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Dynamics of the oil transition: Modeling capacity, depletion, and emissions

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  • Brandt, Adam R.
  • Plevin, Richard J.
  • Farrell, Alexander E.

Abstract

The global petroleum system is undergoing a shift to substitutes for conventional petroleum (SCPs). The Regional Optimization Model for Emissions from Oil Substitutes, or ROMEO, models this oil transition and its greenhouse gas impacts. ROMEO models the global liquid fuel market in an economic optimization framework, but in contrast to other models it solves each model year sequentially, with investment and production optimized under uncertainty about future prevailing prices or resource quantities. ROMEO includes more hydrocarbon resource types than integrated assessment models of climate change. ROMEO also includes the carbon intensities and costs of production of these resources. We use ROMEO to explore the uncertainty of future costs, emissions, and total fuel production under a number of scenarios. We perform sensitivity analysis on the endowment of conventional petroleum and future carbon taxes. Results show incremental emissions from production of oil substitutes of ≈ 0–30 gigatonnes (Gt) of carbon over the next 50 years (depending on the carbon tax). Also, demand reductions due to the higher cost of SCPs could reduce or eliminate these increases. Calculated emissions are highly sensitive to the endowment of conventional oil and less sensitive to a carbon tax.

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  • Brandt, Adam R. & Plevin, Richard J. & Farrell, Alexander E., 2010. "Dynamics of the oil transition: Modeling capacity, depletion, and emissions," Energy, Elsevier, vol. 35(7), pages 2852-2860.
    • Handle: RePEc:eee:energy:v:35:y:2010:i:7:p:2852-2860
    DOI: 10.1016/j.energy.2010.03.014
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    5. Gregory F. Nemet and Adam R. Brandt, 2012. "Willingness to Pay for a Climate Backstop: Liquid Fuel Producers and Direct CO2 Air Capture," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
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    7. Brandt, Adam R., 2010. "Review of mathematical models of future oil supply: Historical overview and synthesizing critique," Energy, Elsevier, vol. 35(9), pages 3958-3974.
    8. Kim, Seunghyok & Koo, Jamin & Lee, Chang Jun & Yoon, En Sup, 2012. "Optimization of Korean energy planning for sustainability considering uncertainties in learning rates and external factors," Energy, Elsevier, vol. 44(1), pages 126-134.
    9. Lin, Boqiang & Wesseh, Presley K., 2013. "What causes price volatility and regime shifts in the natural gas market," Energy, Elsevier, vol. 55(C), pages 553-563.
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    11. Okullo, Samuel J. & Reynès, Frédéric, 2016. "Imperfect cartelization in OPEC," Energy Economics, Elsevier, vol. 60(C), pages 333-344.
    12. Hallock, John L. & Wu, Wei & Hall, Charles A.S. & Jefferson, Michael, 2014. "Forecasting the limits to the availability and diversity of global conventional oil supply: Validation," Energy, Elsevier, vol. 64(C), pages 130-153.

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