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How Can Fossil Fuel Supplies Be Constrained?


Academics gathered in Oxford this week to discuss how to constrain fossil fuel supply as part of efforts to tackle climate change.

Carbon Brief attended the two days of talks at the “Fossil Fuel Supply and Climate Policy” conference, organised by the Stockholm Environment Institute (SEI), to speak to delegates about what kind of future lay in the pipeline for fossil fuels.

Climate change policy to date has focused heavily on reducing emissions through reducing demand. This includes familiar approaches, such as pricing carbon, increasing renewable energy and boosting energy efficiency.

Discussion on constraining fossil fuel supply has been more subdued. While the Paris Agreement adopted in December 2015 invited countries to say how they would reduce their emissions, it did not broach the subject of how to tackle the central cause of emissions: fossil fuels.

Tactics to constrain fossil fuel supply include removing subsidies, placing moratoria on new coal mines, placing a fee on fossil fuel production, creating funds to prevent fossil fuel development in developing countries, and persuading countries to hold back on approving fossil fuel infrastructure.

A working paper by SEI, released in 2015, outlined three reasons why curtailing fossil fuel supply has been slow to catch on.

First, it is less politically attractive. While politicians are able to sell the idea of demand reduction as enabling new industries to develop, attempts to shrink fossil fuel supplies can be expected to meet resistance from the coal, oil and gas industries.

Second, countries who cut their exports as a result of constraining supply cannot count the emissions reductions as their own. Since emissions are counted on a territorial basis, these reductions will be assigned to the nation that actually cuts their use of fossil fuels.

Third, there is the assumption that the market rules supreme and that only demand can be reduced. As long as there is a large appetite for fossil fuels, someone somewhere will produce the fossil fuels to feed it.

In the video below, Carbon Brief talks to:

  • Michael Lazarus, Senior scientist at the Stockholm Environment Institute US Center
  • Franz Matzner, Director of the Beyond Oil Initiative at the National Resources Defense Council
  • Carlos Larrea, Professor of Social Studies at the Universidad Andina Simón Bolívar
  • Frank Jotzo, Associate Professor at the Crawford School of Public Policy, Australian National University
  • Richard Denniss, Chief economist at The Australia Institute

Franz Matzner, director of the Beyond Oil Initiative at the Natural Resources Defense Council, challenges the idea that supply-side restrictions are more politically challenging. He tells Carbon Brief:

“I think that is a misnomer, a misperception. It all depends on the context you’re operating within and what barrier you’re trying to overcome. I think there’s an increasingly clear body of evidence, both from a socio-political perspective and from an economics perspective, that we’re not going to get to the climate goals we need to fast enough if we keep trying to find the path of least resistance, and find only one path, and the most palatable path.”

Here are some ways that people at the SEI conference have proposed constraining fossil fuel supply.

Moratorium on coal

Placing a moratorium on coal mines is one possibility that offers an unlikely opportunity to big coal companies: it raises the price of coal. Richard Denniss, chief economist at The Australia Institute, tells Carbon Brief:

“As Australia increases its coal production and coal exports, we’re actually pushing the world price of coal down. If you want to discourage people from using coal, you need the price of coal to be higher. So a moratorium on coal not only restricts supply, it increases price. The higher price can’t in turn induce anyone to build a new mine because by definition a moratorium prevents them doing that. So if we need high coal prices to discourage consumption of coal, but high coal prices encourage investment in new coal mines, the solution is to have a moratorium.”

The world has yet to answer the call of Anote Tong, the president of the small island nation of Kiribati, who called for a global moratorium on new coal mines in August 2015. Globally, 357 gigawatts of new coal power capacity was completed in 2014.

However, the idea is not beyond the realms of possibility. In December 2015, China announced that it would stop approving new coal mines for the next three years. The US followed a month later, announcing that it would halt new coal mining on public land for the next three years, while it undertakes a review of the impacts of coal production.

Protecting biodiversity hotspots

Maria Murmis, a research associate at the Universidad Andina Simón Bolívar, has been working on a proposal that would see countries being paid to keep fossil fuels in the ground in areas of high biodiversity, similar to the Yasuni ITT Initiative in Ecuador.

