1. Peak oil meets climate change The numbers game of the century Jeremy Leggett

2. US-48 USA 48 production 1956 Hubbert predicts US production peak in 1971

3. US-48 USA 48 production 1998 Campbell & Laherrere: the first oil industry early- toppers speak out

4. Late Toppers: Topping Point (peak of production) in 2030s  “Forty years supply at least” (Lord Browne, 2004) Believers:  most oil companies and OPEC  almost all financial analysts & journalists  all governments and agencies, e.g. IEA Implications:  economies can continue growing in principle  there will be time to develop alternatives Everyone agrees oil is finite There are two views of quite how: 1

5. Early Toppers: Topping Point (peak of production) this decade …and the market will wake up to this soon Believers:  a growing number of dissident experts …….mostly oil company geologists  some financial analysts & journalists  some futures traders Implications:  economies will be dislocated  there will be no time to develop alternatives Everyone agrees oil is finite There are two views of quite how: 2

6. The Peak Oil stakes: summary “A serious demand-supply discontinuity could lead to worldwide economic chaos.” DoE Office Naval Petroleum & Oil Shale Reserves, 2005 “We are not good at recognising distant threats even if their probability is 100%. Society ignoring this is like the people of Pompeii ignoring the rumblings below Vesuvius.” James Schlesinger, former US Energy Secretary, 2005

7. Leggett’s qualifications on this issue Geologist consulting in the oil industry, 1980–1989 –Research funding from BP, Shell, among others, at Royal School of Mines, Imperial College, including for oil source rock studies and seismic stratigraphy. –Taught on petroleum geology and engineering undergraduate and postgraduate courses. –Exploration and consultancy with Hydrocarbon Development Institute of Pakistan, Japan Petroleum Exploration Corporation among others. –Two major international awards for research from the premier UK professional body for geologists, the Geological Society. Environmental campaigner (energy), 1989-1996 –At the international Climate Convention negotiations and the Intergovernmental Panel on Climate Change. Renewable energy industry executive, 1997-present –Founding director of world’s first renewable energy private equity fund, Bank Sarasin’s New Energies Invest AG, 2000-present. –CEO of UK’s largest independent solar solutions company 1999-present. –Member of UK Government’s Renewables Advisory Board 2001-2006.

8. Real Discovery Trend 0 10 20 30 40 50 60 1930195019701990201020302050 Gb Past discoveryFuture discovery Past production World Expectation of future production ?

9. Real Discovery Trend 0 10 20 30 40 50 60 1930195019701990201020302050 Gb Past discoveryFuture discovery Past production World Expectation of future production Future production

10. Dwindling discovery Statistics for “giant” oilfields of 500 million barrels of more Context: at >80 million barrels per day current global demand, 500 mb is less than a week’s global supply In 2000 there were 16 discoveries In 2001 there were 9 In 2002 there were just 2 In 2003 there was 1 In 2004 none In 2005 there was 1 Source: Petroleum Review

11. The demand /supply challenge summarised We need 2-3 million barrels per day more each year (c. 1.8% growth rate) We are depleting at 4-5 mbd each year So in total we need to find 6-8 mbd of new oil each year ….one Saudi Arabia every year and a bit ….How did we do in 2005? 3.7 mbd “It can’t be done indefinitely. It’s not sustainable.” Sadad al-Husseini, former head of Exploration and Production, Saudi Aramco, August 2005

15. Second energy crisis 1979 to 1981 1965197019751980198519901995200020052010 $80 $60 $40 $20 ? 1 2 3 4 5 6 prices of the day 2003 prices Peak oil

16. Second energy crisis 1979 to 1981 1965197019751980198519901995200020052010 $80 $60 $40 $20 ? 1 2 3 4 5 6 prices of the day 2003 prices Peak oil

17. A quarterly audit of 2006 Climate changeOil depletion Threat of “explosive” Greenland ice collapse: 10 years to act, says NASA Kuwait fears only half its reported reserves are real …& may not produce them! Lloyd’s warns climate change can destroy the insurance industry Oil sands companies turn to mergers as costs spiral out of control Ocean acidification is killing corals, US govt agencies warn BP faces criminal court over corroding pipelines & exploding refineries US Supreme Court will rule on emissions case brought by states IEA warns non-OPEC oil will soon peak & current energy course is “doomed to failure” CO2 concentrations > long- run average: fear of runaway effect Russia: oil-and-gas nationalism now overt and rampant Q1 Q2 Q3 Q4 1.07

