International Petroleum Encyclopedia
 Print    Email    Save  
| RssImageAltText

Kyoto treaty forced nations to ponder hydrocarbon use


WORLD NATIONS EARLY IN 1998 were considering ratification of a global warming treaty that would limit emissions of carbon dioxide and other gases blamed for raising measured surface temperatures.

A sustained temperature rise was thought to be capable of raising sea levels by melting polar ice.

The global warming protocol was a major threat to the world oil industry since most nonbiological carbon dioxide emissions from humans result from the burning of fossil fuels.

The global warming treaty was negotiated in December 1997 at Kyoto, Japan, during a meeting of more than 160 nations participating in the United Nations Framework Convention on Climate Change.

The pact called for 38 industrialized nations to reduce their collective emissions of greenhouse gases by 5.2% between 2009 and 2012.

Nations had 1 year to sign the protocol, beginning in March 1998. Once a nation signed the pact, it could ratify it at any time thereafter.

The treaty will enter into force when ratified by any 55 nations that collectively accounted for 55% of total carbon dioxide emissions in 1990. It will be binding only on the nations that ratify it.

Many issues unresolved at the 11-day Kyoto meeting were to be raised a meeting in Buenos Aires in November 1998.

The treaty called for the U.S. to reduce greenhouse gas emissions 7% by 2012, the European Union 8%, and Japan 6%. China, the world`s second biggest emitter of carbon dioxide, and India, the sixth, were not obliged to reduce their emissions.

U.S. position

President Bill Clinton called the pact "environmentally sound and economically sound. I wish it were a bit stronger on international participation. But we opened the way."

The administration did not plan to sign the pact immediately, which would have sent the treaty to the U.S. Senate for ratification.

It said before that, key developing nations must agree to cut greenhouse gas emissions, an event unlikely until the Buenos Aires meeting, if then.

In the meantime, the U.S. planned to negotiate with key developing nations. Governments also planned to discuss details of an international emissions trading system that had been approved in theory. Under it, industrialized nations would get credits for reducing emissions in other countries.

U.S. Senate Majority Leader Trent Lott said, "This global warming plan faces a frosty reception in the Senate, whose members voted 95-0 in July 1997 to oppose any treaty which would give the developing world a free ride or seriously harm the U.S. economy. This treaty would do both."

Vice President Albert Gore said the Kyoto talks were "among the most difficult negotiations ever held" and resembled "an intricate, three-dimensional chess game" involving more than 160 nations, many of which had "deep and profound differences."

Gore said, "The agreement will enhance growth and create new incentives for the rapid development of technologies through a system of joint implementation and emissions trading. It creates binding limits. It asks us to do what we promised, not promise what we cannot do.

"As we said from the very beginning, we will not submit this agreement for ratification until key developing nations participate in this effort. This is a global problem that will require a global solution."

Gore said the Clinton administration has "completely ruled out new taxes of any kind as a means of meeting our obligations under this treaty."

U.S. Energy Sec. Federico Peña said the administration`s global warming strategy had three stages.

First, it would spur research and development in new technologies and provide $5 billion in tax cuts and other investments to encourage business to invest in clean technologies.

In the second stage, the U.S. would develop international procedures for business to trade emission permits and to invest in clean technologies in developing countries.

The third stage would meet the U.S. emissions target through implementation of domestic and international emissions trading systems. "Our systems for trading emission permits would be developed like the successful permit trading system in the U.S. for sulfur dioxide."

U.S. reactions

William O`Keefe, chairman of the Global Climate Coalition, representing a broad range of American businesses and industry, said the treaty would force a 30% cut in U.S. energy consumption in a little more than 10 years.

"If this were truly an environmental agreement, the countries that will emit the majority of future greenhouse gas emissions would be on board. They aren`t, and it is easy to see why. Our folly will bestow enormous economic advantages on our international competitors."

Sen. Frank Murkowski (R-Alas.), Energy Committee chairman, claimed the U.S. was "hoodwinked" at the talks and higher energy prices are in prospect.

He said, "President Clinton promised the American people we would not agree to any deal lacking meaningful commitments for developing countries to reduce greenhouse gases. Yet this treaty contains no new commitments for developing nations and no agreement to introduce future commitments."

Sen. John Chafee (R-R.I.), Environment and Public Works Committee chairman, said, "The threat of global warming is not going away simply because the Senate appears unlikely to ratify this agreement. Some might equate the lack of a treaty with the lack of a problem. That would be a great mistake in both policy terms and political terms."

Some environmental groups complained about the lack of enforcement mechanisms in the pact. They said the protocol might prove to be no more of a guarantee of action on greenhouse gases than was a non-binding accord adopted 5 years ago in Rio de Janeiro.

