Forget Climate Change: A Fossil Fuel Future’s a Fantasy

on Jenkins in his article “The warmaholics’ fantasy” (The Australian 06/01/2009) ends by asking this: “The real question is in acknowledging the end of fossil fuels within the next 200 years or so: how do we spend our research time and dollars?”

Unfortunately, Jenkins has made the common error of not factoring in growth in demand. The latest annual figures available from BP’s authoritative Statistical Review of World Energy 2008 show that energy use grew 2.4% from 2006 to 2007. If we use this number as escalation against 200 years at current usage, we actually only have 75 years of fossil fuels left. Allow a more aggressive growth rate of 5% to factor in industrialisation of currently less developed countries, and fossil fuels will be gone in 50 years.

I’ve graphed the trend with 200 years’ worth of fossil fuel as the starting point to make it easy to see how the various growth rates pan out. As you can see, constant use takes us to zero after 200 years (off the scale of the graph). As you should be able to see from the graph, when constant demand would have used less than 40% of all carbon fuels, 2.4% growth will have used them all up. 5% growth would hit zero when only about 25% of reserves would have been consumed at fixed demand.

While it’s conceivable that 200 years is an under-estimate, any excess on that amount would include fuels from increasingly inaccessible and environmentally fragile sources. In fact, even to reach that level would require exploiting resources like tar sands and oil shale that are not only environmentally problematic but also expensive to process. What’s more, coal and oil are complex mixes of chemicals that have many uses; it’s silly to burn valuable, irreplaceable chemicals.

Long before we reach an era of real shortage, markets will be subject to massive swings as speculators ride fears of shortage – as we saw recently with oil prices. As demand from developing countries increases, we can expect prices to escalate for the simple reason that supply is unlikely to keep up with demand. We’ve already mined out much of the coal that’s really easy to dig up (Britain had massive reserves in the nineteenth century), and oil is increasingly being sought in expensive locations like the deep sea and Arctic.

Even without disputing Jenkins on climate change (I can’t see how he advances the debate with ad hominem attacks – and am pleased to see he has subsequently apologised for this in a letter in The Australian), there is a clear case for exploring alternative energy now, and doing so aggressively.

It’s clear that we will need to find alternatives to fossil fuels and sooner than most think. Will this necessarily result in massive pain? Luckily, Cambridge physics professor David MacKay has already provided a good start at understanding the problem in a new book, Sustainable Energy — without the hot air (not yet published in Australia; you can download a free copy from his web site). To cut to the chase, he calculates that Britain will battle to achieve a sustainable-energy economy because it has too high a population density and not enough sun. Much of Europe likewise will have to look to sunny low-population countries like Libya to import solar electricity. Australia gets little coverage in the book since the focus is on solutions for the UK. MacKay has reduced his calculations to simple examples that can easily be reworked for other parts of the world, or different solution mixes. Comparing us with the UK and its need to import solar electricity from Libya for example illustrates that we really do not have much of a problem here. Our population density is less than Libya’s, and we have plenty of sunshine.

What of the problems often raised about intermittency of wind and solar power? There are many creative solutions out there of which MacKay provides a good sampling. He reminds us that electricity providers have to be geared to handle massive changes in demand; much of the same techniques can be used to manage changes in supply. For example, electric cars, while charging overnight, could be equipped with smart meters that draw power when it’s cheap, and put some back when it’s expensive. Heavy users whose usage is not time-dependent could be scheduled to draw power when it’s plentiful. And of course existing techniques for load management such as pumped storage (sending water uphill when electricity is plentiful; using a downhill flow later to drive a generator) can be scaled up.

There’s too much detail in the book to cover in a short article like this. I strongly recommend that anyone interested in energy alternatives read it. Since he has neatly compartmentalised his solutions, it is relatively easy if you disagree with one to pull it out and replace it by another option. I’ve seen many attempts at covering small parts of the problem. Only a comprehensive approach such as this is really any good. Not only that, MacKay has a fine sense of humour.

