U.S., Canadian Fossils to Lead $1.4 Trillion in New Oil and Gas Development Through 2024
Fossils in the United States and Canada are leading plans to invest another US$1.4 trillion in new oil and gas extraction projects over the next five years, even though the industry already has enough existing fields and mines to blow past a 1.5°C limit on average global warming and nearly exhaust the carbon budget for 2.0°C, according to an analysis released late last week by the Global Gas & Oil Network (GGON).
The new projects “would lock in 148 gigatonnes of cumulative carbon dioxide emissions, equivalent to 1,200 new U.S. coal-fired power plants,” GGON writes in a release. “The report reveals 85% of the expanded production is slated to come from the United States and Canada over that period. The other countries where the largest expansion is planned are Argentina, China, Norway, Australia, Mexico, UK, Brazil, Nigeria.”
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A four-page backgrounder to the report declares that “fossil fuel production is incompatible with global climate goals. Efforts to phase out oil and gas extraction must start now.” It notes that “capital expenditure in the oil and gas industry on new projects has risen since 2016, increasing production and carbon emissions. Over the next five years, oil and gas companies plan to invest at levels that would lock in more than 2.0°C of warming. This is the case even if the use of coal ends overnight and emissions from cement are dramatically cut.”
With the lion’s share of the threat located in North America, the backgrounder shines a light on the specific hot spots, beginning with the dominant shale field in the United States.
“The Permian Basin, spanning west Texas and southeastern New Mexico, is most at risk, as more than one-third of new production in the U.S. is intended for this region,” GGON states. “In Canada, emissions from planned Alberta oil sands and shale gas extraction, particularly in the Montney Shale Basin in British Columbia, pose the most threat to the climate. For Argentina, planned extraction in the Neuquén Basin of Northern Patagonia in the Vaca Muerta formation will quadruple the country’s cumulative emissions.”
But “other countries covered in the report are set for substantial expansion, as well. For example, Ecuador’s oil and gas emissions are predicted to grow 40%, and Norway’s 77% by 2050. Meanwhile, the UK’s current plan would see two and a half times more oil and gas than currently produced.”
The backgrounder notes that 25 international fossils account for about half of the expanded production, with Russia’s GazProm and purported climate leader Royal Dutch Shell taking the top two spots and ExxonMobil, Chevron, and Qatar Petroleum filling out the top five. Collectively, the top 25 have plans that would unlock 176.4 billion barrels of oil.
“Every major international oil company has sanctioned new oil and/or gas projects [that are] out of compliance with the Paris Agreement,” GGON says. “This includes companies which claim to be responding to climate concerns, such as Shell Oil, BP, Total, and Equinor.”
Last week, as well, a set of studies by the interdisciplinary CICERO Center for International Climate Research echoed GGON’s conclusion that countries have a long way to go to get fossil fuel emissions under control.
“A surge in natural gas has helped drive down coal burning across the United States and Europe, but it isn’t displacing other fossil fuels on a global scale,” InsideClimate reports. “Instead, booming gas use is fueling the global growth in greenhouse gas emissions.”
The projected increase of 0.6% “would be significantly slower than last year,” InsideClimate concedes. “But it would mark the third straight year of growth, after three years of stable emissions.” Crucially—and of particular interest to anyone promoting liquefied natural gas (LNG) exports driven by fracked natural gas from northeastern British Columbia—“the assessment does not include the methane emissions released by producing and shipping fossil fuels.”
“Globally, most of the new natural gas being used isn’t displacing coal, it’s providing new energy. That’s the key interaction, and that’s true for renewables even,” said Stanford University Earth system scientist Rob Jackson, lead author of one of the three reports. “We need renewables that displace fossil fuels, not supplement them.”
That’s a big problem, InsideClimate explains, because “each year of growth makes it harder and more expensive to meet the goals of the Paris climate agreement,” and “natural gas presents a particular challenge.” It’s been the main replacement for shuttered coal plants in the United States and Europe, prompting some fossil executives to begin calling gas a “forever fuel” that can grow for decades to come. That expectation, in turn, has triggered rapid growth in the global market for LNG, even though “Jackson warned that much of this growth is supplementing coal power generation, rather than supplanting it. In Japan, the vast majority of new gas imports since 2010 have replaced nuclear capacity lost after the accident at Fukushima, for example.”
Another concern is that the multi-billion-dollar price tag for a new LNG terminal will make it harder to cut emissions in the years ahead, with investors looking for a return on the dollars they poured into those facilities, InsideClimate says.
“I have strong concerns about the pace of our natural gas build-out in the United States and globally,” Jackson said, “because those facilities will be producing pollution for many decades.”
While CICERO sees some promise in the shift to renewable energy and greater reliance on energy efficiency, InsideClimate says solar and wind offset only one-sixth of the decline in coal in the United States, and the momentum globally has been limited. “It’s shocking in a way,” Jackson told reporter Nicholas Kusnetz. “I believe that wind and solar and renewables will help us turn the corner. We haven’t turned the corner yet, though.”