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A depot used to store pipes for TransCanada Corp.’s planned Keystone XL oil pipeline is seen in Gascoyne, N.D., in this file photo taken Nov. 14, 2014.


As U.S. President Barack Obama and a Republican-led Congress spar over the proposed Keystone XL pipeline, a new analysis of worldwide fossil-fuel reserves suggests that most of the Alberta oil the pipeline is meant to carry would need to remain in the ground if nations are to meet the goal of limiting global warming to two degrees Celsius.

The study, published Wednesday in the journal Nature, does not single out the Alberta oil sands for special scrutiny, but rather considers the geographic distribution of the world's total fossil fuel supply, including oil, coal and natural gas reserves, and their potential impact on international efforts to curb global warming.

Advocates of Keystone XL point out that the oil sands are not as large a contributor to climate change as other fuel reserves elsewhere in the world, particularly coal. The study does not disagree with this assessment, but makes clear that a concerted global effort will be needed to maintain at least a 50-per-cent chance of staying under the two-degree limit – a goal agreed to by the majority of nations, including Canada, under the 2009 Copenhagen accord.

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The current pace of oil-sands production – roughly two million barrels a day and climbing – would contradict this aim, the study finds.

Using a computer model, economists at University College London calculated both the economic value and carbon content of fossil fuels around the world and looked at the most cost-effective way for fossil-fuel development to proceed while trying to hold to the two-degree global target.

As previous studies have already shown, roughly two-thirds of fossil fuels that can already be extracted at a competitive price will need to remain unburned before 2050 to achieve this goal. The new analysis shows that in order to optimize costs and benefits, that two-thirds cannot be evenly distributed around the world, but must be skewed toward more carbon-intense fuels situated far from potential markets. The computer model suggests that it will be next to impossible to meet climate targets if those fuels are tapped to a significant degree, even as producers continue to develop these reserves.

"I think the most sobering thing from this study is the gulf that it reveals between the declared intention of the politicians and the policy-makers to stick to two degrees, and their willingness to actually contemplate what needs to be done if that is to be even remotely achieved," said Paul Ekins, a co-author of the study.

In broad terms, the analysis reveals that meeting the two-degree limit will require the curtailing of coal burning to the extent that 82 per cent of global reserves, primarily in the United States and the former Soviet Union, should stay in the ground. Natural gas, which is less carbon-intense, is the most favourable fuel in the analysis. The authors stress that gas will be essential in the transition to a low-carbon future.

Oil occupies a middle ground in the study, but as the optimized model shakes down, Alberta's oil sands end up largely unused.

Domestic estimates of Alberta's oil reserves come in at about 168 billion barrels, with hundreds of billions more available for extraction if future oil prices make the resource more attractive. The study uses a more conservative estimate of 48 billion barrels as the current reserve and then finds that only 7.5 billion barrels of that, or about 15 per cent, can be used by 2050 as part of the global allotment of fossil-fuel use in a two-degree scenario. The figure assumes that new technologies will make possible a reduction in the carbon intensity of oil sands production. If this does not happen, the authors say, then even less of the oil-sands reserve should be extracted.

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Other oil-producing nations including Venezuela, where vast reserves are deemed to be about as carbon-intense as Alberta's to extract, are in a similar position.

The world is on course for about five degrees of warming over the coming century, which climate scientists say could lead to profound environmental and social impacts. But if international policies put a cost on carbon to avoid those impacts, the result could render investments in the oil sands, including Keystone XL, obsolete.

"This highlights the largest risk in oil-sands production," said Andrew Leach, a professor of energy policy at the University of Alberta, who was not involved in the study. Dr. Leach noted that the study does not show that stopping the XL pipeline is either necessary or sufficient for achieving the two-degree limit.

However, opponents of the pipeline will undoubtedly be bolstered by the analysis that ties climate-change outcomes to oil sands development, a factor that Mr. Obama has said he would consider when weighing a decision to approve the project or not. On Wednesday, the White House said the President would veto any legislation from Congress to fast track the pipeline's approval.

Dr. Leach said that the economically optimal scenario defined by the analysis is unlikely to be implemented globally for a host of political reasons.

Chris McCluskey, director of communications for Natural Resources Canada, did not speak directly to the Nature study but noted that the International Energy Agency projects that, by 2035, the world will need roughly a third more energy than it produces today.

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"According to this analysis, the majority will come from fossil fuels, even under its most stringent greenhouse gas reduction forecast," he said in an e-mail. "The choice is whether to use energy from a secure, environmentally responsible, transparent country like Canada, or to seek energy from less stable countries without responsible environmental policies."

In a commentary accompanying the Nature paper, Michael Jakob and Jérôme Hilaire from the Potsdam Institute for Climate Impact Research in Germany note that "only a global climate agreement that compensates losers and is perceived as equitable by all participants can impose strict limits on the use of fossil fuels in the long term."

In their analysis, the authors of the study also looked a the potential impact of carbon capture and storage technologies (CCS) and found that the result was not enough to change the overall picture, in part because such technologies are not expected to come online rapidly enough to allow fossil fuel burning without consequence.

"That is not to say that CCS is not important," co-author Christophe McGlade said. "Without it, it is even harder to reach the two-degree limit."

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