The New 30-Years' War: Who Will Be the Winners and Losers in the Great Global Energy Struggle to Come?
Continued from previous page
The Existing Energy Lineup
To appreciate the nature of our predicament, begin with a quick look at the world’s existing energy portfolio. According to BP, the world consumed 13.2 billion tons of oil-equivalent from all sources in 2010: 33.6% from oil, 29.6% from coal, 23.8% from natural gas, 6.5% from hydroelectricity, 5.2% from nuclear energy, and a mere 1.3% percent from all renewable forms of energy. Together, fossil fuels -- oil, coal, and gas -- supplied 10.4 billion tons, or 87% of the total.
Even attempting to preserve this level of energy output in 30 years’ time, using the same proportion of fuels, would be a near-hopeless feat. Achieving a 40%increase in energy output, as most analysts believe will be needed to satisfy the existing requirements of older industrial powers and rising demand in China and other rapidly developing nations, is simply impossible.
Two barriers stand in the way of preserving the existing energy profile: eventual oil scarcity and global climate change. Most energy analysts expect conventional oil output -- that is, liquid oil derived from fields on land and in shallow coastal waters -- to reach a production peak in the next few years and then begin an irreversible decline. Some additional fuel will be provided in the form of “unconventional” oil -- that is, liquids derived from the costly, hazardous, and ecologically unsafe extraction processes involved in producing tar sands, shale oil, and deep-offshore oil -- but this will only postpone the contraction in petroleum availability, not avert it. By 2041, oil will be far less abundant than it is today and so incapable of meeting anywhere near 33.6% of the world’s (much expanded) energy needs.
Meanwhile, the accelerating pace of climate change will produce ever more damage -- intense storm activity, rising sea levels, prolonged droughts, lethal heat waves, massive forest fires, and so on -- finally forcing reluctant politicians to take remedial action. This will undoubtedly include an imposition of curbs on the release via fossil fuels of carbon dioxide and other greenhouse gases, whether in the form of carbon taxes, cap-and-trade plans, emissions limits, or other restrictive systems as yet not imagined. By 2041, these increasingly restrictive curbs will help ensure that fossil fuels will not be supplying anywhere near 87% of world energy.
The Leading Contenders
If oil and coal are destined to fall from their position as the world’s paramount source of energy, what will replace them? Here are some of the leading contenders.
Natural gas: Many energy experts and political leaders view natural gas as a “transitional” fossil fuel because it releases less carbon dioxide and other greenhouse gases than oil and coal. In addition, global supplies of natural gas are far greater than previously believed, thanks to new technologies -- notably horizontal drilling and the controversial procedure of hydraulic fracturing (“fracking”) -- that allow for the exploitation of shale gas reserves once considered inaccessible. For example, in 2011, the U.S. Department of Energy (DoE) predicted that, by 2035, gas would far outpace coal as a source of American energy, though oil would still outpace them both. Some now speak of a “natural gas revolution” that will see it overtake oil as the world’s number one fuel, at least for a time. But fracking poses a threat to the safety of drinking water and so may arouse widespread opposition, while the economics of shale gas may, in the end, prove less attractive than currently assumed. In fact, many experts now believe that the prospects for shale gas have been oversold, and that stepped-up investment will result in ever-diminishing returns.