Some Positive Climate-actions for Petroleum Oil and Its Derivatives

Petroleum Oil and its derivatives are fossil-based fuels that are used widely in cars, ships, and planes; they are also used for industry-thermal processes, heating, and in producing electricity—through burning/ combustion processes that normally generates Greenhouse Gasses (GHG), the bulk of which are Carbon Dioxide (CO2). The extraction and transport of the said Oil have also, in several occasions, sparked major conflicts and oil spills that consequently harmed the ecosystems and water quality.

The scientific debate on GHG (particularly CO2) as the major cause of Climate Change has long been concluded, and it is on this premise that we should discourage the drilling, refining, and consuming of said Oil for energy—and other similar and/ or related activities.

Figure 1 – CO2-emissions from burning of Petroleum Oil

Sample courses of action

  • Governments imposing limits on oil drilling and exploration, removing subsidies, and taxing oil.
  • Universities, corporations, and individuals divesting from oil companies.
  • Shifting to non fossil-fueled transport vehicles, where practicable.
  • Financial services industry (e.g., banks) or global development institutions (e.g., World Bank) limiting access to capital for exploration, drilling, refining, and delivery.

Big Message

  • When a steep oil tax is the only action implemented, there will be no dramatic reduction in global-temperature, as the natural shifts to coal and natural gas will offsett any reduction in oil usage.

Some Key Dynamics

  • Just like any commodity, when oil is discouraged by taxing, its demand will automatically be reduced.
  • However, depending on its price elasticity of demand, shifts toward to coal, gas an other substitute is possible. Unless there are restrictions on coal and gas, their demand will go up in response to expensive oil. We call this the “squeeze the balloon” problem – depressing fossil fuel emissions in one area causes them to pop up in another. Renewable sources are also boosted slightly, but the impact is negligible. Adding a carbon price is a good solution to the “squeeze the balloon” problem, as it addresses all fossil fuels together.
  • Because of these possible shifting of sources, the net result of taxing oil is no change in overall greenhouse gas emissions and no reduction in future temperature.
  • Another possible shift when taxing oil results in an increase in electrification of the vehicle fleet as electric powered modes of transport become more affordable in the face of higher oil prices.

Potential Co-Benefits

  • A reduction in oil drilling could lead to fewer oil spills, helping protect wildlife habitats, biodiversity, and ecosystem services at production sites and along transportation routes.
  • Reduced economic dependence on oil can improve national security and lower military costs.

Equity Considerations

  • The oil industry provides many high-paying jobs for people with technical trade backgrounds. Providing pathways for these people to find new jobs will be essential.
  • Oil companies wield enormous economic and political power locally and globally. In order to discourage oil, certain industry protections must be eliminated.
  • There is a history of oil refineries being located in marginalized communities and companies working to avoid or limit environmental regulations.

Remarks

My upcoming Blog on this subject will quantitatively assess the effects of various Oil policy-scenarios on the established climate-metrics of post-industrial global mean Temperature-Increase and Sea-level Rise, using the world climate simulator EnROADS.

Standby…


References: 1.) EnROADS Reference Guide, 2.) U.N. webpage https://www.un.org/en/sections/issues-depth/climate-change/

Published by Ramon H. Enriquez MIE&M, RME

Ramon "Mon" Hojas Enriquez is a retired business executive who now spends his available time sharing the wisdom that he gained from his graduate academic preparations and more than 35-years of hands-on industry practice here (Philippines) and abroad; as an Independent Management Consultant for various industrial-firms, and as a Professional Lecturer/ Resource Speaker of leading Higher-Ed/ Training institutions in Metro Manila. He now focuses on management consulting, education and training---for the proper management of Supply-chains, Strategy-execution, and Decision-support. His affiliations with relevant leading global industry associations keeps him informed and updated on the current and future developments in the above-mentioned fields of interests. They include, among others: The Association for Supply Chain Management (ASCM), Project Management Institute (PMI), Institute for Operations Research and Management Sciences (INFORMS), American Society for Quality (ASQ), Institute for Supply Management (ISM), System Dynamics Society (SDS), and Climate Interactive (CI)---and has been advocating Sustainable Development and Climate-action since 2000. Mon is a lifelong Systems Thinker and an avid micro-Blogger. His hobby includes Photography and the Graphics-arts, Singing, Guitar-playing, Songwriting; and Audio recording, mixing and mastering. When not traveling or visiting Clients, he normally spends his time at his QC-office cum studio or, at home with his Wife and dog.