, Bush administration loyalists pushed her team to seek only $10 billion, she said.

“This is more important than just running a case.”

Still, Eubanks stressed than a similar investigation into ExxonMobil could be worthwhile under any political circumstances — even if it’s to find out that there’s not enough evidence to bring a lawsuit at all.

“I can’t tell you that it clears every hurdle,” she said. “I’m not an environmental lawyer. But I know it’s important…This is more important than just running a case. That much I’m sure of.”

Kelle Louaillier and Bill McKibben

Just as big tobacco deliberately misled the public on the cancer-causing effects of smoking, big oil attacked scientists who warned of the impending climate disaster and their attempts now to help ‘solve’ the problem should be shunned by governments, write Kelle Louaillier and Bill McKibben

OVER the last few years, a growing number of people have been taking a hard look at what is happening to our planet — historic rising sea levels, massive floods — and acknowledging, finally, that human activity is propelling rapid climate change. But guess what? Exxon (now ExxonMobil) had an inkling of this as early as 1978.

By the early 1980s, Exxon scientists had much more than an inkling. They not only understood the science behind climate change, but also recognized the company’s own outsize role in driving the phenomenon.

Recognizing the potential effects as “catastrophic” for a significant portion of the population, they urged Exxon’s top executives to act. Instead, the executives buried the truth.

There may be a silver lining to this infuriating story: The recent investigation that exposed Exxon’s deceit could end up catalysing the action needed to address the looming climate crisis. After all, similar revelations about the tobacco industry — what the major cigarette companies knew and when they knew it — transformed the public-health landscape.

In 1996, a series of lawsuits forced tobacco companies to release millions of internal documents, which confirmed what public-health advocates and policymakers had long suspected: As early as the 1950s, the industry knew that nicotine was addictive and that cigarettes caused cancer.

But, to protect its own interests, big tobacco deliberately misled the public, doing everything possible to cast doubt on scientific findings that it knew to be accurate. Such tactics enabled the industry to delay, for more than 50 years, regulation that could have saved millions of lives annually.

After the revelations, however, it was clear that the tobacco industry was a malevolent force that did not belong in the policymaking process. With big tobacco out of the picture, and armed with evidence of the real effects of tobacco consumption, health advocates were finally able to compel their governments to act.

In 2003, world leaders agreed to the Framework Convention on Tobacco Control (FCTC), negotiated under the auspices of the World Health Organisation. Today, the treaty covers 90% of the world’s population and has contributed to a significant decline in sales for global tobacco corporations. Over time, it will save hundreds of millions of lives (and save governments’ health budgets huge sums).

Big oil, it is now clear, has been following big tobacco’s playbook. In 1997, almost two decades after it began studying climate change, it quashed its research, claiming that climate science was “far from clear” and thus it did not “support mandated cuts in energy use.”

Beyond suppressing its own findings, ExxonMobil (and its peers) funded and promoted junk science and attacked scientists who warned of the impending climate disaster. The fossil-fuel companies’ approach was so effective that the media are only now beginning to recognise the leading role the industry played in creating — almost out of whole cloth —the so-called climate debate.

But perhaps big oil’s biggest success was diminishing the political will to implement appropriate regulation. Even after the international community adopted the UN Framework Convention on Climate Change (UNFCCC) in 1992, the fossil-fuel industry managed to block meaningful progress — to the point that, if serious action is not taken soon, the entire process could unravel.

In Europe, Royal Dutch Shell’s lobbying so diluted the EU’s efforts that there are now no binding targets for renewables or energy efficiency for individual countries. The company even sent a letter to the European Commission’s president claiming that “gas is good for Europe.” Shell and other oil companies are now promising to work as “advisers” to national governments on how to deal with climate change.

Just as the tobacco files drove the tobacco industry out of policymaking processes, the Exxon investigation should compel world leaders to eliminate the fossil-fuel industry from efforts to solve the climate crisis. After all, no policy can succeed if those who shape it are betting on its failure.

The turning point for tobacco-related public-health policy came when the industry’s depravity became indisputable. Now, that moment has come for the climate movement.

We cannot simply hope that the fossil-fuel industry will change its ways. As an alliance of human-rights groups, environmental activists, and corporate-accountability advocates already is demanding, we must kick the industry out of the policymaking process altogether.

Exxon’s scientists were right: The effects of climate change on many communities are catastrophic. With so many lives at stake — and such clear evidence of the threat big oil, like big tobacco before it, should be treated for what it is: big trouble.

Kelle Louaillier is president of Corporate Accountability International. Bill McKibben, a scholar in environmental sciences at Middlebury College and member of the American Academy of Arts and Sciences, is co-founder of 350.org.

Petrochemical industry insiders have disputed claims made in Under the Dome, Chai Jing’s documentary on smog in China, that lax quality standards for petroleum were a key reason for worsening air pollution.

The investigation by Chai, a former state television presenter, also claimed interference by China’s major oil companies was another factor.

