Federal Oil and Gas Leasing and Greenhouse Gas Emissions | American Enterprise Institute
In a recent paper, Brian C. Prest of Resources for the Future asks “How Much Would Expanding Federal Oil and Gas Leasing Increase Global Carbon Emissions?” I shunt aside here a critique of Prest’s methodological approaches. What is interesting is the utter absence in his analysis of any discussion of the implications of those additional GHG emissions in terms of climate phenomena.
Prest reports a finding that, cumulatively for 2024–2050, additional GHG emissions under a “high leasing/high oil price” scenario would be 12.1 billion tons, in carbon dioxide equivalents. Prest’s baseline (“business as usual”) emissions projection is 10.1 billion tons, so that the global difference in GHG emissions would be two billion tons. Prest is careful to note that these figures are net of an assumed 57 percent “leakage” rate, that is, a “partial substitution of production between federal lands and other sources of supply.”
For purposes of simplicity, let us assume the figure of 12.1 billion tons over the period of 27 years, or about 0.45 billion tons per year. Let us ask the obvious question: What global temperature impact would those additional GHG emissions yield by the year 2100, using the Environmental Protection Agency climate model under alternative assumptions on the equilibrium sensitivity of the climate system of 4.5°C and 2°C. Note that an assumed ECS of 4.5°C is the high point of the “likely” ECS range reported by IPCC in its Fifth Assessment Report (p. 81), and higher than the high point of 4°C in the “likely” range in the IPCC Sixth Assessment Report (p. 46). An ECS assumption of 2°C is a bit higher than the average of the ECS estimates reported (footnote 8) in the modern peer-reviewed literature.
US GHG emissions in 2022 were about 6.3 billion tons. Under an ECS assumption of 4.5°C, net zero US GHG emissions achieved by 2050 would reduce year 2100 global temperatures by 0.173°C. (The assumed baseline emissions/concentrations path is “representative concentration pathway 6.”) The year 2100 effect of 0.45 billion tons annually: 0.012°C. A linearity assumption is not strictly correct—the GHG radiative forcing (warming) equations are logarithmic—but wholly appropriate for purposes of first approximation and policy analysis. For an assumed ECS of 2°C: respectively, 0.104°C and 0.007°C. Note that the standard deviation of the surface temperature record is 0.11°C.
Prest ignores this, for obvious reasons, substituting instead a truly infantile statement:
Decisions made today will affect future emissions. Even if oil and gas produced on federal lands only makes up a small percentage of annual emissions, U.S. actions have global consequences. Every little bit of emissions reductions counts, especially given that American choices will have implications for global markets.
Precisely what “global consequences” will result from a temperature change of approximately one one-hundredth of a degree? What are the prospective “implications for global markets?”
Let us apply an alternative approach: the Biden administration substitution of the “social cost of carbon” in place of projections of climate impacts, precisely because the latter are effectively zero. The 2023 Biden administration estimate of the SCC, in year 2024 dollars, is about $226 per ton. For the 2024–2050 period, that implies a total SCC of about $2.7 trillion attendant upon the Prest expansion of federal leasing. (Here I shunt aside calculations in present value terms.)
Prest’s estimates of additional oil and gas output appear to be (Figure A3) very roughly 2.3 million barrels of oil per day and 13 billion cubic feet of natural gas. At current (July 10) market prices for crude oil (WTI) and natural gas (Henry Hub), respectively about $67 per barrel and $3.33 per million btu (about 1000 cubic feet), gross output value per day is about $154 million and $43 million, respectively, or $197 million per day. That is about $71.9 billion per year, or $1.9 trillion over the 2024–2050 period.
Accordingly, it would appear that the SCC of the additional GHG emissions in Prest’s analysis exceeds the market value of additional fossil energy output. That result is preposterous, because the climate impacts would be virtually zero, as discussed above, and because the Biden SCC analysis is fundamentally dishonest.
It is driven by RCP8.5, a GHG concentration scenario essentially impossible.
It applies climate models that overstate the actual atmospheric temperature record by a factor of 2.3.
It includes the purported global impacts of increasing atmospheric GHG concentrations, an incorrect methodological approach.
It ignores the large uninternalized social benefits of rising GHG concentrations and moderate warming.
It includes the asserted “co-benefits” of reduced emissions of criteria and hazardous air pollutants, a blatant exercise in double-counting.
It employs artificially low discount rates.
It mischaracterizes the GDP effects of rising GHG concentrations.
Prest’s analysis of the GHG emissions effects of federal fossil leasing ignores climate phenomena completely. It is not to be taken seriously.