The Yasuni scheme ultimately failed. But with the Paris Agreement now sealed, Murmis believes it could be time to revive the idea on a global scale. She explains to Carbon Brief how this would work, and how revenues could be raised:

“Our proposal involves keeping fossil fuels in the ground in areas of high biodiversity value. Now, to do this, since it would be a large amount of foregone income, what we propose is a global fund – a fund under the United Nations Framework Convention on Climate Change — that would finance projects that are presented to keep certain deposits of fossil fuels in the ground. The funds would have to go to a low emissions development strategy. That means not only low emissions, but sustainable local development, with local participation, social equity and an equitable transition towards a new economy that drives away from fossil fuels and incorporates renewable energy.

This is about some people extracting oil and some people not extracting oil. So the people that are allowed to extract will have extra rent. The price will go up, because there’s less oil in the market, and they will have extra rent. We think of taxing that fund and having that money going into the fund, financing that fund.”

Coal tax

Frank Jotzo, an associate professor at the Australian National University, has another idea for constraining fossil fuel supply: imposing a fee on production.

This would raise coal prices and also provide a new stream of revenue to governments, says Jotzo. He explains to Carbon Brief how it might work:

“The idea is that a levy, or tax, on coal that is harmonised between the major producing and exporting countries could provide a significant source of revenue to coal-producing countries, which in turn could be used to ease the transition in the inevitable decline of coal, as the world moves to a lower carbon economy. It would be a harmonised approach, or collaborative approach, between the major producers, because if it’s just one producer implementing such an instrument then the effects of it will be quickly dissipated through increased production at lower prices in other countries.

“The fee would be levied at the production or export level, and so it would be the governments of fuel producing countries that receive the revenue from that fiscal policy instrument. In turn, you would see higher prices in world markets for coal, commensurately lower use of coal…It would leave those countries better off than the alternative, where it’s just the importers of coal that are putting their own taxes on, and all that money is staying in the countries that use coal rather than the countries that produce coal.”


Simon Caney is an academic at the University of Oxford who has started to grapple with questions of equity. “We need an ethics for the supply side,” he says.

“I think the values that people often invoke on the demand side apply here in a different format. Any just transition [away from fossil fuels] must honour human rights. So if we’re going to have an outcome where some people’s assets are stranded and they cannot use them, we need to find a way of stranding them so their human rights are honoured.”

This could mean giving the right to extract to the poorest, says Caney. However, it’s harder to make this argument than it may first appear, he adds. “This argument only goes if you don’t have access to other sources of energy.” That means, as soon as you take into account a country’s access to sources, such as hydroelectric or solar, the argument becomes less clear-cut.

Historical responsibility could also steer the debate, says Caney — the logical idea that those who have not benefited from the resources in the past should be the ones to benefit in the future. But what this could mean is that countries are due some kind of benefit in the future, but not necessarily the benefits that arise from directly burning fossil fuels.

Greg Muttitt, a senior advisor at Oil Change International, points out further complications in the equity argument. “There’s no right to extract, per se, any more than there are rights to pollute,” he says.

Some countries have simply won the geological lottery, by having large resources of fossil fuels beneath their land. “If we’re talking about equity, why should countries that have resources deserve any benefits from that?” he says.

In addition, fossil fuel extraction doesn’t necessarily lead to a better life for the benefitting country’s citizens. He uses the example of Iraq, which nationalised its oil industry in the 1970s, around the same time as oil prices went up. Saddam Hussein went on to use the revenue for ill. “I wouldn’t look at the Iraqi people as having benefitted from those rents,” he says.


In most cases, the ideas proposed are far from becoming a political reality, as their advocates willingly admit.

“In my country, this is stuff that’s well over the horizon. It doesn’t even cause a stir, because it’s way out there,” says Jotzo, of his idea for a fossil fuel fee.

“Like all of climate mitigation policy, it will be difficult, but I think it’s a fight worth fighting,” echoes Murmis, of her biodiversity hotspots proposal.

In Oxford, the overriding opinion was that the discussion of supply-side constraints on fossil fuels was still at an early stage, but worth having in addition to the more developed ideas on demand reduction.

