Paper citation: Welsby, D., Price, J., Pye, S., & Ekins, P. (2021). Unextractable fossil fuels in a 1.5°C world. Nature.
The recent publication of the IPCC Assessment Report 6 on climate science again underlines the urgency of reducing emissions to avoid the worst impacts of climate change. This means a rapid reduction in the production and use of fossil fuels. In a new paper published in Nature, we estimate the fossil fuel reserves that will need to remain unextracted in order to limit global temperature rise to 1.5°C. This builds on the seminal work in 2015 by McGlade and Ekins[1], also supported by UKERC, that explored a similar question for a 2°C limit.
We find that nearly 60% of global oil and fossil methane gas and 90% of coal reserves, must remain unextracted. This almost doubles the estimate for oil in McGlade and Ekins, reflecting the increased climate ambition of the 1.5°C limit. For global production of oil and gas, this must peak now, and then decline at an average of 3% every year out to 2050.
The implications for fossil fuel-producing countries are striking. For those most dependent on fossil fuels such as the Middle East, oil production levels need to half in 30 years, while the USA sees a 90% reduction in gas production. All major producing regions see significant declines. The analysis also estimates that the vast majority (99%) of unconventional oil should not be extracted at all, and there should be no production from currently undeveloped fields in the Arctic.
Despite the radical reduction in fossil fuel production, we highlight in the paper that our estimates of unextractable fossil fuels are likely underestimated. This is because of the large uncertainties in deploying at-scale carbon dioxide removal (CDR) technologies in this scenario, plus the use of a carbon budget that only provides a 50% probability of limiting temperature to 1.5°C.
While this research highlights what is required by science, it is evident that we are a long way from the types of production decline implied in this paper. Under current production plans, the UNEP Production Gap report[2] estimates planned production at 120% higher in 2030 than what would be consistent under 1.5°C. How then to effect change?
Investors and other funding organisations need to recognise that further investment in fossil fuel extraction is not climate compatible. In addition, such investments will start to look increasingly problematic as countries get serious about addressing climate change. Transition risks including falling fossil fuel demand driven by clean energy technologies, and increased pressure on production-based activities, could see increased stranding of assets.
Governments and other decision makers will need to adopt both policies targeting production activities in addition to those focused on reducing demand for fossil fuels. This means action such as directly banning new fossil fuel extraction activities alongside regulations to ban fossil-using technologies such as ICE vehicles. Building alliances internationally will also be important, such as that by Denmark and Costa Rica on restricting new extraction activities. Although relatively small players, this type of alliance could build momentum, and be one that larger players can join in the future.
Given the rate of reduction, there are fundamental questions around how a managed decline of fossil fuel production can be realised, particularly for countries where hydrocarbon revenues form a significant proportion of the national economy. It will be critical that support is provided by developed countries to those most dependent, so that there is buy-in to diversify away from oil and fossil gas. This fundamental shift in the energy system needs to be seen as a just transition that aids those most dependent and least able to shift away.
[1] McGlade, C., & Ekins, P. (2015). The geographical distribution of fossil fuels unused when limiting global warming to 2 C. Nature, 517(7533), 187-190.
[2] SEI, IISD, ODI, E3G, and UNEP. (2020). The Production Gap Report: 2020 Special Report.