World Energy — Where Are We Going?

World Energy — Where Are We Going?

I think we’re all a bit curious about the ultimate disposition of the energy industry – both here in the US and around the globe.  In the States, 49% of our electricity comes from coal, and the penetration of renewables is under 2%.  Worldwide, about 80% of energy for all purposes comes from burning hydrocarbons.  So if that’s where we are, where are we going?

In the US, we have a complicated array of vectors in this space. We have constantly falling prices for PV and wind — and promising new technologies coming along right behind them, yet we have a Republican majority in the Senate that has aggressively begun to block all actions that would mitigate global climate change.

So, again, what are the most likely scenarios for change, if any, through the coming decades?  I was lucky enough to have received a crystal ball for Christmas that comes in handy on occasions like this; let me pull it out, and I’ll tell you.  But first, maybe we should look at a few high-level questions that frame the discussion:

From the standpoint of pure engineering, how much longer will fossil fuels last? It’s clear that unconventional technologies (e.g., shale oil, tar sands, fracking, etc.) will become increasingly important. But will there be a natural limit to the success of these technologies – especially in light of the fact that they too come along with their own environmental consequences?  I’ve listened to the reassurances of the oil industry spokespeople — and even they don’t claim the supply will last forever.

On the legal and political front, will society continue to allow the energy industry to pass along the costs of the externalities to its customers now and in future generations?  There are many scenarios that could play out here.  I know people who predict that, in the long-term, we’ll relive the experience we had with the tobacco industry: a century of business as usual, followed by a few “smoking gun” pieces of evidence (pardon the pun), followed by decades of lawsuits.  Under this vision of the future, we’ll come to terms (albeit too late) with the damage to human health and ecosystems that oil, gas and coal have had — both issues that they openly acknowledged at the time, and those they successfully covered up.  Everyone will suffer but the lawyers, who will enjoy another enormous payday.  Interesting to be sure — but will history prove this right or wrong?

We all assume that the fossil fuel industry will not simply dry up and blow away; in tens of thousands of years of modern human history, there is not a single precedent for big money willingly conceding its power. But what exactly will happen when solar and wind reach and pass “grid parity” in a few years, meaning that the incremental cost of a megawatt of solar electricity costs less than the equivalent from coal? Won’t that change the decision-making process?  I want to take lessons in salesmanship from the guy who can get a utility to buy another coal-fired power plant when that decision both damages the world and costs more.

Will the public sector in the US continue to have essentially zero forward thrust behind renewables? Right now, despite the rhetoric, our government’s position in granting subsidies to create artificially inexpensive oil constitutes an all-out attack on clean energy. Will some to-be-named phenomenon cause voters to wake up and make a course correction?

Will there be world events (famines, storms, desertification, extinctions, island submersions, seismic changes in temperature) that will shock the world and convince even the global warming deniers about the nature of the crisis confronting our civilization?

Who will be the big financial winners ultimately? I’ve often written that the world is most definitely going in the direction of renewable energy, despite the catfights of the early 21st Century. As I mentioned, even the oil people have a tough time speculating that we’ll be extracting, refining and burning crude in 100 years — especially that world energy consumption will have grown many times past where it is today. At that time, we will have further developed several ways to harness the small percentage of the sun’s energy (currently 1/6000th) that we need to provide clean energy to everyone on Earth. But who will have done this – and made a fortune in the process?

OK — enough questions.  Now for some answers.

Hold on just a second, folks, sorry for the delay.  Damn!  What did I do with that crystal ball?  I know I had it here someplace…

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24 comments on “World Energy — Where Are We Going?
  1. Ronald Cochran says:

    You state ” I want to take lessons in salesmanship from the guy who can get a utility to buy another coal-fired power plant when that decision both damages the world and costs more”

    But that question is too simple. Even when costs per MwH for renewables drops below that of a coal fired power plant, there are other considerations that may well make the coal fired plant appear to be the better business choice. For example, it would take thousands of acres of PV panels to replace the power that on coal-fired power plant produces on less than 200 acres. Those thousands of acres represent potentially huge land costs and maintenance requirements for the power industry. I don’t expect electricity from renewables to become a major player anytime in the next several dacades.