Alden Meyer, government relations director for the Union of Concerned Scientists, said, "Some pages of the treaty look like they were written with a hole puncher instead of a pen. Our first priority after Kyoto is to close these loopholes."

Canadian situation

Alberta and oil companies condemned Canada`s agreement at Kyoto to a 6% cut in emissions and said it will lead to job losses and industry closures.

Alberta Energy Minister Steve West said the Kyoto deal was "not acceptable" to the province. "Federal negotiators put too much emphasis on the deal, rather than protecting Canadian interests."

Alberta produces more than 80% of Canada`s oil and gas. The 6% cut is twice the target level originally planned by Ottawa when it went to Kyoto.

Federal and provincial ministers had agreed in November to set greenhouse goals without compromising economic goals. That agreement called for stabilization of greenhouse gas emissions at 1990 levels by the year 2010.

The Canadian Petroleum Products Institute said the 6% reduction Ottawa agreed to at Kyoto was closer to 20% because Canada was then 13% behind on an earlier commitment to reduce greenhouse gases from 1990 levels.

The Canadian Energy Pipeline Association pointed out that Canada`s greenhouse gas emissions were expected to be 19% above 1990 levels by 2000, which meant a 25% cut to meet the Kyoto target.

Canadian Prime Minister Jean Chretien said a review by federal and provincial governments would be held before any decision to ratify or implement the Kyoto emissions agreement.

The planned review would look at the environmental, scientific, and financial implications of making the cuts. The prime minister said talks with the provinces would assume that Canada will proceed with a 6% cut, but he noted Canada had been a participant in prior international treaties that it did not ratify.

European, Japanese views

Ritt Bjerregaard, the European Commission`s environment commissioner, said the Kyoto meeting was "a point of no return in the fight against the horrendous consequences of greenhouse gas emissions."

She said, "The process was never meant to be finalized in Kyoto, and we certainly would like to have achieved more. But it is undeniable that the problems posed by climate change are now firmly established in the minds of the politicians as well as of the public around the world."

She said the industrialized nations proved to be flexible in the talks, as demonstrated by the cuts they accepted.

Yuji Idemitsu, chairman of the Petroleum Association of Japan, said it would be difficult for Japan to achieve its goal of a 6% cut in emissions.

That was 3.5 percentage points more than Japan had wanted. Observers said Japan would have to achieve the bulk of its emissions cuts outside of the country in order to meet its target.

Jens Stoltenberg, the head of the Norwegian parliament`s energy committee, said, "Norway is likely to have much higher costs from the climate agreement than other industrialized countries."

He said lower world oil consumption could cut prices $1-2/bbl and lower Norway`s sales between 10 billion and 15 billion crowns/year, forcing a 1% drop in gross domestic product.

He added: "We are a very strong supporter of the agreement even if it leads to lower oil prices."

Germany said rules would have to be set for the trading of pollution quotas before signed the treaty.

Environment Minister Angela Merkel said, "It is not acceptable that industrialized countries meet their pledges to reduce emissions strictly by trade" in polluting permits. She said at least 50% of pledges must be met by national measures.

Other effects

U.N. Secretary-General Kofi Annan said the Kyoto pact "shows true political leadership by the largest industrial economies. I urge governments now to move expeditiously in ratifying and implementing this historic agreement."

He said the overall target set by developed countries of reducing their emissions by more than 5% below 1990 levels by early next century would represent a major shift in the trend of emissions.

Although most international oil companies criticized the Kyoto treaty, Royal Dutch/Shell and British Petroleum supported it. However, Shell said developing countries should participate, and BP said emissions trading is necessary.

Meanwhile, members of the Organization of Petroleum Exporting Countries called for the establishment of a "compensation fund" for economic losses incurred as a result of a global emissions reduction agreement.

OPEC said the treaty could cost its 11 member nations $20 billion/year in revenues.

It also urged that all fossil fuels, not just oil, be targeted in energy taxes, saying oil is unfairly taxed in Europe.

Some scenarios envisioned a big shift of energy-intensive industry from industrialized countries into the developing world, costing nations in the Organization for Economic Cooperation and Development billions of dollars annually and millions of jobs.

The resulting rise in production costs in OECD countries would mean a double hit for the automobile industry, owing to higher production costs and reduced demand at retail levels due to higher gasoline pump prices.

Some economists argued many jobs would simply move into new industries that would be created to reduce carbon dioxide emissions.

The large semiconductor industries in Japan and the U.S. would be hurt, since their manufacturing processes use two of the specialty gases named in the treaty. The gases, hydrofluorocarbons and perfluorocarbons, were developed as substitutes to the ozone eating-eating chlorofluorocarbons blacklisted internationally in 1987.

