Introducing the Oil Climate IndexAnalyzing the Heterogeneous Lifecycle

Climate Impacts of Global Oils

Deborah GordonDirector, Energy and Climate Program

Carnegie Endowment for International Peace

Kennedy School of GovernmentHarvard UniversityDecember 3, 2018

Global Petroleum Demand

Oil and gas supply most of the “stuff” in our everyday lives

through a 20th

century, tightly woven value chain that has

found a use for nearly every molecule

The 1.5oC global

temperature threshold is a

tall order for oil

According to the Intergovernmental Panel on Climate Change (IPCC):“Global net human-

caused emissions of carbon dioxide (CO2) would need to fall by about 45 percent from 2010 levels by 2030, reaching ‘net zero’ around 2050”

Contending with the Petroleum Sector

Source: EIA, June 2018

After decades of decline and stagnation, U.S. oil & gas production is on the rise…

Oil & gas account for 75% of U.S. CO2 emissions

Est. 50 trillion barrels of oil

Oil & Gas Resources Are Not in Short Supply

Est. 40 quadrillion cubic feet natural gas

Massive stockpiles of conventional & unconventional hydrocarbons

remain in place worldwide that will likely last for centuries to come

Oil & Gas Resources are Very Heterogeneous

Different Oils, Different GHG Emissions

By assuming oil and gas are exhaustible resources and by treating the lifecycle climate

impacts of all petroleum resources alike, we miss a real opportunity to

reduce GHG emissions NOW

OCI 2.0 Demo Video

OCI 2.0 demo videos: http://oci.carnegieendowment.org/ - demovideos

OCI Phases of Development

Phase 1.0 (2015) – Form OCI partnership with researchers from Stanford and University of Calgary; model 30 global oils (5% global oil production); Find major variance in oils’ lifecycle GHGs and identify where in the supply chain emissions occur

Phase 2.0 (2016) – Model 75 global oils (30% total production); Confirm Phase 1.0 finding of a major variance in oil sector climate footprints

Phase 2.5 (2018) – Currently updating oil data; adding IEA World Energy Outlook 2017 country-level methane emission estimates

Phase 3.0 (2019) – In process to add ~40 global gases to the OCI and compare and contrast petroleum sector lifecycle GHGs

Climate Strategies using the OCIInformation, Transparency & Disclosure

Open source monitoring, reporting & verification

U.S. legislation: Know Your Oil Act (Rep. Huffman-CA) Global NGO: IEA World Energy Outlook (2019) Norwegian government: Reconcile industry with OCI

GLOBALOPPORTUNITIES

Climate Strategies using the OCIMarket Rules & Incentives

Engage investors and commodity

markets

Construct “smart” carbon taxes that price oil emissions according to lifecycle GHGs

Require financial disclosure of climate risks Guide institutional investing & divesting of oil and gas assets

GLOBALOPPORTUNITIES

Climate Strategies using the OCIRegulatory Action

Reform global standards

Canada: Suncor sequesters petcoke to reclaim ponds China & India: Bans on high-sulfur petcoke power generation US: Lift crude oil export ban – Congressional testimony California: NGO efforts to stop producing high GHG oils

GLOBALOPPORTUNITIES

Climate Strategies using the OCIInnovation & Technology Transfer

Industrial ecology leading to supply-side

innovations

Canada: Research Excellence grants for low CI oil processes California: major solar array in oil field applications UAE/Saudi: CO2 injection/sequestration demonstrations Global: Oil transition strategy tying together EVs & refining

GLOBALOPPORTUNITIES

OCI 2.0 Web Tool

OCI 2.0 web tool URL: http://oci.carnegieendowment.org/

Additional Slide

Petroleum alternatives depend on coordinated: • Technology• Economics• Infrastructure• Policy• Politics