Well here we are again, talking about oil. Oil, and other fossil fuels are the root of our problem; we can’t live with them, we can’t live without them. At least not yet.
But our romance with oil hasn’t been all bad. No other source of fuel, save nuclear power, provides us with more energy by volume or weight. Oil has made many people and countries fabulously wealthy, and lifted millions and millions of people out of poverty in the past hundred years or so.
Oil powers every aspect of modern society, from the fertilizer and machinery on the farm, to the factory that makes your food into tasty treats, to the food additives to keep it fresh, to the convenient plastic packaging, to the trucks that move food from farm to factory to supermarket, to the refrigeration and lighting at the supermarket, to the car that takes you to the store, to the stove that cooks your food, and to the truck that takes your trash away… it ALL runs on “cheap” energy from oil, gas, and coal.
Although “cheap”, the true cost is not paid today, but is coming due soon, and will be paid by you and by future generations. Beyond the immediate health impacts from ozone, ground water contamination, destruction of marine habitat, displacement of native people, wars fought, and so on, there is of course, climate change.
The burning of fossil fuels worldwide pumps over 35 gigatons of carbon dioxide into the atmosphere every year. That’s 35 BILLION TONS of an odorless, colorless gas pumped into the air EVERY year — 35,000,000,000 tons! What does just one “ton” of gas look like, let alone 35 billion tons? I have no idea, but it sure sounds like a lot — and it can’t be a good thing. I find it amazing that some people claim that us puny humans couldn’t possibly change the climate; that only the gods have that power. That’s magical thinking, not rational at all.
Another question I have… why does the most profitable industry in human history get taxpayer subsidies? In 2013, the top five oil companies made $93 billion dollars in profit; yes, another mind-boggling number. Despite this amazing success, we taxpayers PAID the oil companies to look for more oil to the tune of $5.2 billion dollars in the United States, and $88 billion world-wide. That sounds like corporate welfare; not a very “free market”.
(Check out The fossil fuel bailout: G20 subsidies for oil, gas and coal exploration, from the Overseas Development Institute)
Something is not right with that picture, especially when the bill for oil’s environmental costs is coming due. As mentioned in the last post, oil will become a stranded asset in the next few decades, meaning it will cost more to get out of the ground AND burn than it’s worth.
An excellent report by the Carbon Tracker Initiative and the Grantham Research Institute, called “Unburnable Carbon 2013: Wasted capital and stranded assets,” details from an economic perspective, carbon “budgets” that show just how much fossil fuels we can extract and burn, and still keep the world a livable place.
This type of budget is not hard to figure out. We know roughly how much oil, gas and coal is in the ground (proven reserves), and we know how much carbon dioxide is made when those fuels are burned. So you just have to multiply the amount of reserves by the amount of CO2 produced by burning those reserves, to get the total CO2 produced.
And because temperature increases at a certain rate for every unit increase in CO2, you can then figure out how much can be burned without going over a certain temperature. To be sure, there is uncertainty in these calculations, but not the kind of uncertainty that lowers temperatures. If anything, these are likely underestimates; like a lot of climate science, the truth is often worse than predicted.
( Data from Carbon Tracker Initiative / Grantham Research Institute )
It’s too late to keep the worldwide temperature increase below 1.5 C (~2.7 F). However, keeping the temperature increase below 2 C (3.6 F) is still possible, but we have to act soon. The later we start, the more drastic the changes will be.
So let’s add it up…
- there is already WAY more fossil fuel in the ground than can be safely burned
- any new discoveries of oil, gas and coal can not be burned
- old reserves and new discoveries are listed as assets on oil company financial statements
- if we can’t burn it all, then we have to stop extracting it
- and if we stop extracting it, then whatever is left in the ground is a “stranded asset”, AND…
- the financial statements of energy companies are wrong,
- money spent on exploring for new reserves is wasted,
- and taxpayer subsidies are also wasted.
Were not talking wasting a small amount of money either; $88 billion a year over the next ten years is close to a trillion dollars. Add that to the trillions of dollars of stranded fossil fuel assets, and we are talking an economic bubble of titanic proportions.
What can we do to change our direction and work towards a more sustainable future? Ultimately, it will take a fundamental restructuring of society and the human relationship with the environment. Which implies a shift away from an unfettered free market, towards a place where government sets limits on corporate power and personal consumption. Sounds a lot like socialism. And the longer we wait, the more “socialist” the change will be.
I’m not necessarily happy about it either. The Doc is more an independent and a Libertarian than anything, but nature, physics, God, call it what you will — does not give a damn about politics, left, right, or otherwise.
Divestment – “The process of selling an asset. Also known as divestiture, it is made for either financial or social goals. Divestment is the opposite of investment…. A notable example was the withdrawal of American firms from South Africa during apartheid.” (from Investopedia.com)
If you think it’s time for a change, here are some things YOU can do…
Here are three great resources about divesting from fossil fuels.
- From Grist, “How to divest from fossil fuels no matter the size of your piggy bank“. Gives advice for where middle-class folks can put their money, including a list of financial planners that are “green”, and fossil-free mutual funds. I have no opinion about the companies or funds they suggest, but it’s a good place to start your own research.
- From 350.org, “Extracting Fossil Fuels From Your Portfolio: A Guide to Personal Divestment and Reinvestment.” This nice little piece of work that offers real suggestions to invest your money in sustainable growth. Again no opinion on the companies, do your homework. 😉
- From gofossilfree.org, “6 reasons to sign up for Global Divestment Day (now, not later).” Global Divestment Day will happen February 13 – 14, 2015. The gofossilfree.org site is all about fossil fuel divestment and is a great source of info and updates.
- Here’s something I do… check with your power company to see if you can switch to green power. Right now I buy 100% wind energy to power my house. It costs a few pennies more per kilowatt-hour, but it’s worth it. I use and recommend this company… Champion Energy.
So to summarize…
- oil has been an incredible source of wealth and has lifted millions out of poverty
- we are dependent on fossil fuels for EVERY single aspect of modern society
- the oil industry has been one of the most profitable business of all time
- however, taxpayers around the world still subsidize oil companies to the tune of $88 billion a year
- oil and other fossil fuels will soon be a stranded assets, as the true costs are added up
- if we burn more than our budget of fossil fuels, the earth will warm more than 2C
- you can make a difference now by divesting from fossil fuel investments
Thanks for reading. If you have any thoughts, please comment below.
Coming up next, a review of some excellent books, a look at how we can have such cold winters and global warming at the same time, and why is 2 degrees centigrade the line in the sand that we don’t want to cross. I’m as interested to find out about that last one as you are… so please stay tuned.