In my review of Seth Klein’s A Good War, I took issue with the author’s statement that in order to fight climate change we need to eliminate the fossil fuel industry. I have repeatedly pointed out how ridiculous that claim is and think it is time to put some numbers to my claims about fossil fuels and their continued role in our existence as a civilized society.
Sadly, as a start to any post of this type I have to do my climate acknowledgement:
I believe climate change is real and is one of the pressing concerns of our generation. I have spent years advancing low-carbon and zero carbon options and agree that we need to achieve a net zero economy, ideally well before 2050.
It is sad I have to do a climate acknowledgement but unfortunately, the reality of this topic is there are so many bad faith actors out there who insist that any data-driven discussion on climate change and its mitigation makes me an old school climate denier or part of the “New Climate Denialism”. I am, of course, neither so do the acknowledgement as a matter of rote.
My scientific area of interest has been evidence-based environmental decision-making and seeking pragmatic and effective reductions in our greenhouse gas emissions is an expression of that interest. Why is the last part important? Because a lot of the demands from the climate NGOs and activists will not reduce our greenhouse gas emissions. Rather, as I have pointed out, many of these ill-considered demands will increase emissions, decrease air quality, and increasing ecological risk.
Going back to the topic of this blog post. In his book the author insists that as part of our fight against climate change we need to eliminate the fossil fuel industry and I argue that the claim is ridiculous? Who is right?
Absolutely no one can deny that the vast majority of fossil fuel use involves using oil and its refined products as a transportation fuel or for the generation of heat or energy. According to the International Energy Agency (IEA) world oil demand is forecast to reach 101.6 million barrels a day (Mb/d) in 2023. Of that, transportation represents about 60% of total oil demand. But that leaves 40% of oil demand that is not from transportation.
The important thing to understand is that fossil fuels aren’t just a transportation fuel or a heat source. Fossil fuels are also the raw inputs for any number of technologies that are absolutely necessary to maintain our modern society. From pharmaceuticals, to petrochemicals, to fertilizer, to synthetic rubber, to carbon fibers to asphalt, fossil fuels are simply not replaceable given our current technologies and societal and ecological expectations.
Let’s start with the biggest user: pharmaceuticals and petrochemicals. The IEA has produced an incredibly useful document which details our reliance on petrochemicals called The Future of Petrochemicals. In this document the IEA indicates that currently we use the equivalent of 12 Mb/d for petrochemicals and that value is increasing as we look to build lighter vehicles, stronger plastics and more items from carbon fibers. From 2020 to 2040, BP expects plastics to represent 95 percent of the net growth in demand for oil (demand to increase by almost 6 million barrels/day). That is approximately 18 Mb/d of oil demand from petrochemicals and pharmaceuticals.
Recognize that most of this demand cannot be met through other sources. Petroleum hydrocarbons represent a massive natural bounty. They are the results of millions of years of solar energy converted into chemical form by plants and trapped in complex molecules that have been compressed to liquid form by huge geological forces. That process cannot be readily replaced with modern biofuels or other modern sources.
Another huge user of crude oil is asphalt. In 2019, global demand for asphalt was projected to be around 122.5 million metric tons (742.5 million barrels). That is better than 2 Mb/d of crude oil demand just for asphalt. Heavy oil is by far the best source of asphalt.
Another major demand for oil is for synthetic rubber. In 2021 the world used 26.9 million tonnes of rubber of which 53% was synthetic (derived from hydrocarbons). Rubber is another product that can be made via organic sources, but doing so increases risk to ecosystems from deforestation. The better ecological choice is via crude oil.
Adding up the various products, the demand for crude oil for non-energy, non-transportation uses will be around 20 million barrels of oil/day. That is 5 times Canada’s projected maximum production. That demand will continue to exist even once we have eliminated any transportation or energy demand.
So why is this important? Because we know the fossil fuel industry will be generating emissions to produce those 20 Mb/d and the countries that can produce their oil for the cheapest prices (including carbon taxes) while generating the fewest emissions will have an indefinite and ongoing market all to themselves.
As I have pointed out previously, Canadian oil sands produce very low cost oil, with a high asphalt component, and our existing production has an incredibly low depletion rate. We are ideally situated to be one of the last producers standing if we can produce net zero oil (and gas) to fill the perpetual oil and gas markets.
This brings us to the second half of our data-driven policy discussion. Were we to believe the faulty claims of the anti-oil NGOs then there would be no justification for developing technologies like carbon capture and storage or direct air capture of carbon dioxide. In fact, the activist community regularly argues we shouldn’t invest in these technologies. But as I have demonstrated above, there will be a tremendous ongoing demand for net zero crude oil for the indefinite future.
But the critical consideration is the “net zero” component. We need to invest right now in the technologies to turn our fossil fuel industry to a net zero one by reducing emissions at every possible step and developing tools to sequester or trap carbon to address the emissions we can’t eliminate. At our current price point we have a significant opportunity to permanently grab a slice of that ongoing oil demand, especially the heavy oil component which cannot be supplied by our most likely net zero competitors.
I am often asked, why do I appear to be supporting the fossil fuel industry with posts like this one? The answer is simple. You can’t solve a problem until you identify and diagnose the problem. The activist community has forwarded the idea that in order to effectively fight climate change we need to eliminate the fossil fuel industry. As I have shown above that demand is not possible. I am also an ecologist and a pragmatist and recognize that every action has a consequence. I want my kids to grow up in a society that still has healthcare, wildlands and a functioning ecosystem.
The fossil fuel industry is a necessary one and has the potential to provide reliable revenues for generations to come. But that will only happen if we ignore the anti-oil activists and develop the tools to get our oil production to net zero. Alternatively, we can do nothing and watch our industry die in the next 10-20 years and with it all the revenues that we currently use to pay for our social services and to help fight climate change.