There follows a (long for a post!) article on the importance of Energy and the Challenges for the 21st Century. Much of the content will be covering old ground for people on this forum as it is designed as an introduction for those unfamiliar with Energy issues. Section 4 onwards, however, deals with how the Free Market might respond and how it might provide the only sufficiently powerful and decision making body to drive a meaningful response to the challenge.
Comments are welcome.
[align=center]The Second Energy Revolution
An Overview of the 21st Century Energy Challenge and the Guided Free Market Response.[/align][align=justify]Energy is at the root of Human civilisation. Having outgrown the ecosystem’s supply of energy, modern civilisation has built itself on an abundant but finite supply of fossilised energy. Some are already calling into question, the ability to extract sufficient amounts of oil, the preferred form of fossil fuel, to meet demand in the decades to come. At a time when climate change is uppermost in the mind of energy policy makers, how can civilisation create for itself, a sustainable energy future? In confronting this question, are we confronting the root of many of the issues facing the globe?[/align]
[align=center]“Till now man has been up against Nature; from now on he will be up against his own nature.” ~Dennis Gabor, Inventing the Future, 1964[/align]1. INTRODUCTION
The Energy Equation[align=justify]The Earth’s Ecosystem, by itself, produces no energy. The earth exists at a suitable distance from a large fusion reactor (called the sun) that converts matter to energy and spills it in great quantities across the solar system. This is a source of energy that is, as far as humans need be concerned, infinite. All conventional energy that fuels the ecosystem arrives on our planet in the form of the tiny fraction of the sun’s total energy that falls on our planet. [/align]
Life is Energy:[align=justify]In the millions of years since life started on our planet, life prospered by adapting and evolving to consume the maximum energy in its environment. Plant life evolved to grow and compete with its neighbours, to soak up sunlight, as well as energy in the soil from other decayed plants. Animals competed to eat these plants for energy and further animals evolved to consume their animal competitors for even more energy, each evolution gaining access to more solar energy derivatives and allowing their populations to flourish. Humans eventually evolved and learned to make tools to trap and cook animals, to grow food crops and in effect, to be by far the most effective life form on the planet at absorbing the energy from the sun, albeit indirectly, by manipulating the planets ecosystem to their benefit.
Humanity needs energy, and our outstanding ability to track it down and consume it is what sets us apart from the rest of evolutionary creation. The human population flourished over other species as a result, but this was kept in check by the available supply of energy (food, horsepower, etc), as well as technological limitations in capturing more energy through farming, etc. The energy chain from sunshine to humans was completely dependent on the planets overall ecosystem. Humans lived as a part of the ecosystem and worked within its constraints. Throughout human history, this interdependence between man and the ecosystem meant that the amount of energy humans consumed from the ecosystem was never enough to threaten the sustainability of the ecosystem itself, as to do so would threaten humanity itself. Over the last 150 years, however, humans have found ways to remove this dependence and rise above nature’s ecosystem.[/align]
The Human Energy Revolution: [align=justify]Humanity’s superior intelligence allowed it to continue to dominate global energy consumption and exponential changes started when one James Watt learned how to extract useful mechanical energy from heat generated from fossilised sunshine buried in the ground. The industrial revolution changed humanity forever.
Effectively, in the past 150 years, the human population has exploded on the back of its ability to extract fossilised energy as a result of sun that fell on our planet over the past Millions of years.
We are using the energy that our primitive evolutionary ancestors left behind for us, instead of living within the constraints of today’s ecosystem. In this way, humanity has moved from the sustainable use of the sun’s daily supply of energy to the unsustainable consumption of energy deposits resulting from sunshine over millions of years of planetary history. When we burn coal, we are releasing co2 filtered from the atmosphere by forests perhaps 70 million years ago, when we burn oil we release co2 filtered by forests 90 million years ago. (Neglecting theories of Abiogenic renewable creation of Hydrocarbons deep in the earth’s mantle). Nowadays, even the energy in the food we eat can be traced back to unsustainable forms of energy in fertilizers, irrigation systems and agricultural machinery.
This free abundance of energy has had massive benefits for human kind. It has lead to exponential growth in the human population, its technology and its understanding of the universe that conceived it. Abundant energy is what fuelled the creation of civilisation as we know it today. This has been no mean feat and can only be viewed as an impressive achievement of human endeavour. It has occurred in a mere flicker of the total time that life has been occupying our planet. We are living as members of an extremely privileged species in an extremely privileged slice of history. However, with these privileges come knowledge, foresight, technology and surely the responsibility to ensure that human progress does not stop here. [/align]
“We do not inherit the earth from our ancestors, we borrow it from our children.” ~Native American Proverb[align=justify]Our civilisation now faces its biggest challenge ever. We are approaching the end of our planets abundant supply of conventional age old energy. All indications are that at some point in this century, technology will strain to find ways to continue to provide fossil fuels at the ever increasing rate that humanity wishes to consume them. In order for humanity to continue to prosper, it must start looking for new, revolutionary ways to fuel its progress and in many ways redefine what human progress is. The precise time, nature and consequence of this event is the subject of heated debate, broadly around the concept of “peak oil”. [/align]
2. PEAK OIL[align=justify]Peak oil is based on the fundamental that oil is a finite resource. In extracting it, oil production rises from zero and at some point will once again return to (almost) zero as the extractable oil resource diminishes. Somewhere in the middle, oil production will reach a peak. As a result, the “oil era” is often divided into two distinct halves (Colin Campbell, ASPO
http://www.peakoil.ie). Firstly, “the Era of Abundant Energy” and secondly “the Era of Energy Constraint”, with both eras being separated by the peak in production.[/align]
The Era of Abundant Energy:[align=justify]In the first half the resource is abundant and its supply can simply be controlled by opening and closing the tap. Therefore, as the global economy grows and demands more energy, it is a simple matter of opening the tap some more to increase supply to match demand. In this era supply is abundant and the cost of energy is very low, so low in fact, that some controlling factor is necessary in order to ensure sensible use of the resource. In recent times, supply has been controlled by the oil cartel OPEC who attempt, quite successfully, to regulate the supply of oil so that the price of oil is low enough to fuel the global economy, and high enough to serve the oil producing countries’ interests. This has resulted in a relatively harmonious era of global energy supply. Many people dislike OPEC as it is a cartel and therefore does not conform to free market rules of play. However, it is not difficult to argue that the nature of the oil resource during this first half of the “oil era” requires such a body to control oil consumption.
