Posted by Big Gav in global warming
Jeff Rubin has a post on the latest IPCC report - Why energy producers need to pay heed to global warming.
The world’s top climate change scientists are now 95 percent certain that humans are responsible for global warming. That’s the headline takeaway from the latest findings by the Intergovernmental Panel on Climate Change. Global temperatures are the hottest since the last ice age and the planet is only getting warmer.
What to make of this news? On one hand, it’s likely not much of a surprise to most of us. Extreme weather events like superstorm Sandy are becoming more commonplace. Glaciers are melting, drought is gripping more parts of the world, and the amount of Arctic sea ice shrinks more each year.
A warming planet clearly holds profound consequences for us all, but one group that should by paying particular attention are the world’s energy producers. The details of the IPCC’s findings take direct aim at the long-term value of fossil fuel reserves.
The IPCC has put new numbers to the planet’s so-called carbon budget. To limit the rise in average global temperatures to 2 degrees Celsius from preindustrial levels, the IPCC says we can burn no more than 1 trillion tons of carbon. The bad news is that we’ve already combusted more than half that amount. At our current rate of fossil fuel consumption, we’ll burn through the rest in less than three decades.
Global energy producers have already found more than enough reserves to ensure we can blow past this mark without breaking a sweat. Even after using up our carbon quota, it’s estimated the world will still have 2.5 trillion tons of carbon waiting to burn. Every year, moreover, producers add to global reserves, whether through unlocking natural gas shale formations, oil sands bitumen plays, or drilling deep into the ocean floor. It’s worth asking, though, are these carbon reserves really valuable resources or will they end up as stranded assets ?