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