The current world order is essentially about the geopolitics of oil, and the book The End of Oil by Paul Roberts is a tour de force in charting, in a highly readable, balanced and objective manner, a fluid, constantly changing dynamic. It is to be hoped that it will be widely read in the United States (the home country of the author), since Americans are the least energy-conscious people in the world, are profoundly ignorant of what energy is and continue to live in a state of denial.
Paul Roberts describes the oil problem with exquisite clarity. Oil now provides 40% of the world energy market, although 26% still comes from coal and 24% from natural gas. By 2035 the world will use more than twice as much energy as it does today. Demand for oil will grow from today’s 80-million barrels a day to around 140-million barrels. The use of natural gas, it is widely predicted, will expand even more, by some 120%, and coal by nearly 60%.
These are staggering requirements: so where will all this extra hydrocarbon energy come from?
For the past decade the world has used 24bn barrels of oil a year, but has found on average less than 10bn barrels of new oil annually. In other words, demand for oil is soaring, especially from the industrialisation of China and India, while new capacity and reserves are shrinking. Moreover, the political instability of the world energy market is also growing apace. By the end of the current decade, Opec will be supplying 40% of the world’s oil, well up from 28% today.
This background gives an interesting insight into the motives behind the Iraq war. Before the war, Iraq was producing 3,5-million barrels a day, and many in the US administration believed this could be doubled by 2010. If Iraq could then be ‘persuaded†to ignore its Opec quota and produce at maximum capacity, the flood of new oil would end Opec’s control over the oil price. Unlocking Opec oil, combined with being a decade ahead of the world in military technology, would guarantee American supremacy for a century or more. Control of oil would not only underpin American economic strength and power, but it would also be part of a much bigger geostrategic vision, offering leverage over countries more dependent on the Gulf for oil, especially China and Europe.
Even though the US neocon vision has gone badly awry, Washington’s response to the approaching world energy crisis — to secure, by force if necessary, the remaining sources of oil supply — will have lethal consequences for the planet. Global warming emissions from the burning of fossil fuels, primarily oil and coal, are increasing at 3% a year, and at this rate will reach 12-billion tons a year by 2030 and over 20-billion tons by the end of the century.
On that basis, greenhouse gases in the atmosphere will reach a concentration of 1 100 parts per million (three times the level of today), at which point even sceptical climate scientists concede that all hell will break loose.
So is there an exit from the disaster to which we are heading? As Roberts points out, solar energy and wind power have huge potential, but are not yet ready for prime time. Together they currently provide less than half of 1% of the world energy total. And there are still enormous hurdles to overcome. The best solar-power cells have efficiencies of only 10%; the costs of manufacturing these silicon-based cells remain incredibly high; and the power generated is intermittent, depending on climatic conditions.
The best alternative is one still too little talked about: conservation. The volume of energy we squander is prodigious. US power plants discard more energy in waste heat than Japan’s entire energy requirement. Only 15% of the energy in a gallon of petrol ever reaches the wheels of a car, and less than a quarter of the energy used in a standard oven reaches the food.
It has been calculated that a mere 2,7 miles-per-gallon improvement in the fuel economy of American cars and light vehicles would be enough to do without the need for oil imports from the Persian Gulf entirely — a rather better solution than launching a war on Iraq. Energy-efficiency gains could actually save more oil than could be found in the ground, and at lower cost than the average market price for oil. The implications of this are stunning. If we reduced energy intensity by just 3% a year, we could meet world demand in 2100 with only a quarter of the energy used today.
The trouble is that the ‘efficiency dividend†has so often been misspent. The fuel economy of cars has improved dramatically over the past decade, but consumers have responded by buying more cars or bigger cars, including the absurdly misnamed sports utility vehicles. Today’s lighting systems are dramatically more efficient, but any potential energy savings are offset by dozens more recessed or track lights. Other energy savings are spent on more air-conditioning systems, big-screen home-entertainment TV centres and additional refrigerators.
The lesson of all this is the perversity of minimising cost, which is the goal of technology, rather than maximising conservation. But it does open up a real prospect of a different energy future — not one based on carbon-free energy sources alone, which are coming on stream too slowly, but one that joins these technologies with huge gains in efficiency that could then power cars, houses and industry, requiring only half or a quarter of the energy.
What are the chances of this becoming the driving force of a new global energy order? At the moment, next to nil. The wars in Afghanistan and Iraq were primarily about oil. The US is now building up a military presence in West Africa because it has known oil reserves of 66-billion barrels — at least a 10th of those in the Middle East.
Significantly, the US showed no interest in sending troops to oil-less Liberia. And US domestic investment in hydrocarbons continues to rise, with US coal consumption (and CO2 emissions) expected to increase by a further 25% by 2020, when nearly half of its power will come from the coal-fired sector. Given the jobs and votes attached to that sector, this goes a long way to explain US resistance to the Kyoto protocol.
So will the market ever move? Roberts quotes some very revealing research from the University of California which measured the hidden ‘well-to-wheels†costs of the pollution each gallon of petrol accounts for — from when the oil is produced and refined to when it is burned in the engine, including air pollution, climate change and military expenditures to protect oil supplies. If these factors are considered in the price of a car or the price of petrol, as they should be, the hydrogen fuel cell car becomes about 25% cheaper than today’s petrol-driven cars.
Roberts’s book ends with a vision of a ‘bridge economyâ€, the transitional phase to a new energy order for the US. It will initially be fuelled by gas, much cleaner than oil or coal, so dramatically increasing the availability of gas should be a prime focus for the US.
Second, a carbon penalty needs to be introduced, perhaps a cap and trade system, but including also developing coal gasification and carbon sequestration as the essence of clean coal. Third, a massive uplift in US car efficiency should be achieved by reintroducing the highly successful Corporate Average Fuel Economy standards, which Reagan abolished in 1987. Roberts adds here the interesting idea of a ‘feebate†— a stiff penalty (say $5 000) if a car is bought that does 20 miles per gallon or fewer, and the same amount as a reward if a car is bought that does 40 miles per gallon or more.
If I could recommend some books for George Bush and Tony Blair to read, this would be one of them. –