18. A quarterly audit of 2006 Climate changeOil depletion Threat of “explosive” Greenland ice collapse: 10 years to act, says NASA Kuwait fears only half its reported reserves are real …& may not produce them! Lloyd’s warns climate change can destroy the insurance industry Oil sands companies turn to mergers as costs spiral out of control Ocean acidification is killing corals, US govt agencies warn BP faces criminal court over corroding pipelines & exploding refineries US Supreme Court will rule on emissions case brought by states IEA warns non-OPEC oil will soon peak & current energy course is “doomed to failure” CO2 concentrations > long- run average: fear of runaway effect Russia: oil-and-gas nationalism now overt and rampant Q1 Q2 Q3 Q4 1.07

19. A quarterly audit of 2006 Climate changeOil depletion Threat of “explosive” Greenland ice collapse: 10 years to act, says NASA Kuwait fears only half its reported reserves are real …& may not produce them! Lloyd’s warns climate change can destroy the insurance industry Oil sands companies turn to mergers as costs spiral out of control Ocean acidification is killing corals, US govt agencies warn BP faces criminal court over corroding pipelines & exploding refineries US Supreme Court will rule on emissions case brought by states IEA warns non-OPEC oil will soon peak & current energy course is “doomed to failure” CO2 concentrations > long- run average: fear of runaway effect Russia: oil-and-gas nationalism now overt and rampant Q1 Q2 Q3 Q4 1.07

20. A quarterly audit of 2006 Climate changeOil depletion Threat of “explosive” Greenland ice collapse: 10 years to act, says NASA Kuwait fears only half its reported reserves are real …& may not produce them! Lloyd’s warns climate change can destroy the insurance industry Oil sands companies turn to mergers as costs spiral out of control Ocean acidification is killing corals, US govt agencies warn BP faces criminal court over corroding pipelines & exploding refineries US Supreme Court will rule on emissions case brought by states IEA warns non-OPEC oil will soon peak & current energy path is “doomed to failure” CO2 concentrations > long- run average: fear of runaway effect Russia: oil-and-gas nationalism now overt and rampant Q1 Q2 Q3 Q4 1.07

21. A quarterly audit of 2006 Climate changeOil depletion Threat of “explosive” Greenland ice collapse: 10 years to act, says NASA Kuwait fears only half its reported reserves are real …& may not produce them! Lloyd’s warns climate change can destroy the insurance industry Oil sands companies turn to mergers as costs spiral out of control Ocean acidification is killing corals, US govt agencies warn BP faces criminal court over corroding pipelines & exploding refineries US Supreme Court will rule on emissions case brought by states IEA warns non-OPEC oil will soon peak & current energy path is “doomed to failure” CO2 concentrations rising > long-run average: fear of runaway effect Russia: oil-and-gas nationalism now overt and rampant Q1 Q2 Q3 Q4 1.07

22. Reasons to fear global warming 1.The degree 2.The rate 3.Biodiversity loss 4.Sea level rise 5.Threat to insurance industry 6.Threat to capital markets 7. Threat to food supplies 8. Threat to water supplies 9. Threat to human health 10. Increased risk of conflict 11. Threat to societal stability 12. Danger of amplifying feedbacks 13. Danger of runaway effect

23. CO 2 Concentration (ppmv) Years before present Atmospheric CO2 concentration parts per million o C difference w.r.t. end of the 19 th Century Global average near surface temperature o C 1861 - 2003 CO 2 and fossil fuel use 1861 –2100

24. Departures o C from the 1961 – 1990 avge. Surface temperatures 1000 – 2100 AD Average temperatures from a range of IPCC energy scenarios short of deep cuts in fossil fuel use Threshold of severe danger: 2 o C above pre-industrial average temperature (EU target not to exceed) Year AD

25. billion tonnes carbon of carbon 2 o C THRESHOLD TOTAL COAL “RESOURCE” 3100 500 700 TOTAL GAS “RESOURCE” TOTAL OIL “RESOURCE” 400 3,500

26. billion tonnes carbon of carbon 2 o C THRESHOLD TOTAL COAL “RESOURCE” 3100 500 700 TOTAL GAS “RESOURCE” TOTAL OIL “RESOURCE” 400 3,500

27. Conclusions Can we go zero carbon on renewable and efficient energy? Yes, more quickly than most think Will we? Will we even go low carbon? The jury is out Can we plug the energy crisis if the early peak on oil production is correct? No, and neither can anything else ….the silver lining to the cloud is going to be about renaissance, and “going renewable” versus “going coal”