Christophe McGlade, an oil and gas analyst at the International Energy Agency, tells Carbon Brief that the two discussions have to take place in tandem. He says:

“Clearly, both are very important, because if you have demand-side policies and completely ignore anything on the supply side, you’re going to get some quite large consequences coming through. It’s still a debate as to which side needs to lead. I would probably argue that the demand side has to take the first step. We need to start decarbonising things; consumers need to start demanding fossil fuels less before you’ll get some reactions from the supply side.

“But all demand-side policies should be designed with the supply-side reactions taken into account. For example, if you completely ignore how fossil fuel suppliers are going to react whenever you take away their main markets, you’re going to get some pretty strange things happening in the market. You can get some quite big carbon leakage from one fuel to another, from one country to another.”

Carbon Brief

18 Comments on "How Can Fossil Fuel Supplies Be Constrained?"

  1. Plantagenet on Thu, 29th Sep 2016 3:10 pm 

    In the US we’ve got a president who says he wants to reduce the use of fossil fuels but who has actually encouraged one of the largest and most rapid increases in fossil fuel production ever seen. Both oil and NG production have rocketed upward in the US over the last 8 years.

    Its hard to see how the world is going to reduce its use of fossil fuels given that kind of track record here in the USA.


  2. penury on Thu, 29th Sep 2016 4:39 pm 

    How many Angels can dance on the head of a pin?

  3. dave thompson on Thu, 29th Sep 2016 5:56 pm 

    The constraints are upon us it is called depletion and the end of the oil age.

  4. rockman on Thu, 29th Sep 2016 7:32 pm 

    I don’t enjoy pissing on their parade mostly because it’s so simple. All the ideas these folks design are not relevant because they have no authority to enact any of them. Only the politicians/govt’s have that power. And they’ll retain that power only with the concurrence of the voters. And the great majority have not only showed interest in reducing ff consumption but want to increase it as a way to improve their lives.

    And it has nothing to do with accepting climate change IMHO.

  5. Apneaman on Thu, 29th Sep 2016 8:10 pm 

    Get the Democrats on it. They believe AGW is a serious threat. Obama been saying it every week for 8 yearsrunning. I’m sure he will make a big move on fossil fuels before he leaves. Cause he caresNstuff.

    Obama Admin Quietly Enables Oil and Gas Drilling on Public Lands and Waters, Weakens Endangered Species Act – Thursday, September 29, 2016

    “As eyes turned to the most viewed presidential debate in U.S. history, the Obama administration meanwhile quietly auctioned off thousands of acres of land for oil and gas drilling in national forests, opened up 119 million acres for offshore drilling leases in the Gulf of Mexico, and delivered a blow to the Endangered Species Act.

    The Endangered Species Act rule change followed a multi-year lobbying campaign by the oil and gas industry and occurred the morning before the debate unfolded.

    The leasing decisions came just weeks earlier, with the most recent one taking place as an online rather than in-person drilling lease auction, the product of industry and U.S. government backlash against efforts such as the Keep It In The Ground campaign which aim to block fossil fuel project development.”

  6. Apneaman on Thu, 29th Sep 2016 8:15 pm 

    This shit is hilarious.

    Trump Economic Adviser “Pushing” for Climate Denier and Fossil Fuel Apologist to Head EPA

    “Stephen Moore — economic adviser for Republican Party presidential candidate Donald Trump’s campaign — recently told Politico’s Morning Energy that he is “pushing” to have a climate change denier and fossil fuel promoter, Kathleen Hartnett White, named as head of the U.S. Environmental Protection Agency (EPA) if Trump is elected president in November.

    Buried in Politico’s daily newsletter on September 28, the news comes as the Trump campaign has also announced that another climate change denier — Myron Ebell of the Competitive Enterprise Institute (CEI) — is leading Trump’s EPA transition team.

    White currently serves as a fellow-in-residence at the Texas Public Policy Foundation, which, like CEI, is funded by ExxonMobil and Koch Industries, and she also serves on the Trump campaign’s economic advisory team.

