Europe may be in the throes of an energy shortage and forced to reopen retired coal-fired power plants to cope, but climate activists insist it’s time to move away from fossil fuels , the earliest would be best. According to them, this is a simple solution to the emissions problems in the world. “It’s overflowing with too much carbon. The world can no longer absorb it, ”said Tom Goldtooth, activist and executive director of the North American Indigenous Environmental Network on the sidelines of COP26, as quoted by CNBC. “The simple solution, which we always demand, is that the world must turn the valve off.”
Still, the solution of shutting off the valve doesn’t seem as simple as it sounds. Goldtooth is neither the first nor the last activist to call for an immediate end to oil and gas production. Earlier this year, following the release of the latest report of the Intergovernmental Panel on Climate Change, UN chief Antonio Guterres himself slammed oil and gas.
“This report must spell the end of coal and fossil fuels before they destroy our planet,” he said, adding that “countries should also end all further exploration and production of fossil fuels and transfer fossil fuel subsidies towards renewable energies “.
Also earlier this year, the International Energy Agency released a roadmap to net zero, in which it called for an end to all new oil and gas exploration. Only a few months later, the IEA asked OPEC to relaunch oil and gas exploration to ensure an adequate supply of hydrocarbons in a context of rapidly growing demand.
The IEA’s conflicting positions are a perfect illustration of how challenging the “simple fix” of shutting off the oil taps really is. The CEO of Shell put it succinctly in his comments on the landmark court ruling that forced the supermajor to drastically reduce its carbon footprint.
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“Imagine that Shell decided to stop selling gasoline and diesel today,” Ben van Beurden wrote in a LinkedIn Publish. “It would definitely reduce Shell’s carbon emissions. But that wouldn’t help everyone at all. The demand for fuel would not change. People refueled their cars and delivery trucks at other gas stations.“
It’s the demand side of the hydrocarbon equation that climate activists routinely seem to choose to ignore, focused with laser precision on the production side. When the pandemic started last year, many, including BP, claimed that we had already passed peak demand for oil. However, as the lockdowns eased reality reasserted itself and it turned out that demand for oil did not actually peak at all.
Now, investment banks, International Energy Agency, and the United States Energy information administration all predict even greater demand next year. Investment banks are also forecasting higher oil prices as they expect demand to exceed supply after the first quarter. In fact, some are predicting much higher prices for oil. This means, aside from market speculation, that the oil supply is expected to remain too tight to meet demand expected for most of 2022.
What this context suggests for calls to turn the valve off isn’t exactly a better world, although it would certainly be a low-emission world for a while. Global emissions fell last year as hundreds of millions of people stayed at home during the closures. As soon as the blockages were over, people came out and emissions started to rise. It is no wonder that the idea surfaced that we needed the equivalent of 2020 Covid-19 lockdowns to deal with emissions control.
This idea could still gain traction amid campaign calls for an end to oil and gas. Campaigners – and scientists, by the way – warn that the goals of the Paris Agreement are unattainable with current efforts. In fact, scientists have valued that we need to do much more to reduce emissions, halving current levels over the next eight years, in order to have any chance of meeting the Paris Agreement goals and primarily the goal reduce the increase in global temperature to 1.5 degrees Celsius by the end of the century.
To be fair, the 1.5 degree scenario was until recently commonly referred to as the most ambitious scenario and therefore the least likely to succeed. The 2-degree scenario was the one recognized as being the most in our power. Now it looks like the 1.5 degree scenario is the one we should be aiming for no matter what.
And all that needs to be done could include national lockdowns and, if activists are heard at a high enough level, cuts in oil and gas production, which, as IHS Markit’s Daniel Yergin warned more early this year, would lead to more energy crises like the one currently ravaging Europe. Because the demand for energy is not going anywhere. Indeed, the demand for energy on a global scale is expected to increase considerably in the coming years. Policy makers and activists both need to refocus their attention on this part of the hydrocarbon equation.
By Irina Slav for Oil Octobers
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