  2. James Gover says:

    The only way I can imagine that the movement to alternative fuels can accelerate relative to the lengthy litigation process that evolved for tobacco is through public education. This role cannot be filled by government because government is subject to the pressures of the politics of the day and energy has become more of a political issue than a technical issue. Instead of focusing their resources on gathering the truth regarding the costs and benefits of all types of energy for public dissemination, US professional societies have opted to spend their resources offering unsolicited advice to Congress seemingly not recognizing that Congress responds to public opinion. Like others, I am not optimistic about the adoption of alternative fuels short of a major litigation movement or rapid escalation in oil prices.

  3. Great post, Craig.
    I like the way you ended it. It begs questioning the need for making fortunes in the first place. Making fortunes is the ultimate ego mandate of life. An illusion, to be sure, but seen as ultimate by so many. We are given all we need for happiness in life, yet taking more from the world is seen as a superior accomplishment to be worshippedaWe may yet be accorded the view that this is a human generated illusion, most likely made to stimulate economic contest for the locality initially, and then the world. Ego mind catchments are absolutely and universally capturing to minds that believe they are separate and that their interests are wholly different and in need of protection and defense. This is the belief system of separation that has motivated the world into conflict and war and death throughout time and so called civilization. Yet, here we are, fighting for what can be converted into scraps of paper and metal discs we call wealth. All justified by what it converts into by some erstwhile scheme of diferentiated success. How small the separate mind is, how vulnerable, fearful, and petty.
    Only by letting go of these false beliefs will the world be healed. Only by recognizing that healing is needed at all will any real change be accomplished.
    Illusions will be proffered and supported as long as they can gain traction in the world. And as long as the majority votes as they think the world should be, so it is. The belief in war and conflict is private and falsely composed, being based on false perceptions, because too many people have chosen loss as their viewpoint. We have little to no view of out true capability as mind. We have negated vision for the bodies sight. And we are given the rewards of that thought system. It is really that simple, and will change as we learn to see differently, not before.

    • Marc Vendetti says:

      Ultimately, we will all learn our lessons (many times at the school of hard knocks) and the wisdom you extol will become universally accepted once again. It’s hard to watch people swiming upstream, but we can do our part to advocate for right living and hasten the evolution of conciousness in the midst of it all. Stay positive and enjoy the Divine lila as it unfolds.

  4. Daniel Vasquez says:

    I agree with Mssrs. Gover and Cochran. The real issue is about energy density. I heard an interview with a gentleman, whose name escapes me, on the web cast Financial News Hour last year who did a study on energy density. What he did was to look at all the major ways of producing energy. He converted the annual energy output to horsepower for simplicity sake. He then took the amount of land that the various energy production methods occupied and converted that to acres for simplicity sake. Lastly, he divided annual energy output (hp) by land area (acres) to get a density measure, hp/acre. Nuclear energy easily topped the list at 288 hp/acre followed by natural gas at about 180 hp/acre. Oil was third at about 150 hp/acre. Wind power was about 6 hp/acre and solar was about 1/4 hp/acre. Nuclear is the obvious way to go for electric power generation, especially with the research being done on Pebble Bed nuclear reactors and also mini-nuclear power reactors.

    Then there’s the transportation liquid fuel issue, which will be with us for decades. Converting cars to electric plug-ins will also take decades, which will obviously require more electric power generation. As an energy investor, I believe that the best investments in my lifetime, I’m 62, will be in oil/nat gas and nuclear and I’ve positioned myself accordingly.

  5. Ali Ghorbani says:

    $$$ – Let’s face it, we are human, we are greedy and we are short sighted. We want it now, we want it reliable and we want it cheap. Oil companies figured this out and play that card all the time by checking the pulse of the consumers and adjust accordingly. There is big money in the oil industry and they use it to buy any politician they need to get taxpayer subsidies, to use public land and to control media. We go to war for them in the name of national security and patriotism. This sounds cynical, but I think it is the reality.
    Even the most environmentally conscious consumer wants to have a fairly cost effective solution and make their money go as far as they can make it go, so the very first question they ask “Is it cost effective”? the second question usually is “ How long will it take for my investment to pay back”?, there are more questions, but these two hit to the core of the issue, Cost Effective Solutions.
    Education is essential and very important, but it can’t overcome the cost effectiveness. We need as much government subsidies as we can get until we have the technology that can produce lower cost components and the installation becomes less costly and more regulated (this is essential to gain public trust).
    Let’s figure out how we can get to more politicians who can help to keep government subsidies alive as long as we need them while the rest of us focus on making the technology more cost effective and user friendly.