    White co-heads the Texas Public Policy Foundation’s Fueling Freedom Project, which has among its stated goals to “explain the forgotten moral case for fossil fuels” and “end the regulation of CO2 as a pollutant.”

  7. rockman on Thu, 29th Sep 2016 8:18 pm 

    Perhaps a better title: How Can Fossil Fuel Consumers Be Constrained?

  8. makati1 on Thu, 29th Sep 2016 8:33 pm 

    Ap, that would make no change as the current one is also those things. Personally, I’ll take the Trump bullshit over insane Hillary’s nukes every time. With her finger on the nuclear button, she may cough and blow up the world. Parkinson’s is not a joke.

  9. Apneaman on Thu, 29th Sep 2016 8:35 pm 

    Who da thunk it?

    New Report by Top Senators Details Financial Ties Between Fossil Fuel Industry and Clean Power Plan Opponents

    “On September 27, the U.S. Court of Appeals for the District of Columbia heard oral arguments in a major challenge to the Clean Power Plan, West Virginia v. U.S. Environmental Protection Agency — an enormously high-stakes legal battle, that could determine whether Obama’s climate plan is ever put into effect.

    The stakes are high not only for the environment, but for fossil fuel companies — and those companies have poured enormous sums of money into efforts that would help ensure the Clean Power Plan never goes into effect, according to a report issued this week by four members of Congress.”

    “Large sums of money — over $100 million — have been funneled from the fossil fuel industry to key players in the litigation, the report concludes.”

    It will never stop, but it don’t matter really, except for the timing, because the humans have already gone too far and are waiting on the lag time. The more fossil fuels burned along with more people consuming and more development and pollution and all the rest of it, the sooner the end will come. Fast or slow? Not really a choice for the rapacious ape.

  10. Apneaman on Thu, 29th Sep 2016 9:33 pm 

    rockman, got any proof of consumers spending billions over decades to confuse the public on the science and buy off politicians and regulators? No you don’t. The proof of the oily cunts malfeasance is a matter of public record and too numerous to list. I wonder about all the shit we don’t know. Y’all a bunch of fucking liars rockman. I bet you been lying every damn day since you got in the cancer biz. Yeah the “consumers” own a share of the responsibility and are going to pay the price like your cancer cith Houston did earlier this year. We have long established the fact that the wealthy countries are the most responsible, but you and your weasly cohorts have forfeited your right to weigh in on the matter, so shut the fuck up about it. Got it? You just keep drilling and lying as fast as you can to help speed the humans to their doom. We know thats your job, but you have been asked by more than just me to stop your defense and blame shifting of your scum fuck industry. You just can’t seem to resist trying to absolve yourself at every turn. Those who know their history know that the car culture world we live in N America did not organically spring up out of consumer desire. It was planned by special interests including oil & politicians – they conspired to ruin transit nation wide, and did, and to get as many into a vehicle as they could. Took away the public’s choice and left them with very little in the way of any other transportation options. Took away their choice just like the multi billion dollar denial & corruption campaign has made sure the public would be too confused to know they had a choice and just how awful the consequence are going to be. Criminals going way back to the very beginning of the industry and it has not abated one bit – grown actually. Just another cartel with as much blood on its hands as any drug cartel – probably more. It’s not just oil either, the corporate state has conspired to leave the public with little choice in most areas with their racketeering – healthcare, government education, food. higher education, a mile long list of all the things you can’t do with or on your own property and to comply always means you putting more money into the system. Even the switch from calling people citizens to “the consumer” was propaganda from right wing think tanks. Anyone who understands the truly awesome effect of the relentless propaganda/marketing bombardment by the corporate state on the humans, from birth to death, knows that sheeple is a perfectly adequate analogy since we all penned in. In the Nuremburg trials not everyone who was found guilty was hanged. Only the worst of a bad bunch were hanged and that’s what y’all oily mofo’s are.

  11. rockman on Fri, 30th Sep 2016 6:48 am 

    “…got any proof…?” Yes: decades of voting results with the fossil fuel consumers repeatedly electing politians who supported their right to be the single largest direct source of GHG. I see you’re still having difficulty accepting your fair share of the collective guilt. LOL.

