Keep fossil fuels in the ground: A new supply-side climate strategy from Obama?

Obama’s words have opened new front in war on carbon, with more uncertain impacts than battles typically fought to curb demand – Cohan

While President Obama’s rejection of the Keystone XL pipeline garnered headlines, it was his rationale for the rejection that may prove most historic.

President Barack Obama during a recent tour of Alaska.

Rather than emphasizing particular concerns along Keystone’s route, Obama adopted a more global frame that has been an emerging theme of some recent climate scholarship and environmental activism.

Preventing large regions of Earth from becoming inhospitable, Obama argued, would require “keep(ing) some fossil fuels in the ground.” Crucially, this logic reflects a global climate challenge, independent of the particulars of Keystone. If applied beyond Keystone by future administrations, that rationale could open a new supply-side front in the battle to curtail carbon emissions.

Prior to Friday, the administration’s efforts for carbon mitigation have focused primarily on the demand-side: curbing consumption of fossil fuels by end users. His demand-side successes have included tough new standards for vehicle efficiency, appliances, and lighting. Plunging prices for natural gas and for subsidized wind and solar have propelled these fuels to dominate new electric supply, cutting demand for coal. Though novel in its approach, the Clean Power Plan too is essentially a means to cut fossil fuel demand. All these policies and trends are bending the curve of fuel use and carbon emissions.

The President’s rationale for rejecting Keystone is different. The rejection will not cut fuel demand. If more fuel intensive trains transport oil instead of pipelines, fuel use may tick up.

Instead, the Keystone rejection makes sense in the context of an emerging logic — that fossil fuels are too abundant to all be burned. Burning all fuels, this logic posits, would make Earth inhospitably warm, with devastating consequences for people and nature. For example, recent research has shown that doing so would melt most Antarctic ice, eventually flooding some regions.

By this logic, much of Earth’s fossil fuel carbon must remain out of the air and in the ground. Even the safest of pipelines could be rejected, to constrict access to carbon-intensive fuels like oil sands.

This case for supply-side constraints has drawn growing attention among anti-Keystone activists as well as in some scholarly circles. What is novel in President Obama’s speech is the embrace of supply-side logic as the basis for a federal policy decision.

The portent of that embrace remains to be seen. After all, the call to keep some carbon in the ground came in a largely symbollic speech, by a President with just 14 months left in office.

It is impossible to predict what course future administrations will take. However, logical extensions of supply side approaches could call into question federal approval of projects that access relatively dirty fuels. Could the Arctic or other difficult to access regions be seen as opportunities for keeping more fuel in the ground?

Consideration of Keystone itself shows supply-side constraints may not even cut emissions at all. Suppose three possible futures: Low Oil prices, High Oil Prices, or in between. If oil prices stay low, the ground will likely remain the home to much of the unaffordable oil sands anyway. High oil prices would prompt industry to extract as much oil sands as possible. Without Keystone, oil sands may travel via more dangerous and costly rail or more lengthy pipelines, increasing emissions. Only at Medium Prices, when lack of Keystone makes a project too costly, would the Keystone rejection cut emissions.

Daniel Cohan.

We face a world where evidence of warming is now unequivocal. Virtually all available evidence points to greenhouse gases from our burning of fossil fuels as the leading cause of that warming. The President is correct that a future in which all fossil fuels have been burned without capture would not be a climate like we or natural ecosystems would recognize.

Obama’s words have opened a new front in the war on carbon, with more uncertain impacts than the battles typically fought to curb demand. We must indeed bend the carbon emissions curve, and keep much of the carbon in the ground. However, whether yesterday’s speech proves merely symbolic, or marks an inflection point in battling carbon, will be a matter for future administrations.

Daniel Cohan is an associate professor of environmental engineering at Rice University and Faculty Scholar, Center for Energy Studies. The author acknowledges helpful contributions from numerous scientists and laypeople who read evolving drafts of this article online. He specifically appreciates the research of Tolu Akinwumi, and specific editorial suggestions provided by Nir Krakauer, Shayak Sengupta, and Markham Hislop of American Energy News.