Forget 1984…. 2020 is the apocalypse year

26 01 2017

The crescendo of news pointing to 2020 as the date to watch is growing apace…. it won’t be the year collapse happens, because collapse is a process, not an event; but it will definitely be the year this process starts to become obvious. To people other than followers of this blog at least…!

RIYADH, Saudi ArabiaAccording to the International Monetary Fund, Saudi Arabia’s economy is in danger of collapse as oil prices grow increasingly unstable.

The warning appeared in the “Regional Economic Outlook” for the Middle East and Central Asia published on Oct. 15, an annual report published by IMF economists. Adam Leyland, writing on Oct. 23 for The Independent, explained the grim prognosis for Saudi’s economy, which is almost completely dependent on fossil fuels:

“[T]he IMF said that the kingdom will suffer a negative 21.6 per cent ‘General Government Overall Fiscal Balance’ in 2015 and a 19.4 per cent negative balance in 2016, a massive increase from only -3.4 per cent in 2014.

Saudi Arabia currently has $654.5 billion in foreign reserves, but the cash is disappearing quickly.

The Saudi Arabian Monetary Agency has withdrawn $70 billion in funds managed by overseas financial institutions, and has lost almost $73 billion since oil prices slumped, according to Al-Jazeera. Saudi Arabia generates 90 per cent of its income from oil.”

AND……..

Tax-free living will soon be a thing of the past for Saudis after its cabinet on Monday approved an IMF-backed value-added tax to be imposed across the Gulf following an oil slump.

A 5% levy will apply to certain goods following an agreement with the six-member Gulf Cooperation Council in June last year.

Residents of the energy-rich region had long enjoyed a tax-free and heavily subsidised existence but the collapse in crude prices since 2014 sparked cutbacks and a search for new revenue.

Author Dr Nafeez Ahmed, a Visiting Fellow at Anglia Ruskin University’s Global Sustainability Institute, is making even more waves today, saying………:

“Syria and Yemen demonstrate how climate and energy crises work together to undermine state power and fuel terrorism. 

“Climate-induced droughts ravage agriculture, swell the ranks of the unemployed and destroy livelihoods.  Domestic oil depletion undercuts state revenues, weakening the capacity to sustain domestic subsidies for fuel and food.  As the state is unable to cope with the needs of an increasingly impoverished population, this leads to civil unrest and possibly radicalisation and terrorism. 

“These underlying processes are not isolated to Syria and Yemen.  Without a change of course, the danger is that eventually they will occur inside the US and Europe.”

Failing States, Collapsing Systems: BioPhysical Triggers of Political Violence, authored by Dr Nafeez Ahmed, published by Springer Briefs in Energy includes the following key points…:
  • Global net energy decline is the underlying cause of the decline in the rate of global economic growth.  In the short term, slow or absent growth in Europe and the US is complicit in voter discontent and the success of anti-establishment politicians. 
  • Europe is now a post-peak oil society, with its domestic oil production declining every year since 1999 by 6%.  Shale oil and gas is unlikely to offset this decline. 
  • Europe’s main sources of oil imports are in decline. Former Soviet Union producers, their production already in the negative, are likely to terminate exports by 2030.  Russia’s oil production is plateauing and likely to decline after 2030 at the latest. 
  • In the US, conventional oil has already peaked and is in sharp decline.  The shortfall is being made up by unconventional sources such as tight oil and shale gas, which are likely to peak by 2025. California will continue to experience extensive drought over the coming decades, permanently damaging US agriculture.
  • Between 2020 and 2035, the US and Mexico could experience unprecedented military tensions as the latter rapidly runs down its conventional oil reserves, which peaked in 2006. By 2020, its exports will revert to zero, decimating Mexican state revenues and potentially provoking state failure shortly thereafter.
  • After 2025, Iraq is unlikely to survive as a single state.  The country is experiencing worsening water scarcity, fueling an ongoing agricultural crisis, while its oil production is plateauing due to a combination of mounting costs of production and geopolitical factors.
  • Saudi Arabia will face a ‘perfect storm’ of energy, food and economic shocks most likely before 2030, and certainly within the next 20 years.
  • Egypt will begin to experience further outbreaks of civil unrest leading to escalating state failure after 2021.  Egypt will likely become a fully failed state after 2037.
  • India’s hopes to become a major economic player will falter due to looming food, water and energy crises.  India’s maximum potential domestic renewable energy capacity is insufficient to meet projected demand growth.
  • China’s total oil production is likely to peak in 2020.  Its rate of economic growth is expected to fall continuously in coming decades, while climate change will damage its domestic agriculture, forcing it to rely increasingly on expensive imports by 2022.

I wish Julian Simon could read this….. it seems all our limits to growth chickens are coming home to roost, and very soon now.





Peak fossil fuel won’t stop climate change – but it could help

26 02 2015

The Conversation

Peak fossil fuel means it’s unlikely the worst climate scenario will come to pass. Gary Ellem explains.

What happens to coal in China will play a big role in deciding which climate road we’re all on. Han Jun Zeng/Flickr, CC BY-SA

Fossil fuels are ultimately a finite resource – the definition of non-renewable energy. Burning of these fuels – coal, oil and gas – is the main driver of climate change. So could the peak of fossil fuels help mitigate warming?

The short answer is maybe … but perhaps not how you might think.

