You've got to be very careful if you don't know where you're going, because you might not get there.
I knew I was going to take the wrong train, so I left early.
If you come to a fork in the road, take it
The impending peak of world oil production is a tangible limit on liquid fuels growth, and a signpost pointing to other ceilings on natural resources. While there is some debate about whether coal supplies are similarly constrained, there is little doubt that anthropogenic climate change imposes a practical limit on how much coal humankind should burn. Similar difficulties will arise with natural gas production in the 2020s, with impacts coming sooner in the North American market.
The economic theory of non-renewable resources like oil and coal confidently states that as the price of these commodities rises, substitutes become affordable, eventually replacing the increasingly scarce originals. Thus we will substitute electricity (via plug-in hybrids as currently envisioned) for oil, and generate the electricity from a diverse number of sources—nuclear, fossil fuels, wind, solar, geothermal and hydroelectric. Another story says that we will partially replace oil with biofuels or coal-to-liquids (CTL) conversions. Matters get complicated in a hurry as we find ourselves scrambling to define the multitude of technofixes and efficiency measures necessary to replace the "simple" fossil fuels world we are accustomed to.
Consider this reference case graph from the EIA's Annual Energy Outlook in 2008.
I would like to call your attention to two aspects of this graph: 1) U.S. electricity consumption has been growing steadily since 1980, with most of that growth coming from coal-fired generation and natural gas; and 2) the projected share from all sources other than coal is just slightly higher in 2030 than it was in 2006, with renewables rising but natural gas, for which the share has been overestimated, falling. Thus, most future growth comes from coal.
I can already hear the strenuous objections! The renewables share is far too low in 2030, and perhaps the nuclear share as well, depending on who you talk to. The renewables line will rise as the coal line does, or to hear some tell the story, the renewables share will replace most of the coal-fired power generation. I will not be debating this point today. My story Al Gore's Fantasy Energy Challenge addresses some but not nearly all of the issues concerning how far and how fast renewables will replace fossil fuels.
The EIA's renewables projection appears to be a reasonable "ballpark estimate" of what the actual output (mostly from wind or solar thermal) will be in 2030, which is a scant 22 years from now. The problem lies with the EIA's assumption of growth in coal consumption (see below). Thus it is hard to assess what the renewables share will be because total consumption is a moving target.
Some people seem to think that I am against growing renewables because I have pointed out constraints on that growth. Nothing could be further from the truth. The burden of proof lies with those who argue that solar, wind, and the rest can replace all (or 90% or 50%) of the power generation from fossil fuels within a decade or even by 2030. The U.S. consumed 3814 billion kilowatt-hours of electricity (graph above) in 2006. I'm from Missouri—show me!
It is entirely possible—some would say likely—that the United States, China, the EU, India, et. al. will lack the spirit of cooperation and political will necessary to reduce CO2 emissions to combat global warming. This outcome places us in the "business as usual" (BAU) scenario (graph left from Hansen and Kharecha). Indeed, we are still on the BAU path in 2008 despite all the hand-wringing about climate change.
Once oil peaks, followed by natural gas in the 2020s, the Intergovernmental Panel on Climate Change (IPCC) and many others assume that humankind will burn huge amounts of coal thereafter. Jørgen Ørstrøm Møller's The Return of Malthus (The American Interest, July-August, 2008) puts it this way.
In the slightly longer run, the issue will not be so much the price of oil but the overall composition of energy sources. Substitution from oil and gas into other energy sources will occur, but more likely than a major shift to renewable sources such as wind energy or solar energy will be a switch to coal and perhaps nuclear power. If coal plays the major role, the global economy's dependence on fossil fuels will be basically unchanged. Here, too, prices for energy will rise because of the need for large investments in infrastructure...
Møller's viewpoint assumes that at least one of the pathways in the simplified diagram below scales up to a level which mostly replaces liquid fuels refined from oil over the long term.
What if neither direct coal-to-liquids conversion (e.g. via Fisher/Tropsch) or mass production of electric transport can scale up to the desired levels? For the moment, accept the premise that both technologies fall far short of the required scale. I am not going to argue this crucial point today, I just want to engage you in a thought experiment. I am also going to assume that CTL replaces less than 5% of oil products over the long term, which I regard as insignificant (graph above left).
In the diagram, you could substitute renewables or nuclear for coal in