Mr. Greg Muttitt:

I thank the Chair and also Deputy Bríd Smith. I am very honoured to address the joint committee on the Bill which is of great national and I believe global significance. I hope I can contribute to the committee's deliberations.

I am research director of Oil Change International, a climate and energy think tank.

My research focuses on what climate limits mean for energy production, in particular fossil fuels. Members have copies of my written statement and my slides. I will summarise the statement and refer to some of the slides. I will not go into the details of my research, but I will be happy to do so during the questions.

There is no need to tell members that the world is not on course to achieve the Paris Agreement goals and that Ireland is not on course to achieve either its climate commitments under EU legislation or its longer-term targets. The reason for this is an excess of fossil fuels in energy systems. With acknowledgements to my fellow witness, I will show a slide with some data taken from the Sustainable Energy Authority of Ireland, SEAI, projections of fossil fuel use in Ireland out to 2030, which I have converted into emissions using Intergovernmental Panel on Climate Change, IPCC, emissions factors, and compare that with the red lines in that graph for the target of reducing emissions from energy use by 80% to 95% by 2050. Members will see that while the numbers only go as far as 2030 there is too much oil and gas to be on course for the longer-term target.

I will share two pieces of my research with the committee. The first finds that achieving the Paris goals requires an end to the development of new fossil fuel projects. The second finds that, as Deputy Bríd Smith mentioned, natural gas is part of the problem, not part of the solution. After addressing some of the common objections, I will conclude by explaining how this Bill will both help Ireland achieve its domestic target and also give Ireland an outsized influence in persuading other countries to meet their commitments towards the Paris goals.

The Paris goals are the starting point in my research. My next slide shows the carbon budgets associated with the Paris goals, which are taken from the IPCC. This is the total cumulative amount of emissions that the world can afford from 2018 on while meeting the Paris goals. In my research I have compared this with the emissions that will arise from the oil, gas and coal in fields and mines that are already developed and producing, that is, where the wells have been drilled, the pipelines have been built, the capital has been invested and so forth. That is the left-hand column in the next slide. The brown is oil, the blue is gas and the black is coal. This is the global picture and I have added on the top the most optimistic feasible further emissions from both land use change and from cement manufacture and the calcination process. It can be seen from the chart that the oil, gas and coal in already producing fields and mines would take the world beyond 2°. Even if we stopped burning coal tomorrow the oil and gas would take the world beyond 1.5°. In other words, we are not talking just about the reserves that are known but the reserves where the infrastructure has been built. The emissions from the already existing infrastructure are enough to cause a dangerous extent of climate change. I am flattered that Professor Sweeney referenced this study last week as well.

What happens if new fields or mines are developed beyond those in operation? They can only add to the left-hand column in the graph. Logically, that leaves two possibilities. The first is that if the world subsequently succeeds in limiting emissions to achieve the Paris goals, assets are stranded and fields and mines need to be closed down early with a loss to the financial markets, a disruption to the economy and a rapid loss of jobs. Alternatively, any new fields or mines will contribute to a lock-in effect, which I will return to, which will make us unsuccessful in limiting emissions. In that case we get very dangerous climate change with severe human and economic damage.

The economist, Nicholas Stern, made the same point last week at a meeting in the Vatican to mark the third anniversary of the Laudato si'encyclical. Lord Stern said that new high-carbon investments will either commit us to high emissions, which is the middle scenario on this slide, or lead to early scrapping of infrastructure, which is the top scenario, with stranded assets. We suggest that the best pathway for economies, people and biodiversity is a managed decline of global fossil fuel production over the coming decades, with a ramping up of clean energy. This analysis tells us that all new investments in energy infrastructure need to be in zero-carbon energy.

Moving on to my second piece of research, which I would like to share, some people have suggested that gas, because it has lower emissions than coal, can be used as a transition fuel on the way to clean energy. I will argue that this idea is fundamentally flawed in two respects. While the idea of a transition fuel might have made some sense 20 or 30 years ago when the world was first setting out to address climate change and the problem was less urgent, it does not fit within today's depleted carbon budgets. I apologise for the slightly more complicated slide here. The left-hand side of it focuses on the power sector, which is the largest user of the natural gas in Ireland, but this is a global picture of the power sector. On the left are current emissions from power generation. The middle bar shows the projections from the International Energy Agency of what power sector emissions will be in 2040. To the right of that is what would happen if we replaced all of that coal with lower emitting gas and assumes that we have no leakage of methane from the gas systems. It can be seen that the total emissions from the remaining oil and gas are approximately five times the green column on the right, which is the median of Intergovernmental Panel on Climate Change, IPCC, scenarios for the power sector that are aligned with keeping warming below 2° Celsius. It is not even 1.5° Celsius, but 2° Celsius. The conclusion of this is that we have far too much gas in the power system and we need to replace coal with zero carbon energy and reduce gas, not increase it. Gas makes the climate problem worse by slowing the transition. When one looks at the competitive costs of different energy sources, nine years ago, gas was primarily competing with coal and nuclear energy, but moving to the present day, the competition is largely between gas, wind and solar energy. The development of new gas will slow down the transition by competing with wind and solar energy.

I will show the lock-in effect. On the slide are projections for a discovery in the Porcupine Basin, which is Cairn Energy's Spanish Point prospect. The left-hand column shows the gas price that would be needed to make this viable, which is a bit higher than current levels, but if gas prices rise, Cairn Energy might decide to proceed. If, as a result of climate policy, gas prices subsequently fall, one ends up with a lose-lose scenario. As long as Cairn Energy is able to cover its marginal costs, even if it makes a loss on its original capital, it is in its interests to keep producing. That is a bit more than half of current gas price levels. If a climate policy is imposed which reduces the price, we end up with stranded assets, companies losing money, the emissions being locked in, the gas continuing to be produced and there still being a climate problem. This is what I mean by a lose-lose scenario.

I will skip over answering some of the objections because of limited time, but maybe they can come out in the questions. Moving to my last point, climate policy has traditionally focused on the point at which carbon is emitted into the atmosphere rather than the point at which carbon is extracted from the ground. Elementary economics tell us that markets are shaped by both supply and demand.

I have shown the committee the problems of gas competing with renewables and of the lock-in effect which demonstrates that addressing supply is a necessary part of addressing both demand and emissions. As such, we need to address simultaneously supply of and demand for fossil fuels. Several recent studies have found that in many cases emissions can be more effectively and more cheaply reduced by addressing supply than by addressing demand.

This Bill will help Ireland to achieve its climate goals. If Ireland approves the legislation, it will join Costa Rica, France, Belize and off-shore New Zealand in ending new exploration. We know from private conversations that several other governments are considering following suit. As this coalition of countries grows, momentum will build for ever larger producers to join in the same model as the Powering Past Coal Alliance. There are already active debates on ending new licensing in the major oil producers Norway, Canada and California. By ending new exploration, Ireland would join a growing coalition, thereby adding momentum and gaining more international influence. The Bill is necessary to achieve the Paris goals. It is correctly targeted at oil and gas production and the energy transformation it proposes is achievable. The Bill will help Ireland at home and on the global stage.