Essentially, during the first half of the oil era, it is extremely easy to increase the supply of oil in order to meet demand, thereby fuelling economic growth as required. Only temporary supply issues, such as hurricane damage to refineries or political unrest or war in supply nations can affect the oil supply, causing “volatility” in the price of oil. Most large oil consuming nations hold large stores of oil to dampen price volatility. The effect of this volatility on the global economy can be staggering (as seen in the 1970’s) and should serve as a warning as to the effects of any permanent supply problems. [/align]
The Era of Energy Constraints:[align=justify]The second half of the oil era should occur at a time when approximately half of the entire extractable oil resource is depleted. Some argue that the event is happening now in 2005 or that it started in 2000. The United States Geological Survey estimate that peak production will occur around 2037, while others argue that we have until the later period of this century. The inherent difficulty in measuring remaining oil reserves as well as the lack of an independent body to report these reserves mean there is completely insufficient data on which to bottom out this argument.
Even the production output history from individual wells is often shrouded in secrecy. However, the peak oil event is inevitable and has been observed on a regional scale in both the USA (lower 48 states) and North Sea oil production output, which peaked in 1972 and 2000 respectively. It will occur on a global level when oil producing nations attempt to respond to increasing demand by opening the tap some more and find that they do not have the ability to increase production to meet global demand.
Of course, this will not be a singularly recognisable event and when it does happen, it will likely emerge over a number of years before the trend is unanimously accepted. The event is being called “peak oil” as it corresponds to the period when oil production output is at a maximum. From there, we enter the second half of the oil era, where the oil production trend is a decreasing one and oil cannot be depended upon to increase energy supply to an expanding global economy. Many argue that the event will bring a discrete change in the prosperity of the world. It will signal the end of OPEC’s cartel powers and the free market will take over price control, although it might not be prepared for the different oil market over which it will preside. [/align]
Why Oil?[align=justify]The debate centres on oil because modern society has designed itself to be extremely dependent on the free availability of this form of age old stored energy, although stores of coal and gas may be able supplement supply for some time longer, provided we can rapidly adapt to their use. Currently, 62.5 % of the world’s energy production is from Oil and Gas, with Coal providing a further 23.3% (USGS, 1998).
It is important to realise that the problem is not the total depletion of these forms of energy, but the inability to extract and refine them at the rates that humanity wishes to consume them. Irregardless of when peak oil will occur, the fact remains that at some point it will and humanity must find a means of fuelling progress while engaging in a transformation away from unsustainable use of stored fossil fuels towards sustainable forms of energy.[/align]
The Challenge[align=justify]These facts point to an impending energy crisis that is perhaps the first truly global challenge in that it will affect all nations, rich and poor, east and west. It will test not just our innovators and technology providers to the limit, but also our entire global socio-political power structures. It is unquestionably the defining challenge of the 21st century. Yet, the energy question receives nothing like the attention it deserves in mainstream global media or in the global policy maker’s debating houses. This, despite the fact that, many of the issues that do receive attention can be attributed back to this central issue. [/align]
3. TOWARDS SOLUTIONS:[align=justify]One obvious solution is to let the Earth regain its balance. This would involve a gradual return to interdependence on the ecosystem and more self sufficient living from the earth. The implication is that there must be a significant population “correction”, back to a level that the conventional ecosystem can tolerate. It might be possible to achieve such a correction harmoniously through birth control as energy depletion sets in, but in reality conflict and competition for energy resources is all too likely to result in a “correction” due to famine and war amid overwhelming human suffering and disharmony. Such a Malthusian catastrophe cannot be entertained as a practical solution. Therefore, more acceptable scenarios must be found and sought out by society.
In fact, there is significant hope in the technology and knowledge developed during the abundant energy era. This knowledge means that the capability to meet this challenge is certainly within our grasp. There are three main angles of attack:[/align]
1. Controlled Reduction in Energy Consumption per capita.Economic advance is not the same thing as human progress. ~John Clapham, A Concise Economic History of Britain, 1957[align=justify]Rather than reducing the population, it is of course possible to reduce the level of per capita energy consumption. This manifests itself as the drive for efficiency. In the capitalist world, this can be equated to financial efficiency and the driving down of the costs of a product or service. However, it is difficult to see how the cost of a product relates to the energy consumed in supplying it to the market.
