Stop digging: Countries move to end fossil fuel exploration
By Dr Helena Wright, E3G
Those with an eye on energy and climate issues will have noticed a series of countries recently putting a stop to oil exploration. President Macron of France has set the trend by banning oil and gas exploration last year. This was followed by an announcement from Belize to ban oil exploration to protect its coral reefs, as well as plans to rule out exploration in Ireland. Costa Rica already had in place a ban on oil exploration and extraction until 2021. Last month, Denmark joined the club, announcing an end to exploration and drilling for oil and gas, although the announcement only refers to land and inland waters
Exploration of new oil and gas threatens to push the world over dangerous climate tipping points.
The world already has more than enough fossil fuels to push us well beyond the globally-agreed limit of well below two degrees Celsius. Estimates of fossil fuel resources are highly uncertain, but some estimates have found that if the world’s fossil fuel resources were fully extracted and burned, could raise global temperatures by over 6 degrees of warming. That level of warming is not just uncomfortable – it would be catastrophic.
More than half the world’s oxygen relies on plankton in the ocean and high levels of warming could disrupt that oxygen supply and lead to mass extinction. On top of this, the oceans are getting more acidic which can kill plankton. Much like ocean plastic, fossil fuel exploration is a threat which, without exaggeration, could destroy the systems we rely upon for the existence of life on earth.
Fortunately, an end to fossil fuel exploration can now be seen as a new international ‘norm’.
Donald Trump has recently been trying to push in the other direction, with plans to allowing oil drilling in areas that in some cases had been off limits for decades. After pleas from the Governor of Florida who was concerned about the impact on tourism, it was announced that Florida would not be subjected to oil drilling.
However, what does this mean for the dozens of other coastal states in the US who have expressed their opposition to oil drilling, and other places which rely on tourism?
Beyond risky: Financial institutions take the lead
The insurance industry is taking a lead in recognising that investment in fossil fuels is going beyond ‘risky’. The insurance giant AXA recently said it will stop insuring controversial oil pipelines and tar sands – a milestone which has arguably taken fossil fuel divestment to the next level. The insurance giant Swiss Re has also limited its underwriting of shale gas, tar sands and Arctic drilling projects.
Fossil fuel exploration had always been a risky business. This is why public institutions such as Asian Development Bank and African Development Bank already ruled out exploration – not for environmental reasons, but citing the financial risks, and the fact this is not a good use of public funding. The World Bank Group recently followed up by ruling out upstream oil and gas exploration, as called for by the Big Shift Global coalition. Other public banks must also do the same.
Quite simply, fossil fuel exploration needs to be put in a similar category as coal-burning as an activity to be stopped completely. While you could argue that some parts of the fossil fuel sector have a future beyond the next decade or so, if we are serious about having a liveable planet for future generations, there is a need to stop digging for new reserves.
What’s more, as oil and gas are becoming ever-harder to find, the methods of exploration get riskier still. We all saw the impacts of the BP Deepwater Horizon oil spill in New Mexico - contributing to ocean dead zones. Deep sea exploration poses huge risks and a hidden price tag for governments who permit it.
The oil industry is continuing to use riskier techniques due to the scarcity of conventional supplies. Mining of tar sands involves injecting steam into deep deposits underground. Extracting oil from shale rock – known as ‘fracking’ – also involves injecting fluid into the ground, using up large volumes of water.
Reaping the rewards of a green economy
The countries that move away from this approach first and green their economies faster will reap the benefits, gaining a first mover advantage.
Smart grids, renewable energy systems, and electric cars are now viable alternatives. The cost of renewable energy is falling fast, and in many cases, renewable energy is already cheaper than fossil fuels. Despite this, there is evidence that governments are propping up fossil fuel exploration with public money.
Macron's strategy is not only 'green' leadership - this is a smart economic strategy. France is preparing its economy for a new future powered by clean energy - leading the way in the absence of US leadership.
What’s more, making this transition early has benefits for the economy, including exporting new clean technology to other countries and boosting green growth. Beyond the damage to the planet, there is evidence that some fossil fuel assets will become ‘stranded assets’, making current investment in fossil fuel exploration obsolete. There is evidence that the conventional projections by the International Energy Agency have been too conservative about the transition to a lower carbon economy.
What remains is a question of - which country will stop digging next?
Dr Helena Wright is a Senior Policy Advisor at E3G