Oil, ports & ships vs. fast rising seas

Oil, ports & ships vs. fast rising seas: It’s getting hotter and hotter accelerates sea level rise (SLR). Year-to-date global warming breached 1.5°C in January but has now risen to an alarming 1.61°C by April 2024. If this persists, we could very well see disruptions sooner, rather than later, especially if we are not prepared.

So this month, we deep dive into how the entire global oil supply chain is in for a crude awakening with just 1m of SLR disrupting key oil ports and global seaborne oil trade. Also, with US oil ports at risk, see how Louisiana is protecting its coast and as rising seas could sink the entire shipping industry, where is shipping on net zero? Can green ammonia help?

We’re very worried – seas are already rising faster than we think – there is rapid ice loss from Greenland and Antarctica plus thermal expansion from hotter oceans. The IPCC has warned that 2m of SLR cannot be ruled out by 2100 on our current emissions path. Unstoppable SLR will be unleashed once we pass the tipping points and sadly, we are already in the danger zone. It’s worth remembering here that 2°C is too hot for ice.

There is a “Crude Awakening” ahead – our new report showed that almost two-thirds of oil produced globally is shipped by oil tankers, yet stress tests of the world’s Top 15 Tanker Terminals to various levels of sea level rise show that 12 will be impacted at just 1m.

This fresh take on oil has sobering implications for both energy and economic security as well as sovereign credit ratings, especially for Japan and South Korea, as they are particularly exposed with almost 100% of their oil imported by sea. Even we were surprised by our findings of oil’s vulnerability to rising seas – the Japan & South Korea factsheets are must-sees, as is the Spotlight Japan & South Korea section.

With key drivers of SLR running well ahead of projections, we need to slow down, not accelerate rising seas. Yet, the Americas are leading a last hurrah to pump more oil during the time when we desperately need deep emission cuts. According to the IEA, the US is driving the charge with an additional 2.6mn b/d – did you know this is equivalent to the entire 2022 crude oil production of Iran?

The inability to peak oil by 2030 could sink us all – see 5 reasons why. So don’t get blindsided – check out the report. We clearly have some serious emission cuts to deliver – so where to begin?

For starters, a net zero shipping industry is a must for energy security and the global supply chain since ships carry over 80% of the world’s traded goods. The sector is also shooting itself in the foot by accelerating rising seas if it doesn’t manage to decarbonise; especially when oil tankers make up almost 30% of global fleet capacity. Journey length/emissions are increasing due to the Red Sea conflict and Panama Canal drought.

Indeed, there is growing pressure for the industry to decarbonize and the International Maritime Organization has set a net zero 2050 target but as Maritime Industry Researcher, Don Maier shares it’s not that simple though changes are coming. See what’s holding back the transition and what the industry is asking for.

Meanwhile, Jasper Verschuur and his team released a report on the optimal fuel supply of green ammonia to decarbonise global shipping. The report aims to show how in the long-term it could be viable and help solve some of the uncertainties around achieving decarbonization.

So how does green ammonia help shipping to decarbonize? What needs to happen? Are there any drawbacks? Verschuur answers these questions and more in our interview.

For a futureproof shipping industry, decarbonisation is not enough, ports must be adapted to rising seas. This is especially important for energy security – as our report shows port security is energy security.

Louisiana is no stranger to this interconnection. Following the devastating hurricanes of 2005, the Coastal Protection and Restoration Authority was formed as the single state agency for coastal restoration & protection. It developed the first Louisiana Coastal Master Plan, which is updated every 6 years.

We sat down with Beaux Jones, President & CEO of the Water Institute, to unpack the plan. See what is achieved so far – including unanimous political support – and how it is evolving with accelerating climate risks.

As the region most vulnerable to rising seas, Asia has no choice – it must not only get ready for locked-in sea level rise but also fast track transition to slow down rising seas. The good news is that the region can do this by:

1. Leveraging its prime position as the world’s largest importer of oil as well as its role as the dominant producer of refined oil & petrochemicals to spearhead global oil transition;
2. Prioritising the building of port resilience to ensure energy, economic & food security; and
3. Using its dominance in bunkering, maritime services, ship owning/building to revolutionise shipping.

Given that they are most at risk, Japan & South Korea must especially step up their glacial transition efforts – according to Carbon Tracker, even their car giants like Toyota, Hyundai & Kia can do better (see Tapping In column).

We’re currently charting a course for a crude awakening. To avoid systemic shocks to global energy, a grand transformation is on the cards. This offers great opportunities … so don’t miss out!  See 5 opportunities to lead transition & adaptation plus 5 to-do’s for the financial sector.

There is a lot at stake. The rapid rate of ice loss today means there is no time to waste. It’s time we wean ourselves off oil – far from providing energy security, our oil habit could sink all our futures. Start rethinking oil today!