For example, take a shirt purchased in a shop in Europe. The supply and demand for this desirable shirt in the European market puts the cost at €20. The shirt may have been manufactured in India for €2.50, where the costs involved include the energy used by the loom machine, the energy used in transporting the shirt to Europe as well as the energy consumed by the workers’ lifestyles in the Indian facility. So the shirt is now manufactured and transported to the market place. What happens the remaining €17.50 of the cost of the product in Europe?
The extra cost helps to fund “lifestyle” aspects of the product in the European market where quality, fashion and an enjoyable shopping experience are seen as desirable and affordable elements of society. In a prosperous western market like Europe, there are people employed to say that the shirt should be a certain colour and design, there are marketing people who create a quality brand and advertise it, there are well staffed retail boutiques where shirts are sold, health and safety officers, legal advisors and the various company shareholders seeking profit and their financial advisors. All of these people have wages that in turn fund their comparatively extravagant energy-consuming lifestyles. This must ultimately be funded through the cost of the product. (The more highly paid people in this chain may decide to re-invest a portion of their earnings and, as will be discussed later, have the power to play a very important role in averting any energy shortage problems)
So in a prosperous market, a very large proportion of the energy content of many modern products is, in fact, simply the energy required to uphold our lifestyles. This could be seen as the cause for disparity in the “cost of living” between different countries of different economic advance. Therefore, it should be recognised that the energy consumption is really in our high standard of living and is not inherent in any lack of efficiency in a production or manufacturing process itself. This is evident in the fact that the USA, with 5% of the Global population, consumes 25% of the world’s energy, including 40% of the world’s oil.
So the problem is that in an effort to strive for financial efficiency, most is to be gained by trimming back the lifestyle content of products. In an era where energy is constrained and expensive, one might decide instead to mail order a plain white shirt direct from a manufacturer. This both reduces the customer’s standard of living and contributes to a drop in demand for designer shirts sold trough retail outlets, threatening other livelihoods. Similar trends could be envisaged for just about every product and would eventually result in a recession. This development would be a serious threat to the affluence of the service based economies of the west. In effect, by striving for financial efficiency, an economic recession is created in the developed world, which is a difficult but effective way of cutting energy demand.
The aim of course should be to cut energy demand without a recession and its associated drop in standards of living. This requires a drive entirely for energy efficiency rather than considering the financial aspects. It becomes an entirely technological challenge that involves finding ways of doing all the desirable things we do now, but using far less energy.
In some respects, there are significant gains possible once a drive for energy efficiency kicks in. Deploying some basic known technologies in building design, managing waste, reduced packaging and revising the way we use cars, can quickly reduce domestic and commercial energy consumption without any significant effect on our livelihood.
However, when it comes to energy intensive activities such as mass transport, and processes from the preparation of food to large scale manufacturing, there will be fewer gains to be made. This is because the cost of energy set by OPEC is already significant in these energy intensive businesses, despite abundant oil. This has already caused significant technological drives towards energy efficiency that will be more difficult to build upon. So from a lifestyle perspective, it is likely that the lights will stay on, for example, as we can quickly invest in energy efficient bulbs that will use a fraction of the energy of the previous bulb. However, in order to travel to the other side of the planet just for fun, (given that you have some money left over from your ever rising food and electricity bill) may be much more difficult. In this case, the technology to make such recreational travel an affordable activity will probably require something like half a century of intensive investment in alternative means of transport. This is because aircraft today are already designed with fuel efficiency as an utmost priority.
The overall effect is that we are already considering efficiency in our most energy intensive activities and to continue them in a climate of depleting oil will require further huge technological advances. Therefore, it seems difficult to avoid some form of recession if energy becomes suddenly scarce. Long term however, the problem of maintaining affluence in a climate of depleting energy, is purely a technological problem.[/align]
2. Increased use of Sustainable Solar Energy Derivatives:[align=justify]The amount of power that streams continually from the sun to earth is immense. This energy is entirely renewable, effectively infinite in supply, provided we use it at no more than the rate it is arriving on earth. Primitive humans would have depended on the ecosystem to extract this energy but modern technology means we are no longer constrained by this. For example, one could envisage that we could clear all vegetation from the earth’s surface and replace them with solar cells and then use the energy to power atmosphere management machines, with the remainder powering our economy; not a planet anyone would ever want to create, but it does demonstrate how humanity has outgrown the ecosystem.
However, currently we do not have anything close to the capability to tap enough of this energy into useful forms in order to replace our current oil consumption. The technical challenges here revolve around designing, building and deploying huge amounts of technology to extract solar energy in forms such as:[/align]
• Direct Solar Energy:Solar cells, reflectors, etc, can soak up the sun’s heat and light energy directly, converting it to electricity for the grid or using the heat directly for local use. The primary drawback here is that solar energy in its raw form is of low “intensity”. i.e. at 100-200 W/m2, enough to power 2 or 3 light bulbs of the less efficient variety, a large area of sunlight must be absorbed in order to produce sufficient amounts of energy. As such, industrial deployment of solar energy is only realistic in desert areas of low land value.
• Wind Energy:The sun heats the atmosphere and drives significant air currents which are dependable sources of energy at many locations on earth. Wind is a more intense source of energy than direct solar at 400-600 W/m2 , enough to boil a litre of water in about 5 minutes, so less land need be used. However, wind turbines have met with opposition due to visual impact on the landscape and as a result have been driven offshore, where the cost of foundations make it more expensive (and energy intensive) to deploy.