In a paper published this month in the journal Fuel, my colleagues and I suggest that limits to fossil fuel availability might take climate Armageddon off the table, although we will still need to keep some fossil fuels in the ground for the best chance of keeping warming below 2C.

But more importantly, the peak of Chinese coal use is changing the face of global alternative energy industry development, and is soon likely to impact on international positioning for a low-emissions future.

Now for the long answer.

Predicting climate change

Predicting future climate change is dogged by two fundamental uncertainties: the dosage of greenhouse gas that human civilisation will add to the atmosphere, and how Earth’s climate and feedback systems will respond to it.

In the absence of a crystal ball for the future of emissions, the Intergovernmental Panel on Climate Change (IPCC) has adopted a scenario-based approach which highlights four representative concentration pathways (or RCPs). These are named after how much extra heating they add to the earth (in watts per square metre).

The relationship between emissions, and temperature projections. IPCC
Click to enlarge

From these scenarios the IPCC has developed temperature scenarios. So the RCP2.6 scenario is expected to restrict climate change to below 2C, whereas RCP8.5 represents catastrophic climate change of around 4C by the end of this century, rising to perhaps 8C in the ensuing centuries.

Fossil fuels forecast

The key thing to note here is that the emissions scenarios are demand-focused scenarios that have been developed to reflect possibilities for potential fossil fuel consumption. They explore a range of scenarios that include increasing global population and living standards, as well as the possible impact of new alternative energy technologies and global emissions-reduction agreements.

Instead of examining demand scenarios for fossil fuels, our work has focused on supply constraints to future fossil fuel production. Our work is not a forecast of future fossil fuel production and consumption, but rather seeks to determine the upper bounds of the geological resource and how it might be brought to market using normal supply and demand interactions.

We developed three projections based on different estimates of these Ultimately Recoverable Resources (URR). URR is the proportion of total fossil fuel resources that can be viably extracted now, and in the future (this accounts for some resources that are technologically inaccessible now becoming extractable in the future). The low case used the most pessimistic literature resource availability estimates, whereas the high case used the most optimistic estimates.

We also included a “best guess” estimate by choosing country-level resource values that we considered most likely. We then compared the resulting emissions profiles for the three upper bounds to the published IPCC emissions scenarios, as shown in the figure below.

Our projections for fossil fuel supply (black) matched with emissions scenarios (colours). RCP8.5 is the worst, RCP2.6 the best. Gary Ellem
Click to enlarge

In comparison to the published emissions scenarios, we found that it was very unlikely that enough fossil fuels could be brought to market to deliver the RCP8.5 scenario and we would recommend that this be removed from the IPCC scenarios in future assessment reports.

Mining out the optimistic fossil fuel supply base could perhaps deliver the RCP6 scenario, however, our best guess limit to fossil fuel availability caps the upper limit of emissions exposure to the RCP4.5 scenario (roughly equivalent to a median estimate of 2C warming).

But even under the low resource availability scenario, it will be necessary to leave some fossil fuels untapped if we are to meet the conditions for the RCP2.6 scenario or lower (to have more than a 90% chance of avoiding 2C temperature rise).

To sum up, our supply side assessment suggests that even if the climate Armageddon of the RPC8.5 scenario were desirable, it is unlikely that enough new fossil fuel resources could be discovered in time and brought to market to deliver it. To be clear, there is still much to worry about with the RPC4.5 and RPC6 scenarios which are still possible at the limits of likely fossil fuel resources.

So a simple reflection on global fossil fuel limitation won’t save us … but nations don’t face peak fuels at the same time. A country-level analysis of peak fuels suggests the possibility of a very different future.

How China could shake the world

As part of our assessment we looked closely at the fossil fuel production projections for four countries including China, Canada, the United States and Australia. Of these, China is by far the most intriguing.

China has little in the way of oil and gas resources and so has established its remarkable industrial growth on exploiting its substantial coal resources. Our projections indicate that the rapid expansion in Chinese coal mining is rapidly depleting this resource, with Chinese peak coal imminent in the mid-2020s under even the high fossil fuel scenario, as seen in the projections below.

Various scenarios for China’s fossil fuel supply. Gary Ellem
Click to enlarge

China is well aware of this and is currently scrambling to cap coal consumption and develop alternative energy projects and industries. Its leaders understand that the alternative energy sector is really an advanced manufacturing sector, and have moved to position themselves strategically as the world leader in solar, wind, hydro, battery and nuclear technology construction and manufacturing.

As fossil fuels start to fail China as a path to economic and energy security, China will join other regions in a similar position, such as the European Union nations, which have largely depleted their fossil fuel reserves.

For these nations focused on alternative energy investment for energy and economic security, global action on climate change is strategically aligned with their industrial strength. We can therefore expect them to pressure for increasing global action as a method of improving their strategic global trading position. We may see the beginnings of this transition at this year’s international climate talks in Paris this year, but it will take a few more years for the Chinese shift to play out as they exploit the remainder of their coal resource and gain confidence in the ability of their alternative energy sector to scale.

The question then becomes “can the USA manufacturing sector afford to be out of these global alternative energy markets?”. Our guess is “no” and a global tipping point will have been reached in the alternative energy switch.

This is perhaps the most profound way that peak fuels may contribute to a low-emissions future.