Leaving fossil fuels in the ground vs. using them all up now

I wrote a think piece for Worldchanging playing off one of the basic arguments against climate mitigation (we'll be richer in the future and more capable of dealing with any effects) with the idea of leaving fossil fuels in the ground (will we also be more capable of using fossil fuels in the future, and should we strive to leave some?).

One thing that did not get into the article in time (but came the day after I submitted it!) was the fact that the Saudi King himself made reference toward specifically leaving some of their new found reserves for future generations! How is that for some new thinking!

Visit the site to read the commentary (http://www.worldchanging.com/archives/007962.html), or see below.

NOTE: As one of the early bloggers notes, nuclear energy has a wide range of possibilities (over carbon-based fossil fuels), and those were too much to go into for one article, aside from the fact that I am definitely not an expert on nuclear materials, for fission or fusion (always 50 years away!).

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Success is Winding Up with Oil in the Ground

Will we always be more capable in the future?

One basic economic argument against substantial climate change mitigation investments often centers on the concept that, because of monetary discount rates and historically-proven continuous economic and technological growth, society will be both ‘richer’ and more capable of dealing with possible negative effects in the future. Proponents of this argument often use it to reason that mitigation is simply too economically costly to pursue.

Can the same argument hold for production of fossil fuels? That is to say, if we are going to be richer and more capable in the future, won’t we have a better use for all energy sources, including fossil fuels? And will part of our ability to deal with societal issues, such as those caused by climate change, be predicated upon having available energy? If the answer to these questions is “yes”, then we should keep our fossil fuels in the ground.

The reason that the idea of preserving fossil fuels and ecosystems for future generations is not widely held is that the pattern since the industrial revolution of the 1800s shows us that energy consumption is highly correlated to economic growth, and thus the ability to become ‘richer’ (Figure 1). But recently Ecuadorian officials have proposed that the international community pay approximately half of the assumed value an oil deposit that lies beneath the Yasuni Amazon ecological reserve in order not to extract the oil [1]. Is this a beginning to question the present value of fossil fuels?

In the United States before the industrial revolution, the labor of 95 out of 100 people were required to feed the population of 5 million. Today, the less than 3 out of 100 are required to feed the US population of over 300 million - with food to spare for export. How is this possible? Fossil fuels provide high energy density storage sources that literally take the place of labor, and since their large scale use, we have used them to accumulate knowledge in how to further reduce physical labor. The huge reduction in farming labor over the last 200 years has resulted in “extra” hours for people to get paid to do things like drive around taking photos of celebrities for gossip magazines.

Because fossil fuels are limited and have provided us with the luxury of excess time, a major goal of society should be to break the causation between increasing fossil fuel consumption and increasing human development. I say human development and not economic growth, because the social aspect of economics is only a part of human development [2]. Extracting more fossil resources by consuming more fossil energy only buys more time to learn how to design and implement sustainable energy systems.

The laws of diminishing returns for fossil fuels cannot be avoided on the time scale of human civilization. Human civilization operated on a 100% sustainable energy a few hundred years ago, and after fossil fuels become completely uneconomical in hundreds of years more, we’ll again operate on a 100% sustainable energy system. The question is: what is that next 100% sustainable system going to look like?

Will it not be a success if human society finds an acceptable sustainable arrangement where we have excess fossil fuel reserves still lying in the ground? That is to say, we could define success as solving the energy and development problem before running out of economical fossil energy resources. Why consume the last of fossil energy reserves? Since reserves are partially defined by the economics of extraction, they are also partially a measure of our culture in how we value things, including energy resources, food, and social goods. If we want future human civilization to live in a manner better than the time before fossil fuels, that demands using our fossil fuels today such that we learn not to need them in the future.

Today we can’t make a photovoltaic solar panel without fossil-powered electricity manufacturing plant. We couldn’t build a hydroelectric dam without fossil-powered vehicles and cement plants. We can’t make and install a wind turbine without fossil-powered steel factories and transport systems. We need to track the progress, or lack thereof, of the ability of renewable energy systems to make themselves.

We didn’t need Nobel Prize Chemist Richard Smalley to tell us that the sun is the only source of energy for a sustainable human society. What we do need is everyone focused on the issue of both cultural and technological adjustments to make the most of solar direct (sunlight) and indirect (wind, waves, crops) energy.

Carey King, PhD, works at the University of Texas at Austin's Bureau of Economic Geology. This is his first contribution to Worldchanging.

notes:

[1] Pearson, Natalie O. Ecuador Plans to Nix Exploitation of 1B Bbl Oil Deposit. Dow Jones Newswires. March 03, 2008. Available at: http://www.rigzone.com/news/article.asp?a_id=57679.
[2] Sen, Amartya. Development as Freedom. First Anchor Books, 1999.

Shell CEO Talks of peak "easily accessible supplies of oil and gas" by 2015

As posted on other blogs (The Oil Drum and The Energy Blog) Jeroen van der Veer, the Chief Executive of Royal Dutch Shell, has suggested that the "easy oil" will not keep up with demand by 2015, and that a "blueprint" future energy scenario is preferable to a haphazard strategy. Now one of the world's largest companies says peak oil is within 7 years. Anyone want to work on battery and capacitor technology!?!