Cao Xianghong, head of the China Petroleum Industrial Standardisation Committee, said on the sidelines of the the Chinese People’s Political Consultative Conference yesterday that the country had steadily been improving the quality of its petrol and diesel since 2000.

“It’s wrong to say China’s petroleum quality upgrading is too slow,” said Cao, who rejected the conclusion that the standards committee was dominated and heavily influenced by major oil companies, as suggested in Chai’s documentary.

A standard could only be approved if it gained support from three quarters of members from a voting group of about 50 experts, Cao said. Fifty-one per cent of the experts were from the petrochemical industry, while the remainder came from the motor industry, environmental protection department, military and other government agencies, Cao said. Cao is a former vice-president of oil giant China Petroleum & Chemical Corporation.

Meanwhile, a widely circulated online article purportedly penned by a senior engineer from the state oil giant China National Petroleum Corporation said Chai’s video had confused viewers by blaming vehicle exhausts as the main culprit for smog in northern China when in fact it was coal combustion.

The article, attributed to Wan Zhanxiang, a CNPC deputy chief engineer for natural gas quality and standards, said that national petroleum standards were set by government departments, not big oil corporations.

But Yue Xin, a researcher at the Chinese Research Academy of Environmental Sciences who has also been involved in setting the petroleum standards, wrote in his blog that China’s environmental protection department had no power to veto the standards if it found them too lax.

“Staff from the petroleum industry have dominated key positions in the standards committee, such as the secretary general. And they take advantage in voting,” Yue wrote.

He criticised the monopoly of China’s major oil companies, who have refused to make public the cost of refining petroleum.

Only Beijing, Shanghai and a few cities in Jiangsu, Zhejiang and Guangdong provinces have adopted emissions standards on a par with the Euro 5b standards. Europe started implementing Euro 6 standards in September.

Additional reporting by Teddy Ng and Mimi Lau

Source URL (modified on Mar 4th 2015, 11:44am): http://www.scmp.com/news/china/article/1728870/oil-executives-say-smog-documentary-confuses-facts-about-industrys-role

Shell’s commitment to LNG came at a time when natural gas spot futures were trading above $17 per unit compared with around $4 today.

A former British Petroleum (BP) geologist has warned that the age of cheap oil is long gone, bringing with it the danger of “continuous recession” and increased risk of conflict and hunger.

At a lecture on ‘Geohazards’ earlier this month as part of the postgraduate Natural Hazards for Insurers course at University College London (UCL), Dr. Richard G. Miller, who worked for BP from 1985 before retiring in 2008, said that official data from the International Energy Agency (IEA), US Energy Information Administration (EIA), International Monetary Fund (IMF), among other sources, showed that conventional oil had most likely peaked around 2008.

Dr. Miller critiqued the official industry line that global reserves will last 53 years at current rates of consumption, pointing out that “peaking is the result of declining production rates, not declining reserves.” Despite new discoveries and increasing reliance on unconventional oil and gas, 37 countries are already post-peak, and global oil production is declining at about 4.1% per year, or 3.5 million barrels a day (b/d) per year:

“We need new production equal to a new Saudi Arabia every 3 to 4 years to maintain and grow supply… New discoveries have not matched consumption since 1986. We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover – but production is still falling at 4.1% p.a. [per annum].”

Dr. Miller, who prepared annual in-house projections of future oil supply for BP from 2000 to 2007, refers to this as the “ATM problem” – “more money, but still limited daily withdrawals.” As a consequence: “Production of conventional liquid oil has been flat since 2008. Growth in liquid supply since then has been largely of natural gas liquids [NGL]- ethane, propane, butane, pentane – and oil-sand bitumen.”

Dr. Miller is co-editor of a special edition of the prestigious journal, Philosophical Transactions of the Royal Society A, published this month on the future of oil supply. In an introductory paper co-authored with Dr. Steve R. Sorrel, co-director of the Sussex Energy Group at the University of Sussex in Brighton, they argue that among oil industry experts “there is a growing consensus that the era of cheap oil has passed and that we are entering a new and very different phase.” They endorse the conservative conclusions of an extensive earlier study by the government-funded UK Energy Research Centre (UKERC):

“… a sustained decline in global conventional production appears probable before 2030 and there is significant risk of this beginning before 2020… on current evidence the inclusion of tight oil [shale oil] resources appears unlikely to significantly affect this conclusion, partly because the resource base appears relatively modest.”

In fact, increasing dependence on shale could worsen decline rates in the long run:

“Greater reliance upon tight oil resources produced using hydraulic fracturing will exacerbate any rising trend in global average decline rates, since these wells have no plateau and decline extremely fast – for example, by 90% or more in the first 5 years.”

Tar sands will fare similarly, they conclude, noting that “the Canadian oil sands will deliver only 5 mb per day by 2030, which represents less than 6% of the IEA projection of all-liquids production by that date.”

