Do The Facts Matter Anymore? Or Not?

I was reading Bill McKibben's Why the Energy-Industrial Elite Has It In for the Planet when I ran across this text.

When I talked about a carbon bubble at the beginning of this essay, this is what I meant. Here are some of the relevant numbers, courtesy of the Capital Institute: we’re already seeing widespread climate disruption, but if we want to avoid utter, civilization-shaking disaster, many scientists have pointed to a two-degree rise in global temperatures as the most we could possibly deal with.

If we spew 565 gigatons more carbon into the atmosphere, we’ll quite possibly go right past that reddest of red lines. But the oil companies, private and state-owned, have current reserves on the books equivalent to 2,795 gigatons -- five times more than we can ever safely burn. It has to stay in the ground.

Put another way, in ecological terms it would be extremely prudent to write off $20 trillion worth of those reserves. In economic terms, of course, it would be a disaster, first and foremost for shareholders and executives of companies like ExxonMobil (and people in places like Venezuela).

2795 gigatons? (A gigaton (gt) = 1 billion tons.) That didn't sound right. The number was too large. Way too large. I went over to the Capital Institute, which is where McKibben got the number.

First the essential facts as per the report: 

• The Potsdam Institute calculates that in order to reduce the risk of exceeding 2 degrees Celsius warming to a 20 percent chance (not all that comforting), the global carbon budget for 2000 – 2050 cannot exceed 886 GtC02. Minus emissions in the first decade of the century, this leaves a budget of 565 GtC02 over the next 40 years.


• Total “proved” fossil fuel reserves listed on public company balance sheets and State reported reserves is estimated at 2795 GtC02, nearly 5 times the remaining budget, implying 80 percent of these reserves should be left in the ground. 


• Seventy four percent of these reserves are State owned (Russia, China, Saudi, Venezuela, Iran, Iraq, etc.) or owned by private companies, 26 percent are owned by the 200 largest public energy companies.

According to James Leaton at Carbon Tracker, the market value of the top 100 public oil and gas companies and the top 100 public coal companies listed in the report exceeds $7 trillion, approximately 12% of the global public equity market. Making a simple assumption that State-owned companies and reserves have an equivalent market value per unit of carbon would suggest the global market value of proved fossil fuel reserves equals $27 trillion. 

A real cap on carbon emissions designed to limit warming to two degrees implies sovereign states and public corporations will need to strand 80 percent of their $27 trillion of proved reserves.   Rounding down, this implies a potential $20 trillion write off.

There it was again! From the Potsdam Institute. Notice that this text mentions public coal companies and fossil fuel reserves, but McKibben refers explicitly to oil companies. I refused to chase down this number any further. I would have to get some conversion factors and do some math.

I found the "proved" reserves in the BP Statistical Review of World Energy, June 2011. (All numbers are therefore as estimated for 2010.) The first table in the review gives us oil reserves, which includes natural gas liqiuds and gas condensate as well as crude oil.

• 1,383,000,000,000 barrels  (1.383 trillion)
• 143,000,000 barrels  (143 billion, tar sands)
• 1,526,000,000,000  (1.526 trillion, total)

I needed a conversion factor, which I found at this EPA web page.

• 5.81 mmbtu/barrel * 20.17 kg C/mmbtu * 44 g CO₂/12 g C * 1 metric ton/1000 kg = 0.43 metric tons CO₂/barrel

Multiplying 1.526 trillion barrels by 0.43 metric tons CO₂/barrel yielded

• 656,180,000,000 metric tons of CO₂  (656.18 gigatons, billions)

Now I had to add in the natural gas reserves. According to BP's statistical review, gas reserves stood at

• 6,609,000,000,000,000 cubic feet  (6,609 trillion, 6.609 quadrillion)

Again, I needed a conversion factor, which I found at another EPA page.