Use the title link to go to the Shell website for the statement, or just read below:

Two Energy Futures

* By Jeroen van der Veer

By 2100, the world’s energy system will be radically different from today’s. Renewable energy like solar, wind, hydroelectricity, and biofuels will make up a large share of the energy mix, and nuclear energy, too, will have a place. Humans will have found ways of dealing with air pollution and greenhouse gas emissions. New technologies will have reduced the amount of energy needed to power buildings and vehicles.

Indeed, the distant future looks bright, but much depends on how we get there. There are two possible routes. Let’s call the first scenario Scramble. Like an off-road rally through a mountainous desert, it promises excitement and fierce competition. However, the unintended consequence of “more haste” will often be “less speed,” and many will crash along the way.

The alternative scenario can be called Blueprints, which resembles a cautious ride, with some false starts, on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technological innovation provides the excitement.

Regardless of which route we choose, the world’s current predicament limits our room to maneuver. We are experiencing a step-change in the growth rate of energy demand due to rising population and economic development. After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand.

As a result, we will have no choice but to add other sources of energy – renewables, yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.

In the Scramble scenario, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of local coal and homegrown biofuels increases fast. Taking the path of least resistance, policymakers pay little attention to curbing energy consumption – until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.

The Blueprints scenario is less painful, even if the start is more disorderly. Numerous coalitions emerge to take on the challenges of economic development, energy security, and environmental pollution through cross-border cooperation. Much innovation occurs at the local level, as major cities develop links with industry to reduce local emissions. National governments introduce efficiency standards, taxes, and other policy instruments to improve the environmental performance of buildings, vehicles, and transport fuels.

Moreover, as calls for harmonization increase, policies converge across the globe. Cap-and-trade mechanisms that put a price on industrial CO2 emissions gain international acceptance. Rising CO2 prices in turn accelerate innovation, spawning breakthroughs. A growing number of cars are powered by electricity and hydrogen, while industrial facilities are fitted with technology to capture CO2 and store it underground.

Against the backdrop of these two equally plausible scenarios, we will know only in a few years whether December’s Bali declaration on climate change was just rhetoric or the start of a global effort to counter it. Much will depend on how attitudes evolve in China, the European Union, India, and the United States.

Shell traditionally uses its scenarios to prepare for the future without expressing a preference for one over another. But, faced with the need to manage climate risk for our investors and our descendants, we believe the Blueprints outcomes provide the best balance between economy, energy, and environment. For a second opinion, we appealed to climate change calculations made at the Massachusetts Institute of Technology. These calculations indicate that a Blueprints world with CO2 capture and storage results in the least amount of climate change, provided emissions of other major manmade greenhouse gases are similarly reduced.

But the Blueprints scenario will be realized only if policymakers agree on a global approach to emissions trading and actively promote energy efficiency and new technology in four sectors: heat and power generation, industry, transport, and buildings.

This will require hard work, and time is short. For example, Blueprints assumes CO2 is captured at 90% of all coal- and gas-fired power plants in developed countries by 2050, plus at least 50% of those in non-OECD countries. Today, none capture CO2. Because CO2 capture and storage adds costs and yields no revenues, government support is needed to make it happen quickly on a scale large enough to affect global emissions. At the least, companies should earn carbon credits for the CO2 they capture and store.

Blueprints will not be easy. But it offers the world the best chance of reaching a sustainable energy future unscathed, so we should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age.

The world faces a long voyage before it reaches a low-carbon energy system. Companies can suggest possible routes to get there, but governments are in the driver’s seat. And governments will determine whether we should prepare for bitter competition or a true team effort.

Jeroen van der Veer, Chief Executive of Royal Dutch Shell plc, is Energy Community leader of the World Economic Forum energy industry partnership in 2007-2008 and chaired this year’s Energy Summit in Davos. He also chairs the Energy and Climate Change working group of the European Round Table of Industrialists.

Peak Energy, Coal Reserves, and Climate Change

The blog The Oil Drum has posted a writing by Dave Rutledge, the Chair for the Division of Engineering and Applied Science at Caltech. In this post and in a YouTube video Rutledge makes a few basic claims or revelations, that if correct, should profoundly affect how we (the United States and the World) treat the issues of energy supply and climate change. Also see a webpage posted by Dave Rutledge where you can download his power point presentation and Excel files.

The three basic points he makes are:

1. Coal reserve estimates are inaccurate, outdated (derived and unchanged significantly since 1974), and in need of revision quite a bit downward. He references a National Academies report that discusses the need for new and accurate accounts of coal reserves and resources.

2. Hydrocarbon (oil and natural gas) and coal resources are well below those that are use by the IPCC climate models to estimate future global warming. The end result is that there is not enough mineable fossil fuels to cause the warming and sea level rises that are being predicted. For example, in some IPCC models, oil production is assumed larger in 2100 than today. Is this possible? Does this mean the use of tar sands and oil shale, or is using those resources even not enough? Rutledge's discussion of this concept makes it seem unlikely that new sources will take up the slack.

3. For climate change reasons, or fossil fuel depletion reasons, work on implementation and research and development into renewable energy systems is an imperative. I'll add not energy efficiency per se, but energy reductions that still enable us, as humans, to continue to be healthy and interact culturally as needed to have good lifestyles.

I will not further discuss this topic as one should refer to the links within this post for further information from the Dave Rutledge himself.