Editing IPCC:AR6/WGIII/Chapter-6 (section)

==== 6.4.2.7 Fossil Energy ====

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Fossil fuels could play a role in climate change mitigation if strategically deployed with CCS ( ''high confidence'' ). On the one hand, the primary mechanism for reducing emissions is to eliminate the unabated fossil fuel use. On the other hand, fossil energy combined with CCS provides a means of producing low-carbon energy while still utilising the available base of fossil energy worldwide and limiting stranded assets. While [[#6.4.2.5|Section 6.4.2.5]] discusses the important aspects of CCS with fossil fuels, this section aims to elucidate the feasibility criteria around these fuels itself.

Fossil fuel reserves have continued to rise because of advanced exploration and utilisation techniques ( ''high confidence'' ). A fraction of these available reserves can be used consistent with mitigation goals when paired with CCS opportunities in close geographical proximity ( ''high confidence'' ). Based on continued exploration, the fossil fuel resource base has increased significantly; for example, a 9% increase in gas reserves and 12% in oil reserves was observed in the USA between 2017 and 2018. This increase is a result of advanced exploration techniques, which are often subsidised ( [[#Lazarus--2018|Lazarus and van Asselt 2018]] ; MA et al. 2018). Fossil reserves are distributed unevenly throughout the globe. Coal represents the largest remaining resource (close to 500 ZJ). Conventional oil and gas resources are an order of magnitude smaller (15–20 ZJ each). Technological advances have increased the reserves of unconventional fossil in the last decade. Discovered ultimate recoverable resources of unconventional oil and gas are comparable to conventional oil and gas (Fizaine et al. 2017).

It is unlikely that resource constraints will lead to a phase-out of fossil fuels, and instead, such a phase-out would require policy action. Around 80% of coal, 50% of gas, and 20% of oil reserves are likely to remain unextractable under 2°C constraints ( [[#McGlade--2015|McGlade and Ekins 2015]] ; Pellegrini et al. 2020). Reserves are more likely to be utilised in a low-carbon transition if they can be paired with CCS. Availability of CCS technology not only allows continued use of fossil fuels as a capital resource for countries but also paves the way for CDR through BECCS ( [[#Haszeldine--2016|Haszeldine 2016]] ; [[#Pye--2020|Pye et al. 2020]] ). While the theoretical geologic CO 2 sequestration potential is vast, there are limits on how much resource base could be utilised based on geologic, engineering, and source-sink mapping criteria ( [[#Budinis--2017|Budinis et al. 2017]] ).

Technological changes have continued to drive down fossil fuel extraction costs. Significant decarbonisation potential also exists via diversification of the fossil fuel uses beyond combustion (high evidence). The costs of extracting oil and gas globally have gone down by utilising hydraulic fracturing and directional drilling for resources in unconventional reservoirs ( [[#Wachtmeister--2020|Wachtmeister and Höök 2020]] ). Although the extraction of these resources is still more expensive than those derived from conventional reservoirs, the large availability of unconventional resources has significantly reduced global prices. The emergence of liquefied natural gas (LNG) markets has also provided opportunities to export natural gas significant distances from the place of production ( [[#Avraam--2020|Avraam et al. 2020]] ). The increase in availability of natural gas has been accompanied by an increase in the production of natural gas liquids as a co-product to oil and gas. Over the period from 2014 to 2019, exports of natural gas liquids increased by 160%. Natural gas liquids could potentially be a lower-carbon alternative to liquid fuels and hydrocarbons. On the demand side, natural gas can be used to produce hydrogen using steam methane reforming, which is a technologically mature process (Sections 6.4.4 and 6.4.5). When combined with 90% CO 2 capture, the costs of producing hydrogen are around USD1.5–2 kg(H 2 ) –1 ( [[#Collodi--2017|Collodi et al. 2017]] ; [[#Newborough--2020|Newborough and Cooley 2020]] ), considerably less than hydrogen produced via electrolysis.

Significant potential exists for gasifying deep-seated coal deposits ''in situ'' to produce hydrogen. Doing so reduces fugitive methane emissions from underground coal mining. The integration costs of this process with CCS are less than with natural gas reforming. The extent to which coal gasification could be compatible with low-carbon energy would depend on the rate of CO 2 capture and the ultimate use of the gas ( [[#Verma--2015|Verma and Kumar 2015]] ). Similarly, for ongoing underground mining projects, coal mine methane recovery can be economic for major coal producers such as China and India. Coal mine methane and ventilation air methane recovery can reduce the fugitive methane emissions by 50–75% ( [[#Zhou--2016|Zhou et al. 2016]] ; [[#Singh--2018|Singh and Sahu 2018]] ).

The cost of producing electricity from fossil sources has remained roughly the same with some regional exceptions while the costs of producing transport fuels has gone down significantly ( ''high confidence'' ). The cost of producing electricity from fossil fuels has remained largely static, with the exception of some regional changes, for example, a 40% cost reduction in the USA for natural gas ( [[#Rai--2019|Rai et al. 2019]] ), where the gas wellhead price has declined by almost two-thirds due to large reserves. Similarly, the global price of crude oil has declined from almost USD100 bbl –1 to USD55 bbl –1 in the last five years.