I propose we stop worrying about who is right and wrong in the climate change debate (see other articles on this site for some answers to Jenkins’s points), and move as fast as we can to sustainable energy. To do so requires some hard political will, not wishy-washy strategies like charging for pollution permits then giving most of the money back to the big polluters. If we get this right, we will be insulated from damaging swings in energy commodity prices. Should the worst predictions of climate change turn out to be true, we will be well on the way towards a clean energy economy. If not, we will be a bit ahead of where we need to be when fossil fuels start to run out and become really expensive. All three ways, we win.

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Also published at Online Opinion.

Peak Oil, Poverty, Moore's Law and Manure

Peak Oil

As oil and with it products we use to fuel our cars and trucks gets more expensive, there is growing anguish about the effects on the cost of living. China alone is adding millions of cars a year to the total, and peak oil theory says we should be hitting limits soon on production growth.

In reality, as prices go up, there will be options of exploiting kinds of oil previously too expensive: under the deep sea, in the arctic (conveniently being freed of ice; what's doing that, I wonder, if there's no climate change?), tar sands, shale oil… so production may not drop off as fast as predicted by peak oil theory. But should we want to squeeze every last drop of oil (and coal and gas) out of the ground?

Not only do we have climate change to worry about, but the economics of fossil fuel has a lot to do with the gap between rich and poor nations.

The Poverty Gap

In the twentieth century, the cost of communication increasingly split rich from poor. By communication, I mean movement of people, goods and information. Part of this was energy; another part telecommunications. The common thing was the distinction between countries with a comprehensive network of roads, rail, electricity and telephone connections, and those without.

Addressing this gap became increasingly hard, as the cost of new infrastructure has to compete with infrastructure created in an era of lower costs (e.g., coal was cheaper because demand was lower). It is this gap which for example makes fruit in a third world country absurdly cheap in tradable currency terms, while making a local phone call is ridiculously expensive. There's a kind of arbitrage, but one where the places where the price differences occur are too hard to connect, to correct the pricing anomaly (as would happen for example if the US$ to euro exchange rate was out of synch with the US$ to pound sterling exchange rate).

Somehow, despite all this, we have arguments from climate change inactivists that addressing poverty is an alternative to addressing climate change. Yet if you accept that poverty is largely structured into communication infrastructure (or lack thereof in poorer countries), new technologies that reduce the need for infrastructure can go a long way to closing the poverty gap.

An example is the cell phone. In many poor countries, cell phone roll-out has been many times faster than predicted, because of communication starvation. People in Nigeria didn't have phones not because they were poor, but because there was no infrastructure. Cell infrastructure is relatively cheap to put in: as long as you have electrical power, you can virtually parachute base stations in. By contrast, a nation-wide wired phone network needs wiring to the home, with extensive local wiring, even if trunk lines are wireless.

This example generalizes to other cases like electricity. If you can generate power locally without a grid, you can make energy accessible a lot faster in countries without infrastructure. Eliminate the cost of consumables, and you also eliminate another huge problem: rapid price increases as supply fails to keep up with demand. If you think this is bad for wealthier countries, what will doubling the fuel price to to someone who can barely afford a car?

Moore's Law

The nice thing about renewables is that technology changes reduce prices. It doesn't matter if coal supply runs low, oil runs out or gas slows to a trickle. The wind will still blow, the sun will still shine. Just as Moore's Law has pulled computer prices down dramatically over decades, photovoltaics and wind are getting cheaper. Eliminate the consumables and you have a real revolution in energy economics, far bigger than Henry Ford's revolution in personal transport.

This is an exciting time once we forget doom and gloom and think of what could actually be done.

Instead of living in terror at consequences of change, how about accepting that we are looking at a change as big as the move from horse and buggy to cars?

Think of it this way: the cost of renewable energy sources only depends on the technology, not consumables. Once we get this right, we can make energy cheaper with every new development. As long as we are stuck with fossil fuels, prices can only go up as demand overtakes supply.

Why are we so scared of this great new concept? Once we solve the energy storage problem (there are already good ideas like compressed air) poorer countries will benefit too. What's the downside? Unless you own a coal mine ... the horse industry lost big time when the Model-T appeared, but think of the advantages to society as a whole: personal mobility on a level never experienced before.

