How Dangerous is Oil Dependence for the Environment?

Introduction

“We’re headed towards disaster if we can’t get our warming in check.” The earth should be cooling but is instead constantly warming up by a rate of 0.8°C in global average surface temperature. The world economy is not facing the problem of running out of energy but, it is facing the imminent problem of over-consumption of oil. Oil, Coal, and Natural Gas are the most important and widely consumed sources of energy. These fossil fuels have high carbon content which is gradually impacting the planet for the worse. Energy consumption and economic growth are interlinked in the sense that, economic and political power is what regulates the consumption of oil. The appetite and demand of world economies for crude oil continue to grow at an alarming rate. Prices have been on the rise since the Covid-19 pandemic began and continue to be as economies still grapple with the after-effects of the Pandemic. Furthermore, with the recent Ukraine-Russia conflict, oil prices are at an all-time high. The London-based think tank Carbon Tracker states that major oil extraction companies might be tempted to invest in greater gas and oil extraction due to the reduction in global oil supply. Russia is one of the biggest producers of natural gas and oil which produced an average of 10.5 million barrels of oil a day in the year 2020. The European Union was highly dependent upon Russia for its energy demands and it has even acknowledged this fact. The conflict reduced the world supply of oil so subsequently, oil prices rose, which led to more people investing in oil and gas extraction. This was in direct contravention of the goals that were set by the global economies of the world.

Climate Change Conventions

The Kyoto Protocol and the Paris Agreement are built upon the United Nations Framework Convention on Climate Change (UNFCCC), an international environmental treaty which helps stabilise greenhouse gases in the atmosphere. The central aim of the Paris agreement is to strengthen the global response towards the threat of climate change by keeping the global temperature rise at 1.5° Celsius. The agreement intends for countries to effectively deal with the impacts of climate change and at making economic plans which would not act detrimental towards the planet. An essential self-check feature of the Paris Agreement is the Nationally determined contributions (NDCs) which are the heart of the Paris Agreement. It embodies the efforts of each country to reduce emissions and adapt to climate change. It allows each nation to set its own goals rather than imposing them. The Paris Agreement also talks about 20/20/20 targets which state a 20% reduction in carbon dioxide emission, an increase in the renewable energy market by 20% and an increase in energy efficiency by 20%.

The Kyoto Protocol which also aimed at the reduction of carbon dioxide gases failed to achieve its objective because it put the onus only on the developed countries for the emission of greenhouse gases. During that time, developing nations such as India and China were one of the major emitters of carbon but were exempted from the protocol. It is a fact that developing economies consume more oil than developed economies because they do not have the necessary technology and methods to manufacture or import renewable sources of energy. There is a reluctance to use renewable sources of energy due to a comparatively higher cost than non-renewable sources of energy. Non-renewable sources of energy are much cheaper than renewable sources of energy such as solar and wind energy which need a lot of investment and financial support from foreign sources. In the recent United Nations Climate Change Conference or COP26 which was held in Glasgow, it was observed by various signatories that they would no longer issue oil and gas production licenses and would take concrete steps to curb the production of such fuels. However, the conference lacks significance because no major oil-producing country was part of the summit.

Are Countries Acting in Accordance With Climate Change Conventions?

The International Energy Agency in the year 2021 warned of an immediate halt to investment projects to reach net-zero carbon emissions by 2050 but, it was treated as just another report. One of the major organisations that have an upper hand in making oil and natural gas business decisions that impact the global oil businesses is OPEC+. The Organisation of the Petroleum Exporting Countries (OPEC+) is an intergovernmental organisation of 13 oil-producing countries. The organisation has agreed to reduce the production of oil by 2 million barrels per day. The cut will represent 2% of the global oil supply. However, the prices of oil shot up the moment this news was made public.

Russia and Saudi Arabia are the biggest producers of OPEC+. So, after sanctions were imposed on Russian oil, the Organisation for Economic Co-operation and Development (OECD) countries had to release up to 60 million barrels of oil per day to meet the global demand. After that, around USD 300 billion have been collectively allocated by countries towards fossil fuel activities since the COVID-19 pandemic. There are four large-scale oil and gas projects under operation in Mexico, Greece, Estonia, and Western Australia which will be up and functioning before the first quarter of the year 2024. For these aggressive production plans, a sum of 3181 million dollars is being invested.

However, in a positive development, the US District Court for the District of Columbia recently cancelled the lease of land of more than 80 million acres in the Gulf of Mexico, for oil exploration because the emission of greenhouse gases was not considered before the leases were auctioned. In Canada, a Centre of Excellence for Carbon Capture and Removal plant is being built, which would be the country’s first commercial-scale carbon capture and manufacturing facility. Its primary function would be to filter the air by removing carbon dioxide. The new Beyond Oil and Gas Alliance (BOGA) is one of the very few alliances that is pushing for a global treaty on stopping fossil fuel extraction. Denmark, which had taken the lead in launching BOGA, has made it clear that it would no longer issue oil and gas licenses.

India’s Stance on Oil and Natural Gas

The Indian government’s narrative on oil consumption is entirely driven by economic needs rather than environmental needs. India imports 86% of its crude oil and 55% of its gas. When most of the world economies banned the import of Russian oil and gas due to the conflict, India continued to purchase Russian oil at a 15-20% discount. For oil and natural gas exploration activities, India has allowed 100% Foreign Direct Investment under the automatic route (it does not require the approval of the Indian government). India is constantly seeking to expand its energy sector because it's expecting the demand for oil and natural gas to increase in the incoming years. Indian and the US have a Strategic Clean Energy Partnership (SCEP) which has 5 pillars. The pillars are Power and Energy Efficiency, Renewable Energy, Responsible Oil and Gas, Sustainable Growth and Emerging Fuels and Technologies. However, India’s main aim is to explore untouched lands and be self-sufficient when it comes to the consumption of energy. India’s actions are highly contradictory to the strategic partnership and international climate conventions. It is focusing on exploration and production in the areas of energy and emerging fuels rather than investing in renewable sources of energy and cutting down oil consumption.

Conclusion

Climate change is an intractable environmental problem. The emission of carbon dioxide (CO2) from the combustion of fossil fuels, is a direct consequence of environmental problems. Huge quantities of carbon dioxide are generated due to the combustion of such fossil fuels. Adverse effects of oil consumption such as the rising global temperature, ocean acidification and melting ice caps can be widely observed. Human causes such as the burning of fossil fuels have trapped the greenhouse gases such as carbon dioxide which is slowly heating the earth. An IPCC report clearly states that severe effects can be expected to occur when the global temperature rises by 1.5°C.

Around 34.81 gigatonnes of carbon dioxide were emitted in the year 2020, out of which 53% came from burning fossil fuels and natural gases. The Intergovernmental Panel on Climate Change published their first instalment Sixth Assessment Report in the year 2022, after which, the UN Secretary-General Antonio Guterres emphasized that the report was a death knell for coal and fuels as they would ultimately destroy the planet Earth. He also emphasized that countries should end fossil fuel exploration and production and should aim to shift towards renewable energy. The research is clear and is for everyone to witness it. Climate change is real and it is impacting us every day and soon it is going to get worse. Exploration and production of oil and natural gases should be immediately stopped. Countries need to stop oil exploration now. Instead of investing the money in oil exploration, those funds should be invested in clean energy reforms which would reduce the global oil demand. This would help in curbing global warming and would be in accordance with the climate conventions.

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