• Wave Energy:The interaction between the wind and the sea surface causes the formation of ocean waves, which can contain very significant amounts of energy in certain locations. Ocean waves are a much more intense form of energy at 2000 – 3000 W/m2, enough to power a small domestic heater. Therefore, there is significant energy to be extracted. However, technology to extract a high proportion of this energy has proved difficult to develop and there are additional problems in building sufficiently robust structures for such a harsh environment. Similar to offshore wind, there is the added expense of providing infrastructure to get the energy ashore. The technology is thought to be 15-20 years behind the wind energy sector.
• Hydroelectric:The sun does a good job of evaporating and lifting enormous amounts of water into the atmosphere. When it rains on high land, its potential energy can be tapped by damming rivers and deploying a hydroelectric turbine to produce electricity for the grid. This is a very intense form of solar derived energy, which is already well developed as it can compete with conventional fuels. It is limited by the lack of suitable rivers and ecological consequences of damming them. Hydroelectric power is already by far the biggest renewable contributor to global energy at about 7% of total energy. (all renewables accounted for only 7.7% in 1998.)
• Biomass Energy:This involves returning to the dependable old ecosystem in fact, only not directly for food but for energy sources in general. It is possible to grow fast growing trees or oil producing crops in many environments, which can provide a significant, sustainable amount of combustible material. Rape seed oil can be burned in an internal combustion or turbine engine after some refining.
[align=justify]The disadvantage of much of these forms of energy are their undependable supply rates. Sunshine, wind and waves are all intermittent forms of energy. If their output is electricity, then there is the problem of powering the world on intermittently available electricity rather than the dependable turbine or internal combustion engine; a radical shift from the status quo. Some say that this points to the development of interconnected electricity grids to damp supply across continents. Others point to a Hydrogen economy, where the above forms of energy are partly used to create clean hydrogen as an energy storage fuel that will damp out the intermittent supply and provide a useful fuel that can be used for the transport industry. Known hydrogen fuel cell technology means cars and other ground transport should be able adapt to hydrogen fuel over say a 10 year period at best, although we may be a long way from aircraft that run on hydrogen, for example.
So the development of these renewable technologies certainly provide good hope for the future, with the significant added benefit that many can be operated with near zero contributions to the climate change issue which runs parallel to the energy shortage issue and must not be neglected, when considering alternative energy. Solar, wind and wave energy emit only the carbon associated with the energy forms used in their manufacture, deployment and maintenance. Some accuse Hydroelectric of emitting excessive Methane and Carbon associated with flooding land. Biomass energy is approximately carbon neutral in that the biomass absorbs the same amount of carbon as is emitted in their combustion.[/align]
3. Extended use of Non-Solar Energy types[align=justify]Instead of depending on the sun, why not build our own small sun here on earth? Nuclear fusion is the holy grail of the energy problem. It is not without its immense technical challenges, however. A significant amount of research is underway but even at this rate it is still not a matter of when, but if, the technology will ever be feasible. If it succeeds in producing affordable energy, it is likely that the energy question will be solved from that point on because it is a stable, clean and broadly risk free way to produce energy. The first fusion experimental reactor is being built in France by a coalition of international scientists. (
http://www.iter.org). However, it is highly unlikely that Nuclear fusion will be there in time to solve the current Energy problem and it would be reckless to depend on its success.
In the meantime, however, any oncoming energy crisis is likely to reopen serious debate about reversing the trend of closing down the world’s not so risk-free more conventional Nuclear fission reactors. Nuclear fission energy is expensive if the full life powerplant lifecycle is accounted for and any accident has well known serious consequences (Chernobyl, Three Mile Island), that have resulted in popular opinion being very much against this solution. As the public learns about any impending crisis, it remains to be seen if Nuclear power can be accepted as a necessary evil in order to supplement the declining oil supply. As it is a known technology, it might be a good bridging solution until better alternatives are developed that don’t carry the same risks. Ecologist and Greenpeace cofounder, Dr. Patrick Moore, has even become a Nuclear convert and a vocal campaigner for Nuclear Energy. It is, however, expensive because of the future decommissioning and waste management costs. Uranium is also a finite resource and may suffer the same fate as fossil fuels in the longer term.
Other forms of energy that are not derived directly from sunshine, include tidal energy. This is where gravitational forces from the orbiting moon and from the sun cause significant, dependable tidal currents in the earth’s oceans. These can be tapped using a variety of methods and technology is currently being developed in parallel to wave energy as another ocean energy solution.
Geothermal energy is part solar derived, part due to reactions in the earth’s subsurface. It involves either using the immense heat energy in areas where local tectonics make it possible, or simply using the temperature of the earth below the surface, where it is not affected by seasonal variation. The former is being used to create a pioneering hydrogen economy in Iceland. The latter is being employed in temperate climates in order to reduce the need for winter heating and summer air conditioning on the surface.
There is also the possibility of new unforeseen solutions being found and inventive minds must be focused on the issue.[/align]
So with all these solutions, why the big deal?[align=justify]In all likelihood, the solution is likely to incorporate all three of the above approaches. The key fact to note is that for all three, enormous leaps in technology are required to replace the amount of energy currently produced by oil. This is not the kind of technology that develops overnight. The challenge will be to mobilise humanity’s innovators to provide technical solutions in time to avert any tendency towards the Malthusian catastrophic scenario. It will also be much easier to develop such technology in advance of any serious energy shortages (many corporations respond to recession by cutting research budgets). In human history, such rapid technological leaps have only ever occurred during wartime (e.g. the Manhattan project, the Space Race, etc) and seem to be motivated by threats to the security of whole societies. This new threat to global society must therefore be recognised in time and a response of appropriate magnitude taken.
