Australasian Science: Australia's authority on science since 1938

Cheap Petrol Signals End of the Oil Age

By Ian Lowe

Petrol prices have dropped as the Saudis recognise that a cheap barrel now is better than a barrel left in the ground tomorrow.

With world oil prices lower than they have been for years, motorists are relieved to be paying less for fuel. But the price drop has caused some questioning of the whole notion of “peak oil”. If oil is getting scarcer and more expensive to produce, shouldn’t the price still be going up?

The most important change last year was that Saudi Arabia halted its policy of holding back its production to keep the price high. With more oil coming from Saudi Arabia, the price has dropped to about half the level a year ago. Why did the Saudis change their approach?

One theory was that they were trying to shake out of the market the more expensive oil being produced by US offshore wells and unconventional sources. The lower price is certainly a threat to the financial viability of some of those producers.

A second theory was that Saudi Arabia was trying to weaken the position, economically and politically, of producer nations like Iran and Russia, whose oil costs much more to extract than the oil in the Arab states.

Now a US energy analyst has argued that those theories have some validity, but are not the whole explanation. Elias Hinkley notes new research calculating that the majority of known fossil fuels will need to be left in the ground if the world is to keep the increase in average global temperature below the United Nations-agreed guard-rail of 2°C. That study showed that 80% of known coal and about 40% of known oil will not be burned if the Paris talks this December agree to global action.

Hinkley believes that the Saudis are the first nation to take this research seriously and start a run to ensure that it is not their oil that gets left in the ground.

Richard Dennis of the Australia Institute has argued in similar terms about Australian coal producers. They clearly understand that climate change is happening, as illustrated by the decision to raise the coal export terminal at Newcastle by a metre to allow for sea level rise. Rather than being in denial about climate change, Dennis argues, they are acting rationally to try to sell as much of their coal as possible before the shutter comes down on coal burning for good, permanently sterilising their deposits. That coal is the ultimate stranded asset: mineral deposits that will never be used and so are economically worthless.

Assumptions in Climate Models Analysed

Much scientific effort has gone into examining the so-called “pause” in global warming. While the Earth is clearly still warming, with 2014 the hottest year ever and all 14 years this century among the 15 hottest ever recorded, there has been a slowing of the rate of increase in the average surface temperature.

Now a new study has compared 114 climate models with the temperature records since 1900 to determine whether there is any systematic error, such as an overestimate of the sensitivity of average temperature to changes in greenhouse gas concentrations. The research by Jochem Marotzke of the Max Planck Institute of Meteorology in Hamburg and Piers Foster of the University of Leeds shows that the climate system is chaotic and subject to random fluctuations, which explain the periods of slower and faster warming during the 115 years analysed.

In each 15-year period studied, the models gave a range of predictions, so Marotzke and Foster examined the differing assumptions in the various models to see if there was a physical explanation. Different models make different assumptions about the variability of solar input, the responsiveness of the climate system to increased levels of greenhouse gases and the fraction of the extra heat that is stored in the oceans rather than contributing to increased surface temperatures.

Marotzke and Foster found that there was no systematic trend for different assumptions about physical behaviour to explain either the variation between models or the differences between model predictions and observed changes. For example, models that assume a greater sensitivity to increasing greenhouse gas concentrations do not systematically predict higher temperatures. However, they found that random variation explains these differences.

That is very bad news for those still denying the science.

Ian Lowe is Emerus Professor of science, technology and society at Griffith University.