The energy return of investment (EROI) is a useful indicator of full fossil lifecycle costs. Fossil fuels create significantly more energy per unit energy invested – or in other words have much larger EROI – than most cleaner fuels such as biomass or electrolysis-derived hydrogen, where intensive processing reduces EROI ( [[#Hall--2014|Hall et al. 2014]] ). That said, recent years have seen a decrease in fossil EROI, especially as underground coal mining still represents a substantial portion of global production. Exploitation of unconventional gas reservoirs is also energy intensive and has led to a reduction in EROI. The primary energy EROI of fossil fuels has converged at about 30, which represents a 20-point decrease from the 1995 value for coal ( [[#Brockway--2019|Brockway et al. 2019]] ). When processing and refining stages are considered, these EROI values further decrease.

Several countries have large reserves of fossil fuels. Owing to climate constraints, these may become stranded, causing considerable economic impacts ( ''high confidence'' ) (Sections 6.7.3 and 6.7.4, and Box 6.13). While global fossil energy resources are greater than 600 ZJ, more than half of these resources would likely be unburnable, even in the presence of CCS ( [[#McGlade--2015|McGlade and Ekins 2015]] ; [[#Pye--2020|Pye et al. 2020]] ). This would entail a significant capital loss for the countries with large reserves. The total amount of stranded assets in such a case would amount to USD1–4 trillion at present value (Box 6.13).

Apart from CO 2 emissions and air pollutants from fossil fuel combustion, other environmental impacts include fugitive methane leakages and implications to water systems '''.''' While the rate of methane leakage from unconventional gas systems is uncertain, their overall GHG impact is less than coal ( [[#Tanaka--2019|Tanaka et al. 2019]] ; [[#Deetjen--2020|Deetjen and Azevedo 2020]] ). The stated rate of leakage in such systems ranges from 1–8%, and reconciling different estimates requires a combination of top-down and bottom-up approaches ( [[#Zavala-Araiza--2015|Zavala-Araiza et al. 2015]] ; [[#Grubert--2019|Grubert and Brandt 2019]] ). Similarly, for coal mining, fugitive methane emissions have grown, despite some regulations on the degree to which emission controls must be deployed. Recent IPCC inventory guidance also notes considerable CO 2 emissions resulting from spontaneous combustion of the coal surface, and accounting for these emissions will likely increase the overall lifecycle emissions by 1–5% ( [[#IPCC--2019|IPCC 2019]] ; [[#Singh--2019|Singh 2019]] ; [[#Fiehn--2020|Fiehn et al. 2020]] ).

Another key issue consistently noted with unconventional wells (both oil and gas, and coalbed methane) is the large water requirements ( [[#Qin--2018|Qin et al. 2018]] ). The overall water footprint of unconventional reservoirs is higher than conventional reservoirs because of higher lateral length and fracturing requirements ( [[#Scanlon--2017|Scanlon et al. 2017]] ; [[#Kondash--2018|Kondash et al. 2018]] ). Moreover, produced water from such formations is moderately to highly brackish, and treating such waters has large energy consumption ( [[#Bartholomew--2016|Bartholomew and Mauter 2016]] ; [[#Singh--2019|Singh and Colosi 2019]] ).

Oil and coal consistently rank among the least preferred energy sources in many countries ( ''high confidence'' ). The main perceived advantage of fossil energy is the relatively low costs, and emphasising these costs might increase acceptability somewhat ( [[#Pohjolainen--2018|Pohjolainen et al. 2018]] ; [[#Boyd--2019|Boyd et al. 2019]] ; [[#Hazboun--2020|Hazboun and Boudet 2020]] ). Acceptability of fossil fuels is, on average, similar to acceptability of nuclear energy, although evaluations are less polarised. People evaluate natural gas as somewhat more acceptable than other fossil fuels, although they generally oppose hydraulic fracturing ( [[#Clarke--2016|Clarke et al. 2016]] ). Yet, natural gas is evaluated as less acceptable than renewable energy sources, although evaluations of natural gas and biogas are similar ( [[#Liebe--2019|Liebe and Dobers 2019]] ; [[#Plum--2019|Plum et al. 2019]] ). Acceptability of fossil energy tends to be higher in countries and regions that strongly rely on them for their energy production ( [[#Pohjolainen--2018|Pohjolainen et al. 2018]] ; [[#Boyd--2019|Boyd et al. 2019]] ). Combining fossil fuels with CCS can increase their acceptability ( [[#Van%20Rijnsoever--2015|Van Rijnsoever et al. 2015]] ; [[#Bessette--2018|Bessette and Arvai 2018]] ). Some people seem ambivalent about natural gas, as they perceive both benefits (e.g., affordability, less carbon emissions than coal) and disadvantages (e.g., finite resource, contributing to climate change) ( [[#Blumer--2018|Blumer et al. 2018]] ).

Fossil fuel subsidies have been valued in the order of USD0.5–5 trillion annually by various estimates which have the tendency to introduce economic inefficiency within systems ( [[#Jakob--2015|Jakob et al. 2015]] ; [[#Merrill--2015|Merrill et al. 2015]] ) ( ''high confidence'' ). Subsequent reforms have been suggested by different researchers who have estimated reductions in CO 2 emissions may take place if these subsidies are removed ( [[#Mundaca--2017|Mundaca 2017]] ). Such reforms could create the necessary framework for enhanced investments in social welfare – through sanitation, water, clean energy – with differentiating impacts (Edenhofer 2015).

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