The best way to reduce greenhouse gas emissions from the US oil industry is not by limiting oil production but by reducing demand, according to a US think tank.
In a recent research paper, the Brookings Institution said the latter is more difficult than protesting specific projects or companies, as it would involve “changing the system through which we use energy.” In the case of oil, it mainly “involves changing how we power our transport system” from petrol and diesel to electricity for most of our road transport. “It could also involve redesigning our cities and lifestyles, making more efficient forms of transport viable and attractive,” the paper added.
The paper argues that without changes to the transportation system, canceling specific projects or limiting US oil production will only shift emissions elsewhere, rather than reduce them. “The United States is not the world’s marginal oil producer, meaning that eliminating a project in the United States will not significantly reduce global oil production. Oil is abundant, fungible, and easy to transport, and other producers can easily step in to meet oil demand if the U.S. does not. U.S. energy security will also suffer if the U.S. cuts domestic oil production faster than demand,” states the paper, which explains that “the United States would lose the security benefit of producing the fuel domestically without a reduction in global greenhouse gas emissions.”
The paper said that “pushing cuts in US oil production is like squeezing a balloon: production will pop” elsewhere. Oil is abundant and easy to move around the world, in other words, production is expendable.”
The Brookings paper cited the Willow oil production project on Alaska’s North Slope as a high-profile project that has drawn attention from climate activists, who have called the project a “carbon bomb.” However, the document stresses that if the Willow project does not go ahead, the avoided production would be added to the global market by producers in another country. In addition, “high-profile projects by oil companies that are household names get attention, while domestic oil companies operating in distant regions receive little or no attention when they decide to increase production,” the paper notes, noting the Tilenga project in Uganda and the Eridu project in Iraq will come online soon and produce approximately 190,000 and 250,000 barrels of oil per day, respectively. The latter project is about 40 percent more than the Willow project, the document noted.
“In a world where oil is abundant and technologies to replace it still have a long way to go in terms of market penetration, policies that focus on reducing oil demand by driving innovation and adoption of new technologies are probably the most effective.” The paper said, adding that “eliminating domestic oil production without an equally ambitious focus on demand will only increase US imports, rather than reduce consumption. This could have unintended consequences and worse outcomes for the economy and the climate”.
“Calls on the political right for endless oil production, a lack of regulation of US oil production, and no policies to reduce oil demand are also clearly misguided. In general, climate policies that recognize that the demand for oil must decrease, but they will not do so overnight, they will yield better results overall, in terms of reducing emissions with minimal economic pain,” the document continues.
The paper suggested three actions the US can take to reduce demand for oil as well as emissions: tightly regulate US oil production, particularly with regard to methane emissions and fracking; enact policies to reduce oil use; and involve energy companies in the low-carbon transition.
The Brookings article was authored by Samantha Gross, director of the organization’s Energy Security and Climate Initiative and Foreign Policy Fellow.
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