Potential fossil fuel production could buy time for energy transition

Geologists are saying that the geological constraints of fossil fuel extraction are now such that the amount of primary energy that fossil fuels will make available globally each year, all sources combined, could start to decline from 2025-2030. Given that the world’s population is still growing rapidly, this decline will be even more significant expressed as a global per capita decline.

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Oil

Oil will be first of the fossil fuels to show a decline;  the volume of oil, covering the liquid fossil fuels (includes conventional oil, non-conventional oils (shale oil, and extra-heavy oils), liquids extracted from natural gas and synthetic oils) exploitable globally each year will decline from 2020, perhaps 2025, despite the rapid development of shale oil since 2010. The volume of conventional oil extracted – conventional oil represents three-quarters of the volume of all liquid oils – has already been on the decline since 2006¹. And the amount of energy supplied to the world population for use each year from all liquid oil has stagnated since 2011, as the volume of energy per barrel of oil has decreased significantly in recent years, as have the rates of energy return from oil exploration and extraction. In terms of the amount of energy  available per person globally the decline is already under way, given the continual rapid growth of the world population.

It should be added that the volume of oil placed on the world market, currently about half of the total volume produced, is already tending to decrease due to the increase in domestic consumption by exporting countries. Unless the latter decide very quickly to implement substantial fuel economy measures and/or use of alternatives (for example nuclear instead of fuel oil for their electricity production, as France did after the oil crises of 1973 and 1979), this trend will only increase! It’s also noteworthy that non-conventional and synthetic oils only represent a small fraction of world trade, and that conventional oil and natural gas liquids consequently represent the bulk of import-export.  The quantities of oil available on the world market will therefore start to decline even sooner than production. This particularly threatens countries, which, like France and the vast majority of European countries, do not have significant oil resources on their territory.

A few years ago a warning was issued in France via a major national newspaper ² It does not seem to have reached our government yet.

Natural Gas

Natural gas has essentially the same origin as oil and its production is subject to the same geological constraints. Its widespread exploitation having come a little later than oil, gas will also peak a little later than oil, 2030 or shortly afterwards, despite the development of shale gas.

Coal

Coal is the fuel whose future production is the most difficult to forecast. The date of the global peak cannot be as clearly identified as for oil and gas. It looks likely to be 2030-2035³. But it could be before. In fact, peak production in China, the country currently contributing about half of global production, seems very close⁴.                                                            Non-geological constraints                             Geological constraints are not the only factors governing production. There are also economic and political constraints: excessive prices causing a decline in demand, economic or political crises reducing annual production regardless of the geological  production protential.  Production peaks are then delayed and their height is lower, but the quantities extracted each year are then lower than without these crises. This does not mean that the total quantities produced are greater. One example is the 1973 and 1979 oil crises, which delayed the onset of world peak oil by at least 10 years, but also reduced the growth rate of oil production and as a knock-on, the rate of global economic development.

There are also climatic constraints. Fossil fuels are known to be the main emitters of anthropogenic CO2, and their use is therefore the main factor destabilising the climate. Climatologists are therefore trying to persuade people worldwide, without much success so far, to reduce their consumption of fossil fuels, particularly coal, which creates the most emissions per unit of energy produced.

And then there are health constraints: coal is of great concern in this area, because it also emits the most atmospheric pollutants likely to have a harmful effect on human health. We are talking about an order of magnitude of 2 million premature deaths per year, especially in the high-consumption Asian countries, but Europe, with around 30,000 premature deaths per year, including about 10,000 due to German emissions alone, is by no means immune!⁵ This danger could be considerably reduced if there were a real awareness on this subject leading to much more effective protective measures than those currently in use.  The very narrow focus of the media on the greenhouse effect, renewable energies and nuclear power does not currently lend itself to this.  A serious misunderstanding has thus been created in the public mind, which only hears about the risks of greenhouse gas emissions, which do not kill anyone directly, and by nuclear power, which has in fact killed almost no one, but we rarely hear about the risks represented by coal usage, which has already resulted in enormous numbers of deaths, and continues to do so, even in Europe. Even the alarming reports by Greenpeace (Greenpeace 2013⁶) and more recently by a group of NGOs (WWF et al., 2016⁷) have received little coverage in the media, which normally dedicates plenty of space to these organisations! However, in recent years, the risk posed by fine particle pollution has been increasingly mentioned.

Given the close relationship that currently exists between the availability of fossil fuels and the global economy, and remembering the damage caused to the latter by the oil crises of 1973 and 1979, the consequences of a rapid, irreversible and imminent decline in the amounts of energy that we can draw from all fossil fuels are potentially catastrophic. As industrial systems are characterised by inertia, these consequences can only be managed if very strong countermeasures are taken immediately. The hierarchy of industrial nations will also change rapidly, with those still having significant reserves of fossil fuels being able to cope longer than those who have run out already or never had any.