Currently, we are still (hopefully as you read this) in the era of abundant oil and as a result, none of the above technologies can provide energy or energy savings at a cost that can compete with the cheap oil available to the market. Therefore, they have received little attention and it remains t be seen if there will be enough time to catch up when the supply of oil does begin to fall short of demand, such that an orderly transformation to sustainable energy can be made.[/align]
Bridging Solutions[align=justify]Many believe that taking a direct step to sustainable energy is in fact an unrealistic giant leap that is impossible without hurting the global economy, particularly at a time when significant portions of the global population in China and India are moving towards prosperity based on the availability of energy. It is unlikely that these blossoming but fragile economies are going to be willing or able to absorb the cost burden of fuelling their success on radical and expensive sustainable forms of energy. It may be possible that systems based on variations of current energy technology can buy some time and wealth, which can provide further opportunities to research and develop truly sustainable solutions for the future. Such bridging solutions will also have to be significantly less carbon intensive than their predecessors in order to meet Kyoto targets to curb climate change. Bridging solutions could include the Nuclear solution previously mentioned as well as:[/align]
• Clean Coal Technology:[align=justify]Coal is a finite resource that was eclipsed by oil during the 20th Century. This is because oil is a far more attractive fuel to extract and transport as well as the fact that it produces less carbon dioxide. Therefore there remains significant coal resources in the ground that will certainly outlast Oil resources. Furthermore, Coal can be refined into liquid products suitable for the transport industry (at a cost). Coal, however, produces more carbon per kW of energy produced than any other forms of fossil fuels. With now almost incontrovertible evidence of Climate Change being linked to carbon dioxide emissions due to human activity, any expansion of the use of coal will have to be matched by a reduction in carbon emissions. There are exciting new technologies in Carbon Capture and Sequestration, where the carbon is collected at the energy conversion stage and pumped back into the ground, probably in redundant oil wells. Coal still proves to be a challenge for policy makers as sequestration technology is not proven and the extraction of coal in open cast mines is often very environmentally damaging in its own right.[/align]
• Liquified Natural Gas:[align=justify]LNG is already the bridging fuel of choice for some western European countries and possibly the USA. It releases less carbon than other fossil fuels and can be combusted in a combined cycle gas power plant, achieving up to 60% efficiency. However, the cost of putting in place an LNG infrastructure is proving enormous as most of the resource is a significant distance from the thirsty markets of the USA and Europe. It is also likely to be a short lived solution as the resource will not outlive oil for long and the price of gas seems for the moment to be linked to the price of oil. If oil production is constrained the pressures on the LNG infrastructure and the resource itself is likely to mean that it would not be long before the LNG option suffer the same fate as oil. Political considerations mean the security of supply of LNG is also very fragile.[/align]
• Biofuels:[align=justify]It seems reasonable that a biofuel industry could be developed quite quickly and could supplement declining petro-oil supplies. This would require an overhaul of agriculture policies, particularly in Europe and the USA. Some critics point out that a market for such biofuels can cause significant environmental harm when applied to regions of high growth rates such as Brazil and Malaysia where indigenous vegetation is cleared away for bio-crops. This cleared vegetation can release significant amounts of carbon and might dispel the idea that biofuel production is truly a carbon neutral way to produce energy. Furthermore, there is a considerable energy input to agriculture and many argue that the full energy return on energy investment for biofuel production is not fully understood. Ultimately, biofuel production will have to compete with food production for agricultural land and is not a solution in its own right.
Bridging solutions, combined with modernisation of ageing power plants in the developing economies and some energy conservation measures in the developed world, could allow global economic growth to continue for some time longer on more conventional forms of energy. However, even these bridging solutions involve not insignificant technological advances and enormous investments in infrastructure. The dividend of such investment is merely a delay of the inevitable: the requirement to find a truly sustainable solution. Throughout any bridging period, the focus must still be on the continual conversion to a truly sustainable energy system that can provide the required energy, perpetually and with a tolerable impact on the environment.[/align]
4. IMPLEMENTATIONAccepting the World Order:A: Nation states – co-operation and conflictThe problem is no longer that with every pair of hands that comes into the world there comes a hungry stomach. Rather it is that, attached to those hands are sharp elbows. ~Paul A. Samuelson, Newsweek, 12 June 1967[align=justify]National governments respond to their national population and generally stay in power by satisfying their electorate (democracy assumed). Unfortunately, in the current state of affairs, implementing any of the solutions above at a national level is not likely to make that nation wealthier, or improve the living standards of their electorate. On the contrary, by switching to sustainable energy, the cost of energy will increase and make the country less competitive in the global economic arena.
There is also the difficulty of gaining public support for things such as nuclear power plants or wind farms, the construction of which can prove to be a thankless task. In fact, many nations are under pressure from their electorate to close nuclear power plants, compounding the present problem. There is the option of gaining an international consensus where all nations agree for the greater good to be bound by a set of rules. However, the failure to gain total international ratification of the recent Kyoto protocol demonstrates how difficult this can be. To get powerful, oil dependent nations to agree to a drop in oil supply and a switch to expensive power generation, seems an impossible task.