• Carbon coefficient for natural gas: 117 pounds of CO₂ per million BTU, or 0.12 pounds per cubic foot of gas

Multiplying 6,609 trillion cubic feet by 0.12 pounds per cubic foot yielded

• 793,080,000,000,000 pounds of CO₂

Using the standard 2,204 pounds equals 1 metric ton conversion, the conversion to metric tons yielded

• 359,836,660,617 metric tons of CO2  (359.84 gigatons, billions)

Adding the oil reserves and the natural gas reserves together, expressed in terms of metric tons of CO₂, I got the following

• 656,180,000,000 metric tons of CO₂  (oil, including gas liquids and condensates)
• 359,836,660,617 metric tons of CO₂  (natural gas)
• 1,016,016,660,617 metric tons of CO₂  (total, in proved reserves of oil and natural gas, 1.016 trillion)

Getting back to Bill McKibben, who used the Potsdam Institute data in a misleading way, we get the following comparison.

• 2795 GtCO₂  (gigatons of CO₂, McKibben, oil companies)
• 1016 GtCO₂  (gigatons of CO₂, my calculations as shown above)

That's a pretty large discrepancy. While some would call it an exaggeration, others would call it a major error. Still others might call it a lie. Do the facts matter anymore? Or not?

McKibben referred to "carbon in the atmosphere" while the Capital Institute (citing the Potsdam Institute) referred to metric tons of carbon dioxide. I found a conversion factor for those at Grist.

The biggest source of confusion and errors in climate discussions probably concerns “carbon” versus “carbon dioxide.” I was reminded of this last week when I saw an analysis done for a major environmental group that confused the two and hence was wrong by a large factor (3.67). The paragraph I usually include in my writing:

Some people use carbon rather than carbon dioxide as a metric. The fraction of carbon in carbon dioxide is the ratio of their weights. The atomic weight of carbon is 12 atomic mass units, while the weight of carbon dioxide is 44, because it includes two oxygen atoms that each weigh 16. So, to switch from one to the other, use the formula: One ton of carbon equals 44/12 = 11/3 = 3.67 tons of carbon dioxide. Thus 11 tons of carbon dioxide equals 3 tons of carbon, and a price of $30 per ton of carbon dioxide equals a price of $110 per ton of carbon.

Converting my 1016 gigatons of CO₂ to carbon yielded

• 276,843,776,734 tons of carbon (276.84 gigatons, billions, in proved oil and gas reserves)

Now, if you look carefully, you will notice that the McKibben estimate for oil companies is almost exactly a factor of 10 greater than my number as expressed in gigatons of carbon. That's an interesting result which highlights the egregious error in his presentation. Of course the data McKibben cited seems to include coal reserves, but he ignored that fact, preferring to dwell on the evil oil (and gas) companies.

If you're going to indict the elites—in this case the oil and gas companies—for wanting to trash the planet to maintain the cash value of their reserve holdings, you ought to at least get the math right. You should also indict the right people.

I should also clear up the fundamental confusion. McKibben explicitly referred to oil companies. So I stuck to oil companies, who typically produce crude oil, gas liquids and (dry) natural gas. That generally excludes coal companies, who typically mine coal, although a few have some oil and gas interests. The global warming catastrophe (in terms of levels of CO₂ in the atmosphere) is predominantly a coal problem, not an oil and gas problem. This result has been known since Pushker A. Kharecha and James E. Hansen published Implications of “peak oil” for atmospheric CO2 and climate (2008, also see here).

Coal is where the carbon is, but the conversion from "proved" reserves to metric tons of CO₂ is not straightforward because the carbon content of coal varies widely. And "proved" coal reserves have been declining in recent surveys. See my post Coal, Climate And Confusion, where I make the simple point that the world's coal reserves need to be reassessed. All blanket claims should be examined closely. If they are not, all you've got is propaganda.

Comments

[J.M.]

How Orwellian. There's a difference between "true facts" which reflect the reality of the universe and "good facts" which are used for arguing. Anyone with any skin in the game will always prefer "good facts".

Question, though: did anyone include coal in that calculation? (Not sure if it's considered a "fossil fuel" or not. I'm not that bright.)

[Dave Cohen]

@J.M

I added a few paragraphs at the end to explain the relationship of coal to my calculations, which were limited to oil companies because Bill McKibben specifically cited them.

I know many others will bring up the same issue.

-- Dave

[william mcdonald]

Great post, Dave!

Since I count good only until I run out of fingers and toes, I trust your numbers.