  6. Jean McAlister says:

    There are four things that will drive the United States toward using more renewable energies and less fosil fuels. First and foremost is foreign competition. Which country wants to say that “most of their energy comes from renewable energy sources?” Which country will ultimately have the biggest solar or wind farms. Who will lead the way.
    Second, is policy. Without government policy on a federal, state and even regional level, this sector will not survive.
    Third, is funding. Without commerical and residential incentives to convert to renewables then the transition away from fossil fuels will have a slow death.
    Fourth, is pressure from the consumer. Without the consumer, there is no transition away from fossil fuels. So, pick your leadership carefully in government, follow the money and demand energy effecient cars, homes, commerical buisnesses. Consumers must spend money on renewables to move our nation to compete with other nations and at the same time reduce our carbon footprint.

  7. Dennis Miles says:

    Well Craig,
    Misplaced that Crystal Ball already? I was hoping for a few answers but we will simply have to solve our own problems. Because this is not “Star Trek” or another Science Fiction idealised society we will continue to have the same dificulties with our lives for the forseeable Future. The society in the last 5000 years has worked itself into a giant pyrimid with the broad base of workers who farm and labor and actually produce products from raw materials or extract the raw materials from their source, or service or repair or install the products these are the base of the pyrimid. above them are all the foremen, managers, investors, politicians, leaders, Bankers, money-changers, and lawyers; who produce only opinions and consume far more than the farmers and laborers.

    That is why I hate Public Utilities who would invest in large land areas of solar collectors and not even run sheep under them to eat the weeds, no, they poison the soil to kill any weeds. then they sell the collected sun’s energy to me with extra charges to pay personell and supervisors to do the billing. The sun’s energy is free but the collectors are so expensive that buying from the electric utility seems cheaper. And the collectors, they are less than 25% efficient, WHY? because that way we buy many more of them at greater profit by the manufacturers. An alternative is needed, some simpler to build system like my “Power Wheel” using a simple metal solar collector to provide the heat to run a “Heat Engine” directly and use the mechanical torque cerated to spin a generator and charge cheep long lasting (even if they have to be big) batteries. Look at your Schedule, One can rise at dawn and have supper at sunset then retire a couple hours laiter and except for refrigeration to preserve the food, most electric loads can be minimised while we sleep so 80% of electric consumption is daylight oriented.

    I think after all this ranting my key statement is that we should collect solar energy for ourselves not pay a utility to do it for us. And Solar can be more reasonable to use if we stop using NASA technology and use simpler less expensive alternatives to collect and use it and stop treating it like oil, gas, or coal. it is pure heat use that in simple heat engines. With some funding I could build a solar collector, heat engine, generator and batteries, and Inverter and plug my house into it and “DUMP the GRID.” And it can all fit in a structure the size of a garage.

  8. Dennis Miles says:

    I just had to add one more short comment. There are millions of houses sitting in the sun with their pretty shingle roofs adding to the “curb Appeal” but I thing a simple flat panel of solar collectors covering the entire roof area and sloping south for good efficiency even if that means one higher corner and one lower corner might destroy that “Cub Picture” for the Architect. But if it means no electric bills every month then GO FOR IT !

  9. Dennis Miles says:

    DUH, not a “Cub Picture ” its a “Curb Picture” from the concept that looking Pretty is important I say BUNK sell me a CUBE with a “Shed Roof” like an overgrown tool storage shed and if it has no need for any connection to the Electric Utility Grid I will buy it today!

  10. arlene allen says:

    As usual, a diversity of commentary that is all interesting.

    Part of the “cost” of renewables is also the energy storage. Irrelevant though, because we know the price will be more than burning the coal. That part is certain.

    Recent political dialogues have tended to incorporate the notion of being job friendly or being a job killer. Job killing is increasingly used in what seems to be completely arbitrary circumstances.

    The very real problems facing us right now, not including climate change, are daunting. Many voters are retreating from evidence and discussion because of the very real negative emotional results. Some can deal with more negativity than others.

    I fear, not as a cherished opinion, but as a betting person, that our current circumstances will segue us towards the easy choices. They are many and varied. By example: Oil pricing and peaking; foreign dependency; balance of trade; buy american; keep jobs at home; drive electric; burn coal -> climate change. You can substitute many permutations within that chain to make the same point.