Now we have the next level: energy with radically lower constraints on supply and infrastructure. If you can do local microgeneration with efficient storage, you no longer need a grid. In rural Africa, for example, you could almost parachute in (where have we heard that before?) a solar or wind microgenerator.

Manure

Back in the nineteenth century, it's alleged that someone predicted that London would be metres deep in horse manure in a few decades. It's a nice story, even if it's improbable that it's true (I have yet to find a direct source for it, and there are several variants – the hallmarks of a myth or urban legend). It is certainly true that getting rid of horse manure in the streets of major cities was a growing headache – just as cutting carbon emissions is today.

So why, today, are we staring down the problem of curbing carbon emissions when there are far superior alternatives – alternatives that only need a little development to be viable?

The only alternative is to consume fossil fuels like there's no tomorrow, then it's back to the stone age. Why are we even debating this?

Exxon-Mobil to abandon climate change obfuscation

I stumbled on this, probably not meant to be in a publicly accessible place. I hope ExxonMobil will not be too outraged if it appeared early on my blog.

-----EMBARGOED UNTIL April 1st, 2008-----

SPRINGFIELD--(BUSINESS WIRE)--April 1, 2008--Speaking today at City Hall, Springfield, C M Burns, President Corporate Affairs of Exxon Mobil Corporation (NYSE:XOM), announced a major change in ExxonMobil's approach to climate change.

Burns was speaking as part of Springfield's new Business Leaders Who Pay To Speak Program.

He described the actions ExxonMobil has taken in the past to obfuscate climate change science as "consistent with maximizing the corporation's profits. The modest cost of piggybacking onto tobacco and ozone hole denial has been an excellent investment. Excellent..."

Reaffirming ExxonMobil's commitment to being a constructive and active participant in dialogues concerning proposals to reduce greenhouse gas emissions, Burns outlined the de facto change in policy. "This time, we actually mean it. We came to the sudden realization that pretending the science was wrong would not save us if everyone is burned to a crisp. Bad for profits. Very bad."

He highlighted ExxonMobil's actions to increase confusion about climate science. These included giving financial support to groups claiming to represent "sound science". "Sound science," he explained, "is that which increases ExxonMobil's profits, no matter how tenuous or where published." These same groups, he continued, were paid to portray peer reviewed science as "junk science", no matter how well-founded, if it was contrary to ExxonMobil's interests.

In describing ExxonMobil's work with partners, Burns reported that the company is now planning on entering a new phase of supporting climate science that is accurate and not influenced by short-term concerns for profit. To facilitate this change, a blind trust to disburse research funds is being set up, to be headed by fabled jazz saxophonist, B.G. Murphy. Said Burns, "No one could imagine Murphy as advocating causes dangerous to the common good."

Steepling his fingers for emphasis, Burns concluded, "We must care enough to treat the risks of global warming seriously. We need to manage the risks of companies distorting the science effectively if we are to maximize the economic and environmental benefits available to future generations."

Full text of the speech is available on the ExxonMobil website. Some text copyright L Simpson.

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NOTES TO EDITORS

* The Business Leaders Who Pay To Speak Program aims to encourage debate amongst senior business figures on issues where they are prepared to pay to be heard. The inaugural event took place in November 2007 and C Montgomery Burns was the second speaker in this Program. The first speaker was less gullible and merely bribed the press without bothering to show up.

* The International Energy Agency estimates that, by 2030, it is likely world energy demand will increase by 45 percent. This growth equates to about 100 million barrels of oil equivalent a day, which is in addition to the 240 million barrels oil equivalent a day currently consumed.

* No one with any sense actually believes that this amount of oil can continue to be extracted without running into limits, sometimes referred to as "peak oil".

CONTACT: ExxonMobil
Media Relations: Dallas (US) office, +1 972 444 1107
or
Leatherhead (UK) office, +44 1372 222261/74

SOURCE: Exxon Mobil Corporation