/ 7 June 2007

Planning for a future without oil

Peak oil predictions vary depending on who one speaks too and which type of modelling is used. According to some experts, we are in a peak oil period already, meaning that we have reached the crest of the ­supply curve and are consuming the remaining reserves of oil.

Some have mooted the idea of the oil economy being replaced by the hydrogen economy because it is least likely to disrupt our ­current way of life. However, there is a unanimous view that we are many decades away from the hydrogen economy — it requires secure and abundant supplies of electricity to produce liquid hydrogen as a replacement for oil.

Oil peak predictions are com-plex — they must take into account known reserves, estimations of undeclared reserves, future dis- coveries, technological change and development of new sources to complement existing demand.

Some of the new sources that are likely to change the peak oil scenario are the financial feasibility of oil shale, oil tars (especially extensive reserves in Canada), the production of biofuels from crops, the conversion of coal and gas to ­liquid fuels and the development of more efficient cars (such as hybrids) that consume less petroleum. These might stretch the longevity of oil as the primary energy source to fuel our economies.

However, energy efficiency gains can give one a false sense of comfort. Beware the proverbial Khazzoom-Brookes postulate, named after the two economists who developed it in the 1970s, which poses the counter-intuitive — energy savings through efficiency measures in fast-growing economies actually lead to further exponential growth in consumption of the resource.

This paradox seems to crop up time and again when energy efficiency is lauded as a solution.

Peak oil debates are intensely political also — they revolve around economic interests as much as alternative lifestyle options. One finds the doom-sayers and the eternal optimists tugging this and that way. But pragmatism will dictate we should be somewhere between the doom-sayers and the denialists, and not put all our eggs in one basket.

However, what is undeniable is that our dependency on oil has made it one of the most valuable commodities on earth — even worth wars. In the case of South Africa, besides the niceties of the African renaissance, our foreign policy in Africa and the Middle East has in sight the security of oil supply chains and a desire not to be outsmarted by our rivals.

South Africa is particularly vulnerable. Most of our strategic oil reserves maintained during the apartheid period have been sold. We have few natural reserves of oil or gas, but abundant coal and, luckily, some of the leading technologies on coal-to-liquid processes developed by Sasol. But these are expensive avenues for increasing our supply of oil.

Biofuels have been approved recently as complementary sources, but they, too, will not remove total dependency on the importation of oil from regions that are politically volatile. Biofuels compete with food security and are not entirely a safeguard.

There is no free lunch. Inter- national geopolitics are shifting sands. No country should have an energy-security policy that is reliant totally on the goodwill foreign ­countries.

Today, the transport sector is the key dependent sector on oil. But oil supports a raft of other industries also — plastics, ferti- liser and pesticide inputs for the agricultural sector, heating and many more.

The sudden removal of oil from the equation will no doubt bring about a total economic standstill. Oil is literally the ingredient that keeps the economic machine ticking and preserves the surburban way of life. How we have so knotted up our lives with oil is the subject of political economy, but we have to think of how to move away from this situation into more flexible terrain.

There has been no debate on energy transition in South Africa. There has been talk about South Africa shifting its dependency on oil and possibly looking at the hydrogen economy. However, there is a need to canvass wide opinion across the spectrum of expertise on how to handle the transition from oil to new and novel energy options.

So critical is the question that it is surprising that it is not being dealt with more urgently. Transition periods of about 50 years, the time proposed when oil depletion reaches a point of real constraint on economies, are not long. To replace one system with another requires national will, great institutional coordination, organisation, cooperation by different interests and an investment regime to ensure that changes are meaningful and have high impact.

South Africa has a dual economy and our transition model will be different from those of developed economies, so we have to be even more innovative. Oil will be depleted, and thinking about a post-oil world has to begin sooner rather than later. Shifting the power of our entrenched way of life is no small feat — it requires global cooperation and action. South Africa has a leadership responsibility beyond its own shores.

Saliem Fakir is a Greening the Future judge, as well as a senior lecturer at Stellenbosch University’s centre for renewable and sustainable energy studies