Despite the cautious projection of global peak oil “before 2020″, they also point out that:

“Crude oil production grew at approximately 1.5% per year between 1995 and 2005, but then plateaued with more recent increases in liquids supply largely deriving from NGLs, oil sands and tight oil. These trends are expected to continue… Crude oil production is heavily concentrated in a small number of countries and a small number of giant fields, with approximately 100 fields producing one half of global supply, 25 producing one quarter and a single field (Ghawar in Saudi Arabia) producing approximately 7%. Most of these giant fields are relatively old, many are well past their peak of production, most of the rest seem likely to enter decline within the next decade or so and few new giant fields are expected to be found.”

“The final peak is going to be decided by the price – how much can we afford to pay?”, Dr. Miller told me in an interview about his work. “If we can afford to pay $150 per barrel, we could certainly produce more given a few years of lead time for new developments, but it would break economies again.”

Miller argues that for all intents and purposes, peak oil has arrived as conditions are such that despite volatility, prices can never return to pre-2004 levels:

“The oil price has risen almost continuously since 2004 to date, starting at $30. There was a great spike to $150 and then a collapse in 2008/2009, but it has since climbed to $110 and held there. The price rise brought a lot of new exploration and development, but these new fields have not actually increased production by very much, due to the decline of older fields. This is compatible with the idea that we are pretty much at peak today. This recession is what peak feels like.”

Although he is dismissive of shale oil and gas’ capacity to prevent a peak and subsequent long decline in global oil production, Miller recognises that there is still some leeway that could bring significant, if temporary dividends for US economic growth – though only as “a relatively short-lived phenomenon”:

“We’re like a cage of lab rats that have eaten all the cornflakes and discovered that you can eat the cardboard packets too. Yes, we can, but… Tight oil may reach 5 or even 6 million b/d in the US, which will hugely help the US economy, along with shale gas. Shale resources, though, are inappropriate for more densely populated countries like the UK, because the industrialisation of the countryside affects far more people (with far less access to alternative natural space), and the economic benefits are spread more thinly across more people. Tight oil production in the US is likely to peak before 2020. There absolutely will not be enough tight oil production to replace the US’ current 9 million b/d of imports.”

In turn, by prolonging global economic recession, high oil prices may reduce demand. Peak demand in turn may maintain a longer undulating oil production plateau:

“We are probably in peak oil today, or at least in the foot-hills. Production could rise a little for a few years yet, but not sufficiently to bring the price down; alternatively, continuous recession in much of the world may keep demand essentially flat for years at the $110/bbl price we have today. But we can’t grow the supply at average past rates of about 1.5% per year at today’s prices.”

The fundamental dependence of global economic growth on cheap oil supplies suggests that as we continue into the age of expensive oil and gas, without appropriate efforts to mitigate the impacts and transition to a new energy system, the world faces a future of economic and geopolitical turbulence:

“In the US, high oil prices correlate with recessions, although not all recessions correlate with high oil prices. It does not prove causation, but it is highly likely that when the US pays more than 4% of its GDP for oil, or more than 10% of GDP for primary energy, the economy declines as money is sucked into buying fuel instead of other goods and services… A shortage of oil will affect everything in the economy. I expect more famine, more drought, more resource wars and a steady inflation in the energy cost of all commodities.”

According to another study in the Royal Society journal special edition by professor David J. Murphy of Northern Illinois University, an expert in the role of energy in economic growth, the energy return on investment (EROI) for global oil and gas production – the amount of energy produced compared to the amount of energy invested to get, deliver and use that energy – is roughly 15 and declining. For the US, EROI of oil and gas production is 11 and declining; and for unconventional oil and biofuels is largely less than 10. The problem is that as EROI decreases, energy prices increase. Thus, Murphy concludes:

“… the minimum oil price needed to increase the oil supply in the near term is at levels consistent with levels that have induced past economic recessions. From these points, I conclude that, as the EROI of the average barrel of oil declines, long-term economic growth will become harder to achieve and come at an increasingly higher financial, energetic and environmental cost.”

Current EROI in the US, Miller said, is simply “not enough to support the US infrastructure, even if America was self-sufficient, without raising production even further than current consumption.”

In their introduction to their collection of papers in the Royal Society journal, Miller and Sorrell point out that “most authors” in the special edition “accept that conventional oil resources are at an advanced stage of depletion and that liquid fuels will become more expensive and increasingly scarce.” The shale revolution can provide only “short-term relief”, but is otherwise “unlikely to make a significant difference in the longer term.”

They call for a “coordinated response” to this challenge to mitigate the impact, including “far-reaching changes in global transport systems.” While “climate-friendly solutions to ‘peak oil’ are available” they caution, these will be neither “easy” nor “quick”, and imply a model of economic development that accepts lower levels of consumption and mobility.

In his interview with me, Richard Miller was particularly critical of the UK government’s policies, including abandoning large-scale wind farm projects, the reduction of feed-in tariffs for renewable energy, and support for shale gas. “The government will do anything for the short-term economic bounce,” he said, “but the consequence will be that the UK is tied more tightly to an oil-based future, and we will pay dearly for it.”

23 Dec 2013