Mark Carney’s claim that between two-thirds and four-fifths of the world’s proven global oil, gas and coal reserves could be left “stranded” because of climate change action is not supported by the data. All of the oil and gas reserves plus about 20% of the coal reserves could be consumed without exceeding the IPCC’s trillion-tonne carbon emissions limit.
As reported in Blowout Week 92 Mark Carney, the Governor of the Bank of England, recently delivered a speech on climate change at Lloyds of London. The first part of his speech consisted of the obligatory recital of the litany of catastrophes that are going to befall humanity (in particular insurance companies like Lloyds) if no action is taken to combat it. It attracted little attention. The second part, which addressed how climate change action might impact investment in the energy industries, attracted a lot more. What really set the cat among the pigeons was Mr. Carney’s warning that investors are risking huge losses because it could force the world to leave most of its oil, coal and gas reserves unburnt in the ground. As the Financial Times put it:
The governor of the Bank of England has thrown down the gauntlet to the fossil fuel industry with a blunt warning that investors face “potentially huge” losses from climate change action that could make vast reserves of oil, coal and gas “literally unburnable”.
How large is “vast”? According to Mr. Carney we are talking about between two-thirds and four-fifths of the world’s current proven oil, gas and coal reserves:
Take, for example, the IPCC’s estimate of a carbon budget that would likely limit global temperature rises to 2 degrees above pre-industrial levels. That budget amounts to between one fifth and one third of world’s proven reserves of oil, gas and coal.
In this post I’m not going to discuss the propriety of Mr. Carney’s remarks nor the voodoo science that backs the 2˚C limit up. Instead I’m going to assume that climate change action could in fact be carried to the point where the nations of the world commit to emissions targets that force them to leave fossil fuel reserves in the ground (an outcome that would delight many of the delegates to the Paris Conference) and address the question of how large these “stranded” reserves would actually be. Is Mr. Carney’s estimate of two-thirds to four fifths of known proven reserves correct? Or is it exaggerated?
First we must assemble the facts.
What are proven global oil, gas and coal reserves?
Mr. Carney’s comments specify “proven” reserves, and according to the 2015 BP Statistical Review proven global reserves at the end of 2014 were:
- Oil: 1700.1 billion barrels
- Gas: 187.1 trillion cubic meters
- Coal: 891.5 billion tonnes
How much carbon will these reserves emit if we burn them all?
I made two estimates, first using the carbon dioxide emissions coefficients supplied by EIA which after conversion from short tons, gallons and cubic feet to metric units give:
- 1 barrel of oil emits 0.41 tonnes of CO2.
- 1000 cubic meters of gas emits 1.91 tonnes of CO2
- 1 tonne of coal emits 2.31 tonnes of CO2
Multiplying these numbers by reserves gives 848 billion tonnes of total carbon emissions (note that carbon = CO2/3.67):
- 1 barrel of oil emits 0.317 tonnes of CO2.
- 1000 cubic meters of gas emits 1.96 tonnes of CO2
- 1 tonne of coal emits 2.86 tonnes of CO2
And yields 942 billion tonnes of total carbon emissions:
The two estimates are similar and average 895 billion tonnes of carbon. For the purposes of further discussion I have rounded this off to 900 billion tonnes, with 170 coming from oil, 100 from gas and 630 from coal.
How much more carbon can the world therefore emit?
Mr Carney states that his numbers are based on “the IPCC’s estimate of a carbon budget that would likely limit global temperature rises to 2 degrees above pre-industrial levels”. What is the IPCC’s estimate? There have been a number of different ones, but it’s now generally accepted that according to the IPCC the world can emit no more than a trillion tonnes of carbon in total, including carbon already emitted, as discussed here and here.
How much carbon has already been emitted? Estimates of the amount emitted since industrialization (updated at least ten times a second) are given at trillionthtonne.org. The current estimate shows cumulative carbon emissions approaching 595 billion tonnes. This number includes emissions from land use changes which are little better than guesses but I will use it anyway.
And if cumulative carbon emissions total 595 billion tonnes the world can emit 405 billion tonnes more before hitting the trillion tonne ceiling, meaning that it can still burn 405/900 = 45% of proven oil, gas and coal reserves.
But global oil and gas reserves contribute only 270 billion tonnes between them, so the world will be able to burn all of them and still stay below the trillion-ton ceiling, and there’s enough space left over to burn 20% of the coal reserves too. So all the world actually has to leave in the ground to stay below the trillion tonne threshold is 700 billion tonnes of coal, representing 30% of the usable energy contained in current global fossil fuel reserves. The remaining 70%, including all the oil and gas, can be burnt.
Mr. Carney has not done his homework. His estimate of between 67% and 80% of the world’s proven global oil, gas and coal reserves being left “stranded” because of climate change action is an exaggeration, as is his conclusion that the oil and gas industries are under immediate threat. Coal is indeed threatened, but the coal miners already know this.
Other analytical fallout
Other fallout from this brief analysis provides some insights into the IPCC’s CO2 emissions scenarios.
The relationship between emissions and atmospheric CO2 content has remained quite consistent over time. Cumulative global carbon emissions since the beginning of the Industrial Revolution amount to 595 billion tonnes and atmospheric CO2 has increased by 120 ppm over the same period (from 280 to 400ppm), giving an increase of 0.20 ppm in atmospheric CO2 for each billion tonnes of carbon emitted, and as shown in the XY plot below a trend line drawn through the annual data between 1959 and 2010 gives the same number:
Now let us assume that we burn all of the world’s proven fossil fuel reserves, emitting 900 billion tonnes of carbon in the process. How much CO2 does this add to the atmosphere? Using the 0.20 ratio gives 0.2 * 900 = 180 ppm, meaning that atmospheric CO2 will have risen from its present value of 400 ppm to 580 ppm by the time all the reserves are gone.
Now visualize 580ppm on the IPCC graphic below, which shows the CO2 concentrations assumed by the IPCC’s emissions scenarios. Pay particular attention to the “worst case” RCP 8.5 scenario, because this is the one that underpins the temperature projections that underpin the predictions of climate catastrophe that induced Mr. Carney to say what he said:
In a guest post published in April last year Professor Dave Rutledge made the following observation concerning RCP 8.5:
… world coal reserves are a good upper bound on future production. An IPCC scenario that burns two times or seven times the reserves is utterly at odds with the historical experience.
Now RCP8.5 does it again, assuming a CO2 concentration that can be achieved only by burning 4.6 times global reserves, and not just the coal reserves but the oil and gas reserves too.