    Transportation is critical to the economy / business and the secular economy (main street). It is a more difficult problem than increasing the size of the grid and the generating sources within it. I have, in recent times, come in the direction of Dennis’s thinking as regards utility scale vs. distributed generation. Regardless of what it ends up like though, it is eminently doable at either our homes and warehouses or the tidal / geothermal / solar / wind utility scale farms.

    The end game is quite simple however. We either tip the entire planet into many hundred thousand years of considerable warmth from what we have now, i.e. no ice sheets left anywhere, or we aggressively intervene before such a tipping point is reached. If you wish to debate tipping points, the math is against you on that one. If you believe in geoengineering to the extent that we will get a do-over, well, welcome to the federation of planets.

  11. Daniel Vasquez says:

    This is an update to my earlier posting. I tracked down the interview that I alluded to earlier. The author is Robert Bryce and his book is “Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future”. The web cast interview is here http://www.netcastdaily.com/broadcast/fsn2010-0505-1.ram The interview is very much worth listening to imho. I was born and raised in CA as an environmentalist. It took me awhile (years) to put it ALL, energy and environment into perspective. The interview will challenge what you believe, but that is what a good well reasoned debate/argument is all about isn’t it.

    Correction on the energy density figures from Robert Bryce:
    Nuclear 300 hp/acre
    Nat gas 288 hp/acre
    Solar 36 hp/acre
    Wind 6.4 hp/acre
    Corn ethanol 1/4 hp/acre

  12. Cameron Atwood says:

    Well, Craig, my head definitely doesn’t do the crystal ball thing (being far too thick to see through), but I think I can say with a high degree of confidence that we are reaching a fork in the road with at least two tines in it (and quite probably only two, given how far we’ve slipped).

    Here are the two tines, IME:

    1) The legislative members and moneyed interests in our nation get off their fat surpluses (bloated military budget, executive and corporate tax loopholes and tax cuts, etc.), and evidence the courage and foresight to actually move in the only wise direction ahead of those peaking crises that will otherwise utterly prevent the success of belated action.

    2) They don’t, and instead increasingly fight amongst themselves to stand on the heads of the rest of the population as they slowly sink in the quicksand of global renewables competition and the increasing cost and scarcity of ancient sunlight – and end their days (and the days of their heirs) as chattel to wiser nations of a less savory political nature.

    Here’s a possible third tine:

    3) We the People very, very soon will realize both our position and our power (before it’s too late and we’re little better than boiled frogs), and unite and organize, and act peacefully and collectively to demand and to force change (a Constitutional Amendment repudiating the false dogma of corporate personhood would be a good start, combined with public-finance-only elections that again make bribery properly and severely illegal).

    Quite honestly, I don’t see a fourth tine on this sharp and viciously stabbing little fork, and I don’t think we have a lot of time before events force us irrevocably into the second tine – what a tragic close to a bright chapter of human history written by a nation that once held such promise.

    My advice, if asked? Act… Now!

    • I agree 100%. The one way tine #1 happens is if #3 happens; power doesn’t give itself up voluntarily. And that, my friend, is why I do all this: to make my little (but growing) contribution to educating and energizing “We The People.”

  13. Eric J.Friend says:

    The discussion you have generated, Craig (sorry about the pun !), is mostly interesting; but your point is that fossil fuels are going to run out one day – which means no more plastics made from crude oil as well as gas. Nobody mentions how we are to cope with that scenario ! However, it seems to me that we still need a push from the people if renewables are to be adopted more quickly : choosing the appropriate politicians, yes; but making a ‘noise’ to support demand – through emails, public meetings, newspaper articles and using our purchasing power for, for example, ‘green’ autos. No politician could ignore more than 50% of his/her electorate. But I’m afraid we are too ‘soft’ – thinking, well, we can’t make a difference – when we can ! But we don’t try. And when did somebody seriously think about the heat under our homes, in the earth ? Isn’t ‘geo-power’ worth digging for, as well as ‘solar-power’ ?

