Archive for November, 2009

As the world turns its attention to Copenhagen, the most asked question is “What do you think will be agreed?”. The reality is nobody knows what will happen but given the political announcements of recent weeks expectations are dropping. We have all been told that a “legally binding” agreement will not be completed in Copenhagen, but rather to expect a major step forward or a “political agreement”.

When all is said and done, Copenhagen will almost certainly represent a landmark in the progressive shift to a global low carbon economy. Whether the final agreement is reached there or 6-12 months later is of little consequence, provided clear direction comes in December. We shouldn’t forget that the signing of the Kyoto Protocol led to many years of discussion and that the agreement itself was not finally ratified until 2005, some eight years later. Although we cannot wait eight years this time around, a delay into 2010 to allow a more substantive agreement to be reached is acceptable, perhaps even desirable given the current state of deliberations in the US Senate on the cap-and-trade bill.

But much still needs to be achieved in Copenhagen.

First, the delegations must reach agreement on overall structure. This is really an essential part of the process, but gets very little coverage in the media. The Kyoto Protocol has no formal end so the discussion regarding future commitment periods continues to roll on, but of course without the USA. In parallel, the AWG-LCA (Ad-Hoc Working Group on Long-Term Cooperative Action) is negotiating a text which could be adopted as a new international agreement – but what of the Kyoto Protocol if that were to happen. Many developing countries have reacted negatively to its demise, but equally it is unsustainable in its current form given the small number of countries with specific targets. This may have seemed appropriate when discussions commenced in 1992, but it is not an appropriate fit for the reality of today.

But the Kyoto Protocol shouldn’t just be discarded. The key elements that lay the foundation for a market based approach need to be extracted and adopted into the new structure. Without this infrastructure the broader premise that carbon markets will be a key component of a future agreement will have no foundation. Nor is it likely that these will be recast from scratch – it will just take too long.

By the end of the Copenhagen meeting we may well have some sort of announcement regarding international action, but if it doesn’t include something about the Kyoto Protocol, it’s future and the framework within which a new agreement will sit, it is hard to see how that new agreement will emerge at future meetings. Hard though it may be, Copenhagen is the time and place to deal with this issue.

Second, there must be clear recognition that the end-game requires all parties to adopt absolute targets, which means the focus must be on the transition for developing countries from their current status to a future one bound by emissions limits. For some countries such a move can come in the near future, for others it could be some decades away. Transitionary financial and capacity building measures will be critical.

Finally, an emissions reduction pathway must be agreed and devolved to national / regional level. Today there seems to be broad agreement that a two degree target is where the world is going, but this isn’t a compliance based target. At best it is a loose guideline for domestic action, but it is wide open to interpretation. Like it or not, the only thing we can control is the amount we emit and nothing else. With that done comes an adpatation strategy. So an agreement that confirms the two degrees but does little to translate it into a global emissions pathway is of limited value.

The reality is that we know what has to be done, we know the timeline we have to do it in and although there remains much room for innovation we also know we have the necessary technology base to deliver the required reductions.

There is no impediment remaining other than self interest and nationalism. These will have to be set to one side in Copenhagen and beyond

A glass half full . . .

Following on from my previous post, I spoke at the opening lunch of Singapore Energy Week on the same subject  – a trillion tonne carbon budget. The core of the story went something like this.


The starting point is a trillion tonne “glass”, now just over half full with industrial revolution carbon (data from IEA and CDIAC), coming both from fossil fuels and deforestation (in reality it is probably worse than this as my simple analysis did not include the other greenhouse gases). The world is filling the “glass” at an increasingly rapid rate and it is now over half full.

Glass half full

If the world continues to fill the “glass” through to 2100, with emissions growing at 1% per annum (as an example – but energy related CO2 emissions have increased at 2% p.a. over the last 40 years – but have dropped by some 3% in the last 12-18 months) then we end up with some two trillion tonnes of carbon emitted since 1750, well above the trillion tonne level that equates to a 50% chance of hitting 2 degrees C – in other words, “two glasses completely full” and a world quite a bit warmer than 2 degrees C.

