As the various interests trying to promote the continued development of Alberta’s energy sector amidst changing global markets and the need to move to a carbon-constrained future, one is bound to find a number of arguments that are inherently self-serving and containing falsehoods (such as the fiction that Andrew Scheer and Jason Kenney keep trying to promote that somehow Alberta energy can reduce the environmental footprint in China and India, and that we can take their emissions credits for it). Energy economist Andrew Leach found another one promulgated by the Canadian Association of Petroleum Producers (which I will remind you is an organization that has gone so far to the one side that major players like Royal Dutch Shell have withdrawn from the group, because they understand the need for mechanisms like carbon pricing).
I've found a piece from @OilGasCanada which illustrates everything that's wrong with how we talk about energy and oil demand, emissions, and energy transitions. I'm told it's important that we fight misinformation with respect to our oil industry, please allow me to do so. 1/N
— Andrew Leach (@andrew_leach) January 17, 2020
There are 3 central claims in the piece:
1) energy demand will increase through 2040;
2) Use of renewables will increase significantly;
3) More oil and more natural gas will be needed through 2040.They buttress these claims with a cite to the @iea Stated Policies scenario. 3/N
— Andrew Leach (@andrew_leach) January 17, 2020
So, dear reader, what you might be given to understand is that the changes in energy supply depicted in the infographic correspond to a lower carbon scenario. Unless lower doesn't mean what I think it means, that's not the case. 5/N
— Andrew Leach (@andrew_leach) January 17, 2020
If you'll check Stated Policies on the left, you'll notice something interesting. Yes, energy demand goes up, and yes we use a lot of oil and gas, but there's that pesky orange line through the middle of the figure which, in my professional opinion, is not decreasing. 7/N
— Andrew Leach (@andrew_leach) January 17, 2020
So, what the IEA says is, if you want to think about a lower carbon future, don't look to Stated Policies because it's not going to do the trick. The IEA suggests that you have a look at the Sustainable Development Scenario. So, let's do that. 9/N
— Andrew Leach (@andrew_leach) January 17, 2020
The WEO has more detail on each commodity, so let's look specifically at oil. In their lower-carbon world, they explain that, "oil demand peaks very soon […] and falls back to 67 mb/d by 2040, a level last seen in 1990." That's doesn't sound like more oil, does it? 11/N pic.twitter.com/FDZ6ccfaCE
— Andrew Leach (@andrew_leach) January 17, 2020
Here's some backup from outside the WEO. Gas demand is certainly much more uncertain than oil in scenarios consistent with the WEO lower-carbon runs. There are, among those model runs, 2C and even 1.5C scenarios with higher gas demand than we see today. 13/N pic.twitter.com/63Zk1Odhq5
— Andrew Leach (@andrew_leach) January 17, 2020
That said, remember that lower oil production does not equate to no new oil investment. Decline rates of existing assets exceed the decline in demand associated with increased climate action. So, don't @ me with your hot takes on pipelines or upstream investment. 15/15 pic.twitter.com/Gnh2eqv6F8
— Andrew Leach (@andrew_leach) January 17, 2020