Need seen

Scientists who support the global warming theory say human activities have increased concentrations of carbon dioxide by one-third over the past 100 years.

Their concern is that human activities, such as the burning of fossil fuels, deforestation, and certain land-use practices, increase atmospheric concentrations of carbon dioxide that, along with increasing concentrations of other gases (chlorofluorocarbons, methane, nitrogen oxides), could affect the global climate.

According to some projections based on computer models of the atmosphere, if these gases continue to accumulate, a globally averaged warming of 3° to 8° F. could occur over the next 100 years through enhancement of Earth`s naturally occurring "greenhouse effect" - the process by which the atmosphere traps infrared radiation emitted by the earth, thus warming the surface.

Such a warming could shift temperature zones, rainfall patterns, and agricultural belts and, under certain scenarios, cause the sea level to either rise and inundate low-lying coastal areas or, in the event polar ice sheets grow, to fall and expose more land area near the coasts.

Global warming could have far-reaching effects - some positive, some negative depending upon how it may be experienced in a given region - on natural resources; biodiversity; food and fiber production; energy supply, use, and distribution; transportation; land use; water supply and control; and human health and welfare.

The scientific debate continues about why observed temperatures have so far lagged behind theoretical climate model projections of greenhouse gas-induced temperature increases, at least as far as daytime maximum temperatures are concerned.

Research has yielded findings that sulfate aerosols in the atmosphere produce different climatic effects. For example, large aerosol droplets trap longwave radiation and, like a greenhouse gas, reradiate heat, which warms the troposphere.

Some scientists have suggested that sulfate cooling has prevailed during daylight hours, around highly industrialized areas, and predominantly in the mid-latitudes of the northern hemisphere, possibly suppressing the global warming effect.

Nevertheless, a heat-trapping effect equivalent to a 0.5° F. increase of daily minimum temperatures has been observed at night when heat gained during daylight hours is released from the earth`s surface.

Other scientists, representing a more skeptical point of view about global warming, have countered that sulfate particles represented in global climate models cannot, by themselves, account for the magnitude and distribution of cooling that is being observed.

When preparing its second "Integrated Assessment of Climate Change," U.N. Intergovernmental Panel on Climate Change scientists found what they considered to be compelling evidence to suggest that if the nations of the globe intend to hold collective greenhouse gas concentrations to no more than a third of current predictions for the year 2100, or at around 700 ppm in equivalent concentrations of carbon dioxide (which translates into a 0.5°-2.7° F. temperature rise), then stronger actions to control greenhouse gas emissions will have to be taken.

This contrasts with some claims that no stronger controls are necessary until 2020 if technological measures are implemented which would significantly reduce or eliminate atmospheric concentrations after that time.

NOAA report

The National Oceanic and Atmospheric Administration said 1997 was the warmest year of this century, based on land and ocean surface temperature data.

A team at NOAA`s National Climatic Data Center in Ashville, N.C., reported land and sea temperatures averaged 0.75° F. above normal.

For land temperatures, normal was defined by the mean temperature of 61.7° for 1961-1990. The 1997 level exceeded the previous record, set in 1990, by 0.15°.

NOAA said, "The record-breaking warm conditions of 1997 continue the pattern of very warm global temperatures. Nine of the past 11 years have been the warmest on record."

Tom Karl, who led the team, said, "Land temperatures did not break the previous record set in 1990, but 1997 was one of the five warmest years since 1880."

NOAA said that, including 1997, the top ten warmest years over the land had all occurred since 1981, and the warmest 5 years all since 1990. Land temperatures for 1997 averaged 0.75° above normal, falling short of the 1990 record by 0.25°.

Ocean temperatures during 1997 were the warmest on record, exceeding the pervious record warm years of 1987 and 1995 by 0.30°.

NOAA said global temperature warming trends now exceed 1° F./100 years, with land temperatures warming at a somewhat faster rate.

Myths hit

The conservative Heritage Foundation said the U.S. Senate should reject the treaty because it "would sacrifice the U.S. economy in order to pacify members of special-interest environmental groups with every incentive to exaggerate the possibility of global warming."

It said the administration was unable to advance the U.S. agenda in Kyoto and acquiesced to an agreement that will put Americans at an economic disadvantage.

"The U.S. negotiators agreed to considerably tighter mandatory reduction targets than they had sought when the talks began - from reductions between 2008 and 2012 to 1990 levels to reductions that are 7% below those 1990 levels.

"By contrast, other nations either stood firm or weakened their commitments. For example, the European Union, one of the loudest critics of the U.S. position, accepted lesser reductions-from 15% below 1990 levels by 2010 to 8% below those levels between 2008 and 2012.

