Energy Transition
Summary of article from Steve Connor, Science Editor of The Independent August 3, 2009
Warning: Oil Supplies Are Running Out Fast.
The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production. This is the warning of Dr Fatih Birol, chief economist at the International Energy Agency (IEA) in Paris, an agency that is charged with the task of assessing future energy supplies by OECD countries. Oil is running out faster than expected, he reports, perhaps 10 years earlier than other estimates. Many governments have assumed that peak oil would not occur until after 2030, but the International Energy Agency believes it is most likely to occur by 2020 and possibly even earlier.
According to the results of IEA's recent evaluation of over 800 oil fields, representing 75% of the world's reserves, most have already peaked and their production is declining at twice the rate determined 2 years ago. The IEA estimates that production from existing fields is declining by 6.7% instead of the 3.7% they had estimated in 2007. Combine this with the lack of exploration for new oil and the stage is set for a catastrophic oil crunch within the next 5 years as demand exceeds the supply.
Dr Birol warns that we need to prepare ourselves for the day the oil runs out. Crude oil is a critical component of our economy. It is a source of energy or feedstock for our transportation systems, agriculture and food production, and chemical and manufacturing industries. It is a strategic asset for military activity. We should expect oil prices to be much higher than they are now, potentially strangling economic recovery.
But environmentalists fear that the decline in cheap oil may encourage production of environmentally damaging tar sands in Alberta, Canada or the extraction of oil from coal. What we need to do instead, according to Jeremy Leggett, a former oil-industry consultant and now a green entrepreneur with Solar Century, is to promote renewable energy and energy efficiency. "We have to do this for global warming reasons anyway, but the imminent energy crisis redoubles the imperative," he said.
Virtually everyone agrees that the extraction, distribution, and burning of fossil fuels contribute significantly to many of the planet's environmental problems. This knowledge hasn't yet stopped the ever-increasing consumption of oil and gas by an ever-increasing world population. There are almost six billion people on Earth now, nearly double since 1960, and sometime in the next century there will be about 12 billion. According to Jennifer D. Mitchell in World Watch magazine, "We don't have anything like a century to prevent that next doubling; we probably have less than a decade."
The fundamental problem is the world's population growth. Right now, there are about 98 people for every square mile of the Earth. That amount is increasing rapidly; every second there are 2 more people on the Earth; every hour 9,000 more; every month adds 6 million more. In other words, this rate of growth is like adding another Mexico to the world each year and another China every decade. In a modern-day century, from 1950 to 2050, the world's population is estimated to grow from 2.5 billion to 9.3 billion an increase of almost 3 times. Currently, the planet's human population is doubling about every 39 years. By 2050, the U.S. population alone will have increased the equivalent of adding four more states the size of California . It took 10,000 generations to reach a world population of 2 billion in 1930, while it will only take us a decade in the 1990s to produce around 1.5 billion more! Not to mention all the environmental and humanitarian losses this overpopulation problem is causing.
With more and more developing countries wanting to offer their growing populations the opportunity to consume fossil fuel products such as gasoline and electricity, it is obvious that the global oil supply will not sustain an overpopulated planet. But the United States and Europe have been consuming a disproportionate amount of energy for 150 years, and it is unreasonable for the industrialized West to expect developing economies, such as the Asian Pacific, to forego the power and wealth that burning fossil fuel brings to industry and commerce. Indeed, U.S. economists are counting on services and products sold to these emerging markets to fuel the growing U.S. economy.
In the near future the world's economic dependence on petroleum production will continue to grow because we have implemented few energy alternatives. But there is only so much oil in the ground, and it won't last forever. It is likely that as non-OPEC production begins to diminish and Middle East OPEC producers corner the petroleum market in the next decade, barrel prices will rise significantly. In fact, on March 23, 1999, OPEC members agreed to cut crude oil production by 2.1 million barrels a day and hope to maintain these lower levels for a full year starting April 1, 1999. This group of 11 oil-producing nations approved the cuts in an effort to strengthen prices and end a global oil glut. Crude prices responded by jumping almost $3 a barrel, and gasoline prices followed suit. Even if the U.S. sends in the marines to take over the Persian Gulf wells, oil companies will still keep raising the price as the precious reserves are slowly pumped out.