Also, nation states cannot be depended upon to behave responsibly to energy problems like those posed by peak oil theory. Nations can respond in one of two ways:
(a) Attempt to continue to secure conventional energy resources for themselves through coercion, be it diplomatic or through use of force. This may involve nations defending their own resources or going on the offensive to ensure supply to their own country.
(b) Attempt to supply the energy gap by implementing a combination of the three approaches previously mentioned.
a) is clearly a painful decision to make and will result in an unstable political environment in which it will be very difficult to make advances towards a sustainable solution. b) will leave an extremely large energy gap to fill if the nations pursuing policy (a) have hijacked the oil supply for themselves. It is not difficult to foresee the potential emergence of significant open conflict and the proliferation of terror tactics from nations without a military machine. Clearly these policies are damaging to world stability and any real progress for mankind. [/align]
B: Global Bodies[align=justify]The need for “international” politics to govern and respond to global problems points to the lack of a suitably powerful global body to respond to global problems. The UN, World Bank and WTO all lack global democratic credibility or any military backup and seem to end up leaning back on powerful nations to implement their will, a fact that has resulted in accusations that it is still certain powerful nations dictating global policies and not a global body. The lead up to the recent invasion of Iraq seems a glaring example. Many have advocated the development of democratically elected global bodies such as a World Parliament as a solution to global problems like poverty, global injustice and environmental control (ref “The Age of Consent”, George Monbiot). Such a body, if sufficiently powerful, might well be in a good position to tackle the issue of global energy supply.
However, the emergence of such a body seems to depend on some kind of global popular uprising that would be damaging in its own right. Also, its development would have to be parallel to some global military machine to enforce the global democratic will. That military machine would have to be significantly more powerful than any rogue nation state that may chose to ignore the global parliament’s democratic will. Therefore, such a global power seems highly unlikely to develop in advance of any impending crisis this century. (although it does not seem unrealistic that such an organisation might develop more peacefully post energy crisis, when the need for such a powerful organisation may become more obvious, analogous to the UN and EU forming after the lessons of the second world war). In short, it seems unrealistic to depend on the formation of any sufficiently powerful and democratic global power to lead the response.[/align]
C: The Free-Market Global Power Order[align=justify]Capitalism and Free-Market forces have emerged to be victorious in the ideological conflicts of the 20th Century. The process of liberal market “globalisation” is well underway and is distrusted by many as market powers appear to be eroding the traditional powers of democratically elected governments of nation states. Market forces are in effect filling the power vacuum that exists at a global scale. However, love it or detest it, it is possible that global free market forces may have exerted themselves just in time to provide a sufficient global decision making power to drive a response to the emerging Energy Challenge. It is highly unlikely that a better global decision making mechanism is going to emerge any time soon. Therefore, although it might not conform to the democratic ideal with which we are comfortable, we must work with it. In fact, it is not impossible to envisage that market forces are the only decision making force of sufficient global reach to direct a meaningful response.[/align]
Accepting the Problem[align=justify]If we accept that Free Market forces are the only global forces strong enough to respond to the Energy issue, then it is those with money to invest that have the power to focus all of humanity’s efforts on combating this problem. In turn, these people must learn to accept any approaching threats to energy supply. [/align]
So the rest of us just sit back and enjoy the ride?[align=justify]No. In the quest to make money, risk taking is a part of the investors’ daily bread. In the quest to secure the future for humanity, risk taking is the ranting of a madman. The Free Market needs to be guided and fed information so that it is not “speculating” on the future of oil supply, but instead “speculating” on the best alternative sustainable energy supply to replace a known shortfall in future oil supply. So some more charitable organisations will have to research and gather information and eliminate some of the uncertainty in the future of energy supply, thus guiding investors.
The problem with simply allowing the free market to control this issue is that, as long as the cost of conventional energy is cheap, there is no incentive to even begin to look elsewhere. There is simply not a sufficient market for expensive energy. Currently, the response to rising oil prices is to respond as though price changes represent “volatility” and point to surmountable supply problems due to, for example, the current political situation, refinery capacity, etc. These are perfectly valid contributors to supply shortages.
The response of national governments is then to lobby OPEC to open the tap a bit more or perhaps for oil companies to invest in technology that can increase the refinement or supply of oil outside OPEC. This means increasing oil exploration, improving technology for extracting oil in difficult to reach places, building more refineries, etc. This certainly works well at combating “volatility” in the era of abundant oil. However, it needs to be impressed upon the investment community that this strategy will inevitably fail with the onset of oil resource constraints. It must be recognised that the resource is finite and a technical barrier will be hit sooner or later.
The real danger is that investors choose to respond in this same way when peak oil begins to take effect. The initial symptoms might not look any different to volatility and irreversibly increasing price trends might not be noticed at first. In responding to the real problem of resource constrained supply, these misguided reactions could be dangerous because they serve to delay the necessary onset of peak production and high oil prices by investing unwisely in ever more expensive technology to extract hard to reach oil, keeping energy prices in check temporarily. This process therefore delays the attractiveness of investments in alternative, sustainable solutions.
It is also suspected that delaying the onset of peak oil in this way may also have detrimental effects on the nature of the “peak” because, by deploying ever more advanced oil extraction technology, it is possible to keep production elevated for longer. This causes the peak effect to be even more dramatic with production declining ever more steeply when it does eventually take hold. I.e. the overall effect of investing in this way ensures that the world will slide into the depletion era completely unprepared and that the available time to provide sustainable solutions will be ever shorter. It’s like driving down a road in bad visibility and after 10 miles you start to become complacent, assuming that, because the last 10 miles of road were straight, so will be the next 10 and you just hit the gas and speed up assuming it will work itself out as it always has. Of course when the bend does emerge from the mist, you are in a very bad position to take evasive action.