"Without the treaty, according to U.S Department of Energy predictions, U.S. greenhouse gas emissions in 2012 will be about 34% above 1990 levels. Thus, the U.S. actually committed to reducing its emissions by about a third (the 7% reduction from 1990 levels outlined in the treaty plus the 34% increase in emissions that supposedly would have occurred `normally` without the treaty)."

Heritage said the treaty would not reduce the overall level of greenhouse gases in the atmosphere.

"The treaty does not require any emissions reductions by the developing countries, despite the fact that they will be the major source of greenhouse gas emissions by 2016, generating 75% of all greenhouse gases by 2100, including 66% of carbon dioxide."

The conservative Cato Institute, Washington, D.C., said the Kyoto pact was "part political fraud and part wishful thinking.

"Computer models used by the agreement`s supporters project that the agreement will only reduce global temperatures by a small fraction of 1° a hundred years from now.

"Moreover, the fact that there is absolutely no enforcement mechanism in the treaty, and that three quarters of the world`s population is exempt from the agreement, means that any nation that complies with the treaty will be incurring all costs and no benefits."

It said the agreement is far more restrictive than advertised and would require the U.S. to cut its carbon dioxide emissions a third by the year 2010.

"The notion that those cuts can be achieved cheaply and painlessly, with no significant social disruption, is absurd. No mainstream economist holds such an opinion.

"The idea that government can pick the ideal energy technologies for tomorrow is a triumph of hope over experience. Remember government`s promise that nuclear power would be too cheap to meter?"

Unanswered questions

Conflicting data and claims made it hard to assess the Kyoto agreement.

The deal included a number of "loopholes," including use of the carbon-absorbing sink effects of forests and other growing organic matter.

Europeans fought to delay global emissions trading, which would allow nations meeting their targets to sell credits to those lagging behind. Those rules remained to be defined at later meetings.

Environmentalists balked at the compromise, which allowed Russia, whose emissions dropped in the post-Soviet industrial depression, to use a very favorable 1990 baseline for setting targets.

The treaty was certain to be analyzed in depth during 1998 and its flaws exposed.

But it had firmly committed much of the world to reconsider hydrocarbon use and reduce carbon dioxide emissions.

Click here to enlarge image

Sen. Chuck Hagel (R-Neb.) addresses an anti-greenhouse treaty rally in Washington, D.C.

Click here to enlarge image

Click here to enlarge image

Click here to enlarge image

Click here to enlarge image

Contact Us


PennEnergy Petroleum Research

Worldwide Refinery Survey and Complexity Analysis - New 2011
Refineries worldwide with detailed information on processing capacities, location etc., plus the Nelson Complexity index for each refinery.
Latest Year    Product No. E1271-11               Price $1550 US
Hist.(1986-current) Product No. E1271C   Price $2650 US
ENERFUTURE FORECASTS

Database on global energy forecast data to 2030. Service
provides unique insight into future energy demand, prices and
emissions. Exports to spreadsheets.
EnFuture

Confessions of an Energy Price Forecaster - A Trilogy
An annual subscription of three reports to raise your
awareness level regarding product  pricing. Reports are
updated throughout the year.
TOBINSET                                                      $350
 
How to use and communicate probabilistic information plus a discussion of the application of probabilistic reserve estimations.
How to use and communicate probabilistic information
plus a discussion of the application of probabilistic  
reserve estimations.  
Product Code:TobinBother              $150.00 US
Worldwide Survey of Heavy Lift Vessels

Listing of liftboats with 100 st crane capacity or greater.
Description and capacities included in flexible spreadsheet.
OFFSS1008                          Price: 150.00

US Offshore Oil Industry in the Aftermath of the Gulf of Mexico Oil Spill

 

 

 

This report analyzes the impact of the GOM Oil Spill on the US Offshore Policy and Regulations. How the oil spill will impact the US offshore industry as well as the Global oil and gas industry. It provides in depth analysis of the cost pressures and disadvantages on the US offshore industry as a result of the oil spill as well as how the cost disadvantages can lead to reduced drilling and consolidations in the US offshore industry.

US Shale Prospects Players, Projects, Costs, Returns

The report presents an in-depth analysis of the background, leasing and drilling activities, reserves and production details, detailed economics of operations in each of the major shale. The major shales covered in this report are - Barnett shale, Fayetteville shale, Haynesville shale, Woodford shale and Bakken shale.

North America Unconventional Gas Industry - Set to Regain Momentum Post Current Crisis

The report provides an outlook for the overall natural gas industry in North America (the US and Canada) with forecasts till 2020, analyzing the growing importance of unconventional natural gas production in the industry. The report provides detailed analysis of 7 major shale gas plays and 2 major Coal Bed Methane (CBM) basins in North America analyzing the drilling details, cost trends, historical forecast and major players in each play. The report also provides the production forecast for each of these plays to 2020.