Two cups full

In reality, the current global hydrocarbon reserve picture does not fully support such a simple proposition. Using the oil, oil-sands, gas and coal reserves data in the BP Statistical Review of World Energy 2009 and assuming that all those reserves are consumed, together with assumptions on the growth in cement manufacture  and continued land use change, the carbon situation looks more like this – two “glasses”, each not quite full.

Contribution to the cups

I then turned attention to solutions with a focus on the largest overall contributor, coal. Today there is some 1000 GW of coal fired power generation, producing about 8 billion tonnes of CO2 per annum. According to the International Energy Agency, emissions are growing at 6% p.a.  The chart below shows growth is accelerating rapidly in China, but also in the rest of the world outside North America.

Coal Fired Emissions

If we assume that emissions from coal fired power stations double by 2050, then plateau for the remainder of the century, then this alone fills the trillion tonne “glass” from where the world is today. Coal reserves can more than support such a move although it will be a challenging level of production.

One approach is to look to carbon capture and storage  (CCS) for a solution.  CCS represents a safe and sustainable approach for dealing with CO2 emissions and is based on a family of technologies all in use today. Although large scale end-to-end demonstration needs to happen urgently, deployment need not be some distant dream.  As a thought experiment, what if we started building all new coal fired power stations with CCS and either retrofitted with CCS or replaced all existing coal fired power stations by 2050. The global carbon story through to 2100 would change radically and look something like this – a “glass and a bit”, so still not there, but a huge improvement.

Rapid deployment of CCS

This is a pretty heroic assumption, but nevertheless points toward a solution, or at least part of it. In reality we have to do much more, but the focus need only be in five areas. They are;

  1.  More efficient use of the energy sources that are available;
  2.  Increased use of renewable and nuclear sources for the provision of energy;
  3.  Carbon dioxide capture and geological storage in tandem with the use of fossil fuel sources for the provision of energy [or with the chemical conversion of fossil derived materials for the provision of various manufactured products];
  4.  Containment, destruction and reduced usage of greenhouse gases other than carbon dioxide;
  5.  Reducing emissions through land use, land use change and forestry, including reducing emissions from deforestation and degradation.

I concluded with some discussion on the policy measures necessary to do all this, which I have discussed in many previous postings.

One day in early 2045


This week I managed to stay a bit closer to home and met up for lunch with Dr. Myles Allen of the Department of Physics (Atmospheric, Oceanic and Planetary Physics) at the University of Oxford.

Although we have probably all understood the bit about the “area under the curve” when it comes to CO2 emissions, Myles and his team have brought a whole new dimension to the issue with a recent article in Nature. The core of the arguement is that simply emitting carbon dioxide slower will not address the  issue of climate change unless it involves phasing out carbon dioxide emissions altogether, before we reach an upper limit of one trillion tonnes of carbon.

According to Myles the risk of exceeding the EU stated target of 2 degrees Celcius is primarily determined by the accumulation of carbon dioxide emissions over time, not by short-term emission rates. He has shown that total cumulative emissions of one trillion tonnes of carbon (1 Tt C, or 3,670 billion tonnes of carbon dioxide) over the entire ‘anthropocene’ period 1750-2500 causes a most likely peak warming of 2 degrees Celsius above pre-industrial temperatures. Of this budget, emissions to 2009 have already consumed approximately half (0.5 Tt C).

You can track the “progress” (hardly seems the right word for this) of global carbon emissions on his website. As of today 532 billion tonnes of the trillion tonne budget have been consumed. Extrapolating emission rates forward leads to the forecast that the trillionth tonne will be emitted sometime in the late first quarter of 2045 (although the website shows this moving forward all the time). All this means we have 468 billion tonnes left – which might sound alot, but carve that up amongst 200 countries with populations ranging form 1.4 billion down to a few thousand and it presents quite a problem.

The EU and the USA are already in the process of carving their bit out. Have a look in Waxman-Markey and add up the number of allowances to be issued into the US economy between 2012 and 2100 (from 2050 onwards one billion tonnes of CO2 per annum are allowed) and it comes to 50 billion tonnes of carbon (which doesn’t even account for the whole economy, but most of it). This represents nearly 11% of the total remaining carbon emissions for some 5% of the global population.