  12. peakyeast on Fri, 30th Sep 2016 7:31 am 

    Uh – I wanted to vote Trump to get nuclear war… Now it seems everybody agrees that we have to vote Hillary to get nuclear war…

    I will never understand politics.


  13. Cloggie on Fri, 30th Sep 2016 7:45 am 

    Yes: decades of voting results with the fossil fuel consumers repeatedly electing politians who supported their right to be the single largest direct source of GHG

    rockman, you have to admit that the US political system secured itself handsomely against excessive forms of democracy such as unwanted parties. Every modern western nation has meanwhile a Green party (unfortunately they come with Cultural Marxist garbage and Third-World-ism).

    The US political cartel aka the Government Party, of which Dems and Reps are the left and right wing, where no intruders are desired by the system loyalists:

    In 2016 Dems and Reps only exist to fool the boobs into thinking that they have real demockressy and shit, where in reality they always get the government party, run by the sanhedrin:

    In the US there would be a lot of support for an environmental party, comparable to Europe.

    But George Soros is more interested in “social issues”, read ramming the entire world into a single UN-run power structure via his “open society” scam, than in distracting environmental issues.

    And as long as Georgie boy isn’t sent into retirement and made to enjoy a heavy duty industrial strength long stay in a five star wellness resort, deep into eastern Poland and spend some quality time there, the threat of WW3 will be looming over our heads.

    In the Nuremburg trials not everyone who was found guilty was hanged. Only the worst of a bad bunch were hanged

    Yeah sure. The worst criminals in history, I mean the Soviets, putting on a judge robe, together with their US city nuking palls, while rubbing their hands and dividing the European loot between them, while creating the moral patina to justify the looting. That’s Nuremberg for ya.

    #1 in the Nuremberg pecking order, Jackson
    this trial can do infinite harm for those countries with the people of the United States. And the same is true of our Russian relationships. The Germans will certainly accuse all three of our European Allies of adopting policies which forced them to war. The reason I Say that is that captured documents which we have always made that claim-that Germany would be forced into war. They admit they were planning war, but the captured documents of the Foreign Office that I have examined all come down to the claim, “We have no way out; we must fight; we are encircled; we are being strangled to death.

    But Jackson knew what was expected from his and against better knowledge condemned the hapless Germans for crimes they didn’t commit.

    And the #2, American senator Thomas Dodd:

    You know how I have despised anti-Semitism. You know how strongly I feel toward those who preach intolerance of any kind. With that knowledge — you will understand when I tell you that this staff is about seventy-five percent Jewish. Now my point is that the Jews should stay away from this trial — for their own sake.

    The preferred method to get the desired “confessions” was testicle kicking. Beyond repair that is.

    Ah well, the Soviet empire fell flat on its face. And while we are waiting for the… um… “other shoe to drop”, we can discuss peak oil as a convenient fig leaf to hide the real collapse that’s coming: “social” and subsequent massive geopolitical changes.

  14. joe on Fri, 30th Sep 2016 8:52 am 

    Fossil fuel constrained? Is that a serious question? Ok, lets say in ten years renewables gets really cheap, then that might make a dent in demand, but supplies? We are aware how this all got started right? Energy density, human labour versus machine etc. I mean even if Opec makes a deal, how does that help consumers? It only helps oilystan jihadi gangsters. Meh!

  15. Apneaman on Fri, 30th Sep 2016 10:58 am 

    rockman, unlike you I admitted my more than fair share of the responsibility as soon as I showed up on this site by informing the readers that I was a retired Boilermaker who built and repaired much of Western Canada’s cancer infrastructure and even some in the US. Also, unlike you, I actually made a many years long effort to reduce my cancer contributions and try and get other to do the same in the foolish hopes of leaving something of a habitable world to young people like your daughter. I have no children. Guilt? I have none, just responsibility and it’s got as much or more to do with where and when I was born as anything other factor. That’s not the point though. The point is that your continued defense and promotion of the industry is a fucking joke. How many around here do you think you are fooling with that think tank story of benign energy providers just giving them what they demand? If it’s true then it has to be true for drug dealers and those who make and sell child pornography. They too are just giving their customers what they demand. Benign kidde porn providers meeting the needs of American sickos for 150 years. God bless em!