  14. Emile Rocher says:

    enjoyed your book very much , I think it touched on all the hot points but that the potential for efficiency did not receive the attention it deserves. It really is true that the cheapest kwhr of electricity is the one that you don’t use. Colorado’s Rocky Mountain Instritute has done much ground breaking work on “negawatts” and how utilities can profit by reducing their customer’s energy use and promoting radically improved vehicle mileage.
    When the Shell Super mileage competition fell off the radar ( or did it- more on that later) the University of Saskatchewan team ( my alma mater) held the record with over 4,000 miles /gal . ( four thousand mpg) granted it was a tiny car and the ave speed was only 25 mph , but they also had to work with a 5 hp Briggs and Stratton engine. If 25 mph is not fast enough for you , the current land speed record for a human powered vehicle is currently over 80 mph.
    ASHRAE , the American Society of Heating Refrigeration and Air Conditioning Engineers , has determined that with good design the first 50% energy savings in new buildings is free, and they have undertaken to educate their members on how to do it.
    There are many good sources for residential building efficiency, the PassiveHaus standard being among the best . It took the principles in the Canadian R-2000 standard to the next level ending up with cost effective houses that use a tiny fraction of the energy of conventional buildings. The LEED program has been much more costly and less effective on the conservation front. Our North American energy use per capita is so huge compared to the rest of the world that we could easily cut it in half with conservation and efficiency alone, without any reduction in real standard of living. Google “Light up the World” to see what a charity is doing in the third world by providing 5 watt home lighting systems and see how the rest of the world lives. Keep up the good work.

    • You’re absolutely right about efficiency. If I had the book project to do over again, I would have gone in that direction as well. Btw, please feel free to write a “customer review” of the book on the Amazon page. Thanks.

  15. David Kiess says:

    Hi Craig,

    You don’t need a crytsal ball to determine the fate of our addiction to oil, just watch the ABC documentary “Over a barrel: the truth about oil” as I did last night. It is time for the subsidies for oil and gas to be shifted to renewables and the revolution can begin. It has already begun, and has demonstrated that the green economy creates more jobs and government revenues. There is no rational excuse left to argue against the viability of renewable energy. In fact I have come to view it as essential in the evolution of mankind.

    Cheers,
    David

  16. Roland Hamann says:

    Hello Mr. Shields.
    With interest I read your article on where we are going with our energy production. Using a crystal ball is an interesting approach, but why don’t you use the facts which you state in the article and tie them together. That will paint a picture clear enough. The evolution of our brains is too slow to allow for a major change of collective thinking this century – we will stay a bunch of greedy B……s. So it is extremely predictable, what is going to happen. We are past the “easy oil peak” (2006), so prices will continue to rise. All renewable techniques – like all other technologies devised by mankind so far -will come down in price and be competitive with fossils within the next few years. Actually, if you calculate all costs including externals, they beat the fossils including splitting atoms already. No political or economical power will be able to stop this and so everybody will jump on the band wagon at some stage soon. No reason for worries there. It is already happening. Here in good old germany, the jobs in renewables are about half compared to people working in car production (we are known for our car-industry worldwide and are strongly profiting from exporting our “Mercs, Porsches and Beamers”). The jobmarked in cars is stable, renewable jobs are growing at very healthy rates. I have carried out some company funded research of generation of monetary value and jobs through renewables in my home district in southern germany. Results: 10% revenue increase and 15% jobs increase per year throughout the last three years. That is “chinese” growth rates, if you ask me! This trend will continue. Plot it on a piece of graph paper and find out, that it is a question of time, until markets will react accordingly. And with the markets comes everything else. Politically, Kopenhagen was a huge success, as it aided in understanding, how politics works. It clearly showed, that if you wait for politicians to change anything major, you are probably well advised to prepare to wait for a looooong while. Politics waits for business, business waits for markets. Don’t worry! We will get there! And despite all the damaging of the planet we are so happily engaged in – This planet is a very strong system with lots of levelling capabilities and it will not die on us. The question is, how well we will adapt to the new environment we are creating. And that is a fundamental question of win or fail. It would not be the first time, that a species becomes extinct, but I think the chances of us leaving this party early are fairly slim.
    Keep up the good work. Best regards from germany!

    • I really like your analysis. Einfach herrlich, (simply stupendous) I would say.

      You’re absolutely right that renewables will happen in a big way fairly soon — if only because of the basic economics — which you’ve nailed here. As I’m fond of saying, “The only question is who’s going to make a buck in the process.”