Whilst this is a huge reduction from current US emissions (which, according to the IEA, account for some 20% of global energy related CO2 emissions), it of course raises the difficult question of equity. Add to this the fact that US and EU economies will be able to emit more as they purchase offsets from other countries. This in turn raises the issue as to the nature of offsets. In order to keep this system whole all offsets should really only be sequestration based – i.e. a tonne stored away for every tonne emitted. That means forestry and carbon capture and storage and that’s all, although GHG destruction should probably also qualify. By 2050 of course we may also be talking about a tonne removed from the atmosphere, but that will still have to be sequestered somewhere as well. There is a certain irony here in that neither forestry nor CCS qualify as offsets under the EU-ETS today – in the case of forestry it is because the EU doesn’t want to allow it and in the case of CCS because the international community won’t allow it to qualify under the CDM.

Another aspect to all of this is that very long tails of low emissions can’t be allowed. Waxman-Markey does an excellent job of driving down US emissions to very low levels by 2050, but then has a billion tonnes of CO2 remaining indefinately, i.e. a very long tail. Over time that continues to accumulate which just adds to the problem. As I have noted in a previous posting, the last 20% is indeed problematic, but under a trillion tonne scenario it cannot be. As it will be extraordinarily difficult for an economy to get to zero emissions, the solution will doubtless be net zero emissions, which could mean sequestering a tonne of CO2 from the atmosphere for every tonne emitted, either by direct removal or by gasification of biomass to produce electricity with the resultant CO2 being stored.

This will indeed be a brave new world.

Peak oil, peak transport

Recently the Guardian newspaper in the UK launched into that much discussed topic of peak oil  in response to a recent report Heads in the Sand issued by Global Witness. I will pass on the topic of peak oil, but look more at the energy use solutions that we should be thinking about to better manage demand for oil. The Guardian article concludes with a discussion about the need to “go hell for leather for renewable energy sources”. Whilst this may well be needed as part of the overall global need to meet growing energy demand, it won’t necessarily address the issue of oil demand.

In my view, the key to oil demand  lies with transport, not really with overall energy demand. Over the past 35 years the percentage of the usable barrel of oil (oil less processing energy less bitumen/asphalt demand) going to transport has risen from 41% to 61%  and continues to increase (see figure). Increasing amounts of the heavy end of the barrel are being upgraded to transport fuels even as heavier and more difficult crudes make up more of the overall oil supply available. The only real transport fuel that “leaks” out of the system and into the broader energy arena is gasoil. It’s use is split between residential, commercial and agricultural sectors for heating, small generators, construction equipment and so on. Some gasoil is also used for electricity generation but with pressure from the transport sector this will slowly be returned, although it only represents about 5%  of global demand for gasoil in transport.

Source: IEA & BP Statistical Review of World Energy Use

Source: IEA & BP Statistical Review of World Energy Use

Some 20 years ago when I first worked in Shell Trading and was involved in the trading of Far East crudes, I remember that quite a bit of heavy Indonesian crude went to Japan for burning in power generation. This type of activity just doesn’t happen today – it is predominantly used for transport.

Oil and transport are inextricably linked. To manage oil demand we have to get a grip on the transport system.

In the short term the answer must lie with energy efficiency in transport, particularly road transport. Although electrification will start to shift transport energy demand across into another sector, the rate at which this will happen is limited (see earlier posting). But efficiency, both in the vehicles we use and the way in which we use transport is available today. In addition, we can also supplement the transport fuel pool with biofuels and although this is happening faster than electrification, it will also have its short term limits as well, at least until some more advanced bio technologies arrive on the scene.

Right now there is a unique opportunity at hand to address energy efficiency in transport. Vehicle production has suffered dramatically as a result of the financial crisis so that could well mean a surge in demand over the coming few years as those who put off a car purchase catch up. If government policy encourages a more efficient choice of vehicle, we will all ultimately benefit.