Visibility is a good analogy because it is generally accepted that the information and data available is very questionable indeed and that investors rarely look at a sufficient time horizon to capture the effects of peak oil properly. This doesn’t concern the investors as such because they are simply basing their speculations on the data available and profiting / losing accordingly. It is therefore not good enough to assume that the market will drive the response by itself. It is those with a mandate to protect and lead society, our elected leaders, who must bring the issue forward and provide the necessary visibility on the future of energy. Only this will lead the market to execute decisions on a sound basis.[/align]
Guiding the Market[align=justify]International co-operation in compiling data and understanding the future of the oil resource followed by dissemination of the findings to the media and the investment community at large is the first step in combating this issue. This could be lead by the UN or IEA for example. Technical specialists, geologists, oil producers and anyone who can help understand how the issue might unfold and who does not have a vested interest, must be commissioned to shed light on the problem. This process is already underway with the initiative being taken by a small group of people, some of which are listed below. It seems the world may slowly be taking notice, but as yet the issue is “below the radar screen” as far as the public are concerned.
There is plenty money to be made during such an energy revolution and plenty money to be lost in not accepting the fact that it is coming. Once the debate is started and if information starts flowing that confirms the suspicions of many, it is then the investors’ responsibility to accept that these changes are on our doorstep and invest accordingly. From there, it must be hoped that the investor’s toolbox has sufficient foresight to get investors to redirect money towards the solutions outlined above.[/align]
Can I, as a consumer contribute to the solution?[align=justify]The nature of peak oil points to a paradox: Is it better for consumers with money to spend, to be as energy inefficient as they can afford (financially) to be in the era of abundant oil?
Ignoring the impact on climate change, one can argue that this is the case. This is because inefficiency will raise the demand line and bring forward the peak oil effect. Once energy constraint does kick in, it will be easier to roll out existing technology to reduce demand as energy prices are forced to increase, without upsetting your lifestyle too much. However, would this “existing technology” exist if it was not attractive to consumers. Why would highly efficient hybrid cars or energy efficient light bulbs ever have been developed at all, if there was no market? The answer is that there is a market because, by buying an efficient car, the consumer can save money that can be spent elsewhere to improve their standard of living. So, if you are a moral person who might decide, for example, to buy a small and efficient family car, in order to conserve the earth’s energy resources, you must be very careful what you decide to do with the money you save as a result. If you spend it on other consumable goods, you are simply transferring the same energy consumption to someone else. In this way, such consumers should recognise that they are being helpful in providing a market for efficient technology, but they are probably not reducing global energy consumption.[/align]
“For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled. “ ~Richard P. Feynman[align=justify]If you want to be an effective conscientious consumer, you must either accept a lower standard of living or ensure that you invest any savings as a result of energy conservation. Examples might be: [/align]
- Choosing to purchase more expensive electricity from a provider that uses only renewable forms of energy.
- Purchasing an energy efficient product that will cost you more over its lifetime than a less efficient version.
- Purchase an energy efficient product and invest the savings in an energy-producing technology company. (with the advantage that you might profit, which of course you must reinvest if you want to keep energy consumption down)
- Offer to take a salary cut in exchange for shorter working hours and attempt to use efficiency to maintain your standard of living.
[align=justify]In this way consumers can be effective in helping to develop the required technology AND cut the global energy demand. However, such conscientious consumers are unlikely to see any benefit over their fellow customers that choose to purchase cheaper inefficient products. If energy gets expensive and the less conscientious consumer can’t afford to run their 4 litre V6 SUV, they can easily switch to a more efficient car because the technology exists. For example, American cars currently consume on average 32% more fuel than European vehicles. However, if the cost of fuel becomes prohibitive for American motorists, they can quickly turn to efficient cars using technology developed for the European market. European motorists may not have anywhere to turn.
There is an alternative, simpler option for consumers. Consumers can discriminate based on the product provider. For example, a certain oil company may decide to start investing a large proportion of its profits in alternative energy technology while others reinvest it in continued oil extraction technology. The consumer may decide only to purchase oil from the former company and thereby helping to influence the policy of powerful investors.[/align]
5. CONCLUSION[align=justify]It is dangerous and nearly impossible to predict the details of how such a complex issue may unfold. However, the aim here is to attempt to demonstrate that there are positive opportunities to be drawn from tackling a global energy shortfall. It may in fact be a global blessing in disguise that, if solved effectively, could be the best way to tackle far reaching global issues, from climate change, to poverty, to war and to terrorism. Could a war for sustainable energy be the war to end all wars?[/align]
“I have no doubt that we will be successful in harnessing the sun's energy.... If sunbeams were weapons of war, we would have had solar energy centuries ago.” ~Sir George Porter, quoted in The Observer, 26 August 1973A Hypothetical Timeline:[align=justify]In conclusion, a hypothetical energy shortage scenario is described here. It is an entirely speculative, but hopefully not unrealistic sequence of events, which could lead to a reasonably successful response to an energy shortage and the emergence of a better world for all. A reasonably severe energy shortage is chosen in order to show that perhaps even this could be overcome. Timescales are included but are speculative as they cannot be gauged until the details of any potential energy shortage are known.[/align]
[align=justify]In 2006, amid a climate of volatile and high oil prices, lobbyists gain more attention and with financial support from certain governments, Nuclear Fuel bodies and Renewable Energy Companies, succeed in driving an initiative for Oil Companies and OPEC nations to release reliable data on oil well production and the size and nature of proven reserves. From the data a picture of future global oil capacity emerges. Oil production is unlikely to increase after 2010, with serious shortfalls predicted in total energy supply from 2013. At current demand rates, it is estimated that oil prices of $200 a barrel would be required to cut demand to required levels by 2013.