    I can understand how given your life long social position in the oily texass social monkey hierarchy that you could not maintain it by going all climate change warrior and anti industry whistleblower. I can easily imagine if I was in your position with a disease advanced enough to put me in a wheelchair that I would want to make as much money as I could for my wife and kid while I could and especially if I had long understood that if not me someone else will do the job. I would do that too, but what I wouldn’t do is go around and try and justify it all to the boys online with oily rightwing think tank talking points. No I would not want to embarrass myself that way since many of the boys full well know when someone is parroting propaganda that only the dumbest of the sheeple still believe.

    rockman, if the fossil fuel consumers are “repeatedly electing politicians who supported their right to be the single largest direct source of GHG.”

    Then what is the purpose of buying off 88% of congress, the multi billion dollar denial campaign going back to the 1970’s and an ever increasing amount of machinegun advertizing, like “I’m an energy voter” campaign et al paid for by the API?

    Please explain what is the purpose of spending that huge amount money and energy if the voter has already decided? Isn’t that a total waste of money? From a shareholder standpoint, that expense is unjustified if the voter is already decided and grounds for replacing the CEO and other top exes and possibly criminal charges. Just think how much more my dividends would have been had not you fools needlessly spent all that propaganda money trying to convince the already convinced.

    Methinks you have turned everything around – as is the strategy courtesy of your think tanks.

    This is from 2013 – probably higher now.

    88% of Congress On Gas Industry Payroll As Campaign Donations Hit Record Level

    This is just Exxon, but it’s pretty much the same all around.

    The Long Tale of Exxon and Climate Change

    Investigation Exposes Revolving Door Between Fossil Fuel Lobbyists and Politicians

    Seems like an awful lot of trouble and expense to go to for voters who are already convinced. So, either all the oily managers are incompetent retards or your argument is shit.

    See what I just did rockman? That’s called using logic and the public record (evidence) to expose your lame assed think tank rhetoric.

  16. Apneaman on Fri, 30th Sep 2016 11:26 am 

    Uh oh. Looks like ole Rex Tillerson’s bonus may be in jeopardy.

    New type of #ExxonKnew lawsuit could open floodgates for more cases

    “Exxon’s climate change-related legal problems are growing by the day.

    In addition to investigations by several state attorneys general and a separate inquiry on the part of the Securities and Exchange Commission, a new lawsuit filed in federal court on Thursday by a Massachusetts-based environmental group alleges the oil and gas giant has failed to take climate science research (including its own data) into account in operating an oil facility in the Boston area.”

    “”ExxonMobil has long been well aware of the present impacts and risks of climate change. Despite knowing of the certainty of rising temperatures and rising sea levels since as early as the 1970s, ExxonMobil did not use its findings to prepare its Everett Terminal for such risks,” the court filing states.”

    “America’s coastlines are dotted with oil and chemical tanks and other facilities that are at risk from rising seas.”

    “America’s coastlines are dotted with oil and chemical tanks and other facilities that are at risk from rising seas.”

    Looks like they going to have to expand the list of superfund sites in the near future.

  17. Apneaman on Fri, 30th Sep 2016 11:54 pm 

    Exxon’s Big Bet on Oil Sands a Heavy Weight To Carry

    Tar sands account for 35% of the oil giant’s liquid holdings, up from 17% a decade ago, and may come under scrutiny in the SEC’s probe of its reserve accounting.

  18. Apneaman on Sat, 1st Oct 2016 10:47 pm 

    And the goalpost moving continues apace.

    New Maps Label Much Of New Orleans Out Of Flood Hazard Area

    “”So then I started challenging the system, and I put in places where I knew that there had been 10, 12 feet of water during Katrina, and even many of those places would no longer be subject to the flood insurance requirement,” he says. “I thought I had to be using the program wrong!”

    He was not. The new maps are like a bureaucratic magic trick. At the stroke of midnight, the federal government waved its wand, and Friday morning more than half of New Orleans woke up in a land safe from storms and flooding.

    Statistically. For insurance purposes.”

    I think FEMA took advantage of technology – CAD Computer Assisted Deception

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