Either way, oil will be getting more expensive in the future. As the price of oil increases, the first to suffer will be the world's poorer nations. When oil becomes too costly, their oil-based energy consumption will falter. A graphic example of this scenario occurred recently just 90 miles from Miami , Florida . It started with the collapse of Communism, when Russia was forced to cut off cheap oil imports to Cuba . An observer in 1993 wrote: " Cuba has become an undeveloped country. Bicycles are replacing automobiles. Horse-drawn carts are replacing delivery trucks. Oxen are replacing tractors. Factories are shut down and urban industrial workers re-settled in rural areas to engage in labor-intensive agriculture. Food consumption is shifting from meat and processed products to potatoes, bananas and other staples."
Life will become more difficult in the industrialized West too. Besides the increasing immigration pressure from suffering Third World populations, Europe and especially the U.S. will be scurrying to find alternative and renewable sources of energy. In their book, Our Ecological Footprint: Reducing Human Impact on the Earth , authors Mathis Wackernagel and William Rees state, "With access to global resources, urban populations everywhere are seemingly immune to the consequences of locally unsustainable land and resource management practices at least for a few decades. In effect, modernization alienates us spatially and psychologically from the land. The citizens of the industrial world suffer from collective ecological blindness that reduces their collective sense of 'connectedness' to the ecosystems that sustain them."
Under tremendous and increasing pressure politicians will have to address the fossil fuel and pollution crisis. Difficult questions will have to be answered. Key among them are: What alternative energy sources exist to replace our present great dependency on petroleum? New technologies will need about 50 years to replace existing sources in terms of convenience of use. Can they be obtained in significant quantity and how widespread around the world are they? What are their environmental impacts? It would be ideal if politicians began dealing with these problems now, but in democratic societies, political representatives are elected for short terms. Most politicians succeed by delivering short-term benefits and have little motivation to adopt costly, sustainable, long-term energy policies with the aim of preparing for the inevitable energy crisis. The Alliance to Save Energy believes that with just a few adjustments, society will make the jump from unlimited oil consumption to sustainable economies based on improved energy efficiency. But greater energy efficiency, fuel saving technologies and the installation of minor adjustments in our daily lifestyles will not solve the coming oil crunch.
Renewable green energy sources can help reduce pollution and dependence on petroleum products. A September 1998 public opinion survey revealed that three-quarters of Americans favor increasing federal government purchases of renewable energy such as solar and wind to help reduce pollution and save money. Wind and solar energy do not create dangerous waste products and are indigenous, secure and freely available. The American Solar Energy Society (ASES) recently called on Congress and the President to increase federal purchases of renewable energy. The federal government spends $8 billion per year for all of its energy needs, including $3.5 billion for electricity. Unfortunately, existing regulations often prevent the federal government from buying renewable energy. ASES wants Congress to give federal agencies authority to purchase green power and renewable energy technologies and to provide adequate funding to agencies to pay the higher up-front costs. Many believe that the problem is more political than technological and that the next presidential election will offer opportunity to make some changes.
Grass roots efforts among green consumers have already begun to carve inroads into the American economy. About 25 percent of the adult population are starting to integrate environmental and social values into purchasing and investing decisions. According to Cliff Feigenbaum, publisher of the Greenmoney Journal, on Wall Street one dollar out of every ten invested now passes through some sort of social screen. The Institute for Noetic Sciences reports that given equal price and quality, 76 percent of consumers would switch to a company with socially or environmentally responsible products and services.
Regardless of whether the process will be easy or extremely difficult, sooner or later we are all going to have to face some major changes to our current way of life. It is not that we lack the knowledge of how to adopt sustainable measures. We are simply resisting such constraints, as many would call them, which might threaten the luxuries in life that we have grown so accustomed to. The point is that we now know the Western fossil-fuel-based model is sustainable neither for the West nor for the rest of the world. The challenge is to help developing countries leapfrog to a more decentralized, efficient, renewables-based system. The alternative to this is following the coal or oil-based path; suffering from price volatility, import dependence, mounting pollution and health problems, and expensive retrofits. Ultimately, the question is not when will the global economy switch from burning environment-damaging and limited petroleum products to using more earth-friendly alternative energies, but how will industry and humanity handle the transition.