This media darling McKibbon has had quite a run lately, even taking credit for stopping that pipeline. Interesting isn't it, how a blogger could get these real numbers and the news media couldn't?

May I just say, very well done, sir!

[BS]

Dave:

You are brave posting this. It appears McKibben simply quoted the Potsdam numbers. I would guess the "elites" that wrote that report are actually engineers (at least some of them).

I am interested to see who wins this argument and whether your claim they cooked the numbers stands up.

[Dave Cohen]

@BS, @everybody

I made some fairly major revisions in this text to more accurately reflect what was going on here.

In particular, McKibben cited the Capital Institute (Potsdam) data incorrectly. That data appears to include coal reserves, not just oil and gas reserves.

So the Potsdam data may be correct -- if coal reserves are truly what is claimed. Since OPEC oil reserves never go down, we can almost be certain that they are exaggerated. This is not a trivial detail because they constitute such a large share of the world's oil reserves.

I am all for keeping coal reserves in the ground, but that implies that we need energy to replace that provided by coal, including renewables, nuclear or natural gas. Otherwise the industrial civilization it took humans 250 years to build will be a goner sooner rather than later.

On the other hand, if we burn all that coal, and if the stated reserves are correct, then industrial civilization is a goner anyway, later rather than sooner.

-- Dave

[Alexander Ač]

Hello Dave, I think the new paper by Tim Garrett posted few days ago at the Arxiv might be relevant!

See: http://arxiv.org/pdf/1202.0564v1.pdf

Alex

[Dave Cohen]

And I should add this: I do have an axe to grind.

I am god damned sick and tired of climate people (activists, scientists) who don't know the first damn thing about the global energy industry.

-- Dave

[Dr. C]

I agree with you that it seems the figures his cites include emissions from coal burning. In which case it looks like you are coming down awfully hard on him for the lack of just two words: "coal and"** inserted into his sentence, "But the (**) oil companies, private and state-owned, have current reserves on the books equivalent to 2,795 gigatons -- five times more than we can ever safely burn."

From here it looks more like he could have used the services of a better editor, and not so much like he was purposely distorting facts...Just sayin'.

[Dave Cohen]

@Dr C

No, sorry, I'm afraid you have missed the point altogether. A better editor? Bill McKibben doesn't think he requires an editor, but he does. He said what he said, which you need to take seriously instead of saying he probably meant to say something else.

Talk about giving somebody the benefit of the doubt!

The oil companies are the preferred target of all those (like McKibben) who think these companies are responsible for all Evil on Earth, at least as expressed in terms of CO2 in the atmosphere. In fact, they are responsible for providing the feed stocks out of which we make gasoline, diesel fuel, heating oil and jet fuel, which countless millions of people use and depend on every day.

So when McKibben misdirects blame toward Exxon Mobil when the actual blame lies with the world's private and state-owned coal companies, he is distorting the truth about what's really going on, and therefore the debate about what the only actual solution is to mitigating anthropogenic climate change, which is phasing out coal production worldwide over the next few decades.

Today's post itself was meant to provide further proof of that basic truth, which it did.

I hope that's clear to you now. McKibben hates the oil companies -- and for good reason, because they are deniers -- but that's not an excuse for misrepresenting the situation with fossil fuels and emissions.

-- Dave

[Alexander Ač]

Bill McKibben does not need to hate oil companies, since "US gasoline consumption is tanking"

http://www.zerohedge.com/news/guest-post-why-gasoline-consumption-tanking

but then again, what about the fu*king coal?

Alex

[Paul]

It seems that a little knowledge is a bad thing.

The knowledge contained in this post, however, just goes to show how truly fucked up everything is.
We, quite simply, will NOT see anything done about global heating while there's a dollar to be made. It's time we all, climate activists too, started to save our personal energy and prepare for the struggles to come.
Cultivating a vegetable garden would be a good start. If you intend to eat, that is.

[Honesty]

Excellent job Dave! I think I may have fallen into the "activist who doesn't know about the energy industry" category, but now I can try to reassess things thanks to your articles.

It's just all so terrifying to me.

[Chris Sappah]

I was wondering, Not to confuse anything, will burning clean coal (should it become an option) be a savior, or any othe tech.