Alternative energy

Many are relying on wind and photovoltaic electricity to ensure the energy transition. While these alternatives are showing rapid progress at the moment, they will obviously only be able to play a secondary role in the face of such tight deadlines, because they would need truly fantastic growth rates to actually ensure the transition.  In fact, according to the International Energy Agency, their contribution was still only about 2% of the world’s primary energy supply in 2015, compared to about 82% for fossil fuels. For the 28 European Union nations, it was around 3% against 72%. For France, it was around 1.5% and 46%, with the relatively small contribution of fossil fuels being due to France’s comparatively significant use of nuclear power. The chances that wind and solar energy can compensate for the decline in fossil fuels within the necessary time frame seem very slim. As for nuclear, its contribution to world primary energy supply in 2015 according to the International Energy Agency was 4.9% for the world, 14.9% for the 28 European nations and 45.2% for France. Nuclear power is therefore also unlikely to be able to offset this decline within the required timeframe, except in France.

Of course, these analyses are not based on an exact science: there are still uncertainties and disagreements over estimates of the remaining fossil fuel reserves and future production rates. One can always hope for a miracle along the lines of unexpected discoveries of previously unknown types of deposits, or technological revolutions. We do need to perfect the analyses and models with which we attempt to predict possible future production levels, but also to create economic models which would make it possible to link the quantities of energy (and not just the market value) produced, to their effects on the economy. It is very surprising, given the major importance of the subject to global geopolitical stability, that so few resources are currently devoted to it by economists.

But we need to work with the likely scenarios: the probability of the beginning of a decline in the total possible global supply of primary energy supplied by fossil fuels from 2025-2030 is high, as is the probability of an increase in demand for it as a result of demographic growth and the aspirations of large numbers of people to a better standard of living.  This heralds considerable turbulence in the global economy and society and perhaps even a crisis point for civilisation in industrialised countries, so great is the importance of fossil fuels to how they are set up and run.

Europe’s current energy policy is surreal if you take these considerations into account.

As far as Europe is concerned, this trend is especially threatening:  for all fossil fuels, production peaks have already mostly been reached in Europe, coal in 1982, oil in 2000 and gas in 2004. Only one country, Norway, still has something of a future for oil and gas, and there are two countries with a future in coal: Germany for lignite and Poland for “hard coal.” Europe will have to rely more and more on the world market, which is already shrinking, as has been seen for oil.  It will find itself competing more and more fiercely with heavily populated countries with increasing consumption, mainly because of the rapid development of automotive transport in countries such as China and India.

The most sensible energy policy that Europe could follow is therefore to anticipate the decline of fossil fuels, primarily oil, by managing the decline rather than having to suffer it passively. The very first priority of this policy should be to seek the means to adapt to a gradual, but enforced and sustainable reduction in our oil supply over the span of a few short years.

The logic of this policy would then be to put as many resources as possible into rapidly reducing consumption in the two sectors that consume the most by far, that is, housing and transport. But this is not at all what we are seeing actually happen: the bulk of resources are being devoted to electricity production, which in Europe in recent times has barely used oil, and more particularly on the development of wind and solar photovoltaic electricity generation, which are intermittent, and therefore unusable without the support of dispatchable power stations.  This is probably a long-term problem, due to a lack of sufficiently large electricity storage facilities. These dispatchable power stations are, in Europe, mainly fossil fuel, coal and gas power plants!

France’s energy policy is the most surreal of all.  One might even call it masochistic:  the main trend is for the gradual closure of nuclear power plants in favour of wind and solar photovoltaic, imitating Germany, where this policy has only led to increases in the price of electricity without decreasing its consumption of fossil fuels, and in particular oil, in the slightest.  Yet it is the level of nuclear power generation that has enabled France to almost completely decarbonise its electricity and in so doing has allowed it to reduce its fossil fuel consumption and carbon dioxide emissions to a level that is by far the lowest of all the major industrialised countries! The closure of nuclear power plants in France will essentially lead to their replacement not by wind and solar photovoltaic power, but by gas or coal-fired power plants, which are cheaper, as is now the case in Japan.

It is crucial that France pulls itself together to make the best possible use of the best asset it has in an energy transition that will inevitably be constrained by the availability of fossil fuels, namely, its nuclear power – rather than throwing it away. Nuclear power in France has already largely replaced coal and gas in electricity production. It could also, amongst other things, mostly replace oil’s main functions: transport, with the development of electric powered vehicles, and the production of hydrogen used to produce biofuels; heating, with the use of electric heating, but also by the development of heat pumps in a better insulated setting and co-generation of nuclear heat electricity. This policy would also be the most effective in rapidly reducing our CO2 emissions, as climatologists would have us do.