The findings prove to be a shock to the market and send investors scurrying to purchase oil futures that drives the oil price to unforeseen heights.
The result sends shares in airlines, car & aircraft manufacturers spiralling downwards while shares in oil companies with reserves soar due to the value added to their oil.
In the following year, effected companies begin cutbacks, unemployment grows and recession begins to take hold as consumer confidence drops. Oil demand begins to drop towards production levels and the oil price stabilises but at such a high level, the future is uncertain.
Oil and Gas dependant electricity markets see quadrupling of the price of a unit of electricity. Governments start to develop strategies on how to secure their energy supplies and drop the price of energy to maintain a competitive business environment.
Oil companies and OPEC countries develop strategies on how best to supply the market to serve their own profits. Conflict of interest between OPEC countries causes a breakdown in the organisation. Fresh rigorous rounds of international diplomacy follow, as oil consuming nations attempt to bargain for oil supply agreements with previous OPEC countries.
The turbulence in the stock market causes investors to turn their attention to alternative energy providers. Shares in established wind, solar and nuclear energy providers soar. Venture capitalists start pumping money into fledgling alternative energy companies.
In a bid to survive, previous engineering firms in the energy, aerospace and automotive industries begin to place aggressive take-over bids and purchase product development rights for alternative energy solutions.
All car manufacturers are releasing hybrid cars at competitive rates. The first line of commercial hydrogen fuel cell cars is released but is unsuccessful due to a lack of hydrogen infrastructure and rising price tags due to inflation.
Air travel and tourism industries are halved adding to the ongoing recession and unemployment rates. Domestic tourism improves.
Planning legislation is bypassed and a number of new wind farms and nuclear power plants are commissioned. In the US desert, solar farms are deployed at an increasing rate.
By 2008, full scale ocean energy prototypes (both wave and tidal) are in the water, some function, some don’t and large ex-aerospace corporations buy the technology accordingly and see some recovery on the horizon.
All western agriculture is revived in a bid to provide bio fuels. European agricultural policy is rapidly overhauled towards the provision of energy crops. Europe begins to look yellow from the air.
The global balance of power begins to shift in favour of countries with previously electrified public transport systems and ready access to nuclear and renewable energy resources. Manufacturing industries begin the process of relocating to these countries to continue business. Other countries, struggle to provide a low cost production environment.
Oil prices drop as supply increases and improved technology leads to an increase in output. Demand drops significantly due to the opening of Coal fired power plants (significantly in China)
By 2016, following a long global recession, the drive for efficiency, the increased use of coal, nuclear and renewable alternatives along with new oil extraction technologies, oil supply meets demand for the first time and prices drop. Economies still contract as the future oil production forecasts show a reducing trend. Investors see a great future in renewable energy and invest continually in the industry in the hope of getting a return.
As oil prices stabilise, the deployment on a large scale of renewable energy devices and nuclear energy becomes possible. In 2014, for the first time some countries see economic growth as the energy supply from alternative sources exceeds that lost from a shortage in oil supply.
The UN lobbies coal burning nations to switch to the latest renewable technologies or employ carbon sequestration technology in order to control environmental effects from C02. Sanctions are imposed on some nations. The UN gains significant power during this period and is overhauled to deal with its new role.
Air travel remains the preserve of business travel and is extremely expensive. Most international business meetings take place over the internet. However, investment in radical new air travel holds hope for future mobility.
The Global Economy stabilises, food prices drop and an electric / hydrogen fuelled transport industry starts to evolve.
Carbon Dioxide Emissions drop 50% in 5 years up to 2020.
Population growth is stunted dramatically between 2005 and 2020 with the third world bearing the brunt of the hardship.
Developing countries that were affected by famine start to receive aid in the form of energy projects as well as direct food aid managed by the UN.
By 2025 the world returns to stability and modest economic growth rates based on an increasingly sustainable energy supply. Economic confidence is restored, unemployment rates return to acceptable levels and Humanity continues its endeavour despite the interruption.
The UN is renamed the Global Union and includes elected representatives from the global population and a collaborative army under the sole authority of the GU.. Nation states start to yield certain powers to the GU.
The gap between rich and poor narrows globally, as developing countries stabilise and see huge economic advance fuelled by energy projects and security enforcement from the GU. [/align][align=justify]In the longer term it seems plausible that an energy shortage may be what is required in order to put the globe on a sustainable and prosperous path. Responding to the challenge may have many positive impacts and work towards a global solidarity and new forms of world governance. However, the chances of a positive outcome would be greatly increased by acting sooner and not later. More awareness of the subject and how it relates to overall Global sustainability needs to be raised immediately worldwide.
Society has grown complacent with the current level of global affluence, including its unjust distribution. To assume that it is stable and sustainable is a dangerous form of apathy.[/align]
by jaws » Wed 31 Aug 2005, 17:27:02 
