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Oil unlikely to be fully exploited because of climate concerns

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Staff writer ▼ | October 14, 2015
The world’s oil resources are unlikely to ever be fully exploited, BP said, due to international concern about climate change.
Spencer Dale
Ecology   The statement by the BP chief economist
The statement by the group’s chief economist is the clearest acknowledgement yet by a major fossil fuel company that some coal, oil and gas will have to remain in the ground if dangerous global warming is to be avoided.

“Oil is not likely to be exhausted,” said Spencer Dale in a speech in London. Dale, who chief economist at the Bank of England until 2014, said: “What has changed in recent years is the growing recognition concerns about carbon emissions and climate change.”

Scientists have warned that most existing fossil fuel reserves must stay in the ground to avoid catastrophic global warming and Dale accepted this explicitly.

“Existing reserves of fossil fuels – i.e. oil, gas and coal – if used in their entirety would generate somewhere in excess of 2.8trn tonnes of CO2, well in excess of the 1trn tonnes or so the scientific community consider is consistent with limiting the rise in global mean temperatures to no more than 2C,” he said.

“And this takes no account of the new discoveries which are being made all the time or of the vast resources of fossil fuels not yet booked as reserves.”

Dale said the rise of shale oil in the US, along with climate change concerns, meant a “new economics of oil” was needed. “Importantly, it suggests that there is no longer a strong reason to expect the relative price of oil to increase over time,” he said.

The low oil price over the last year has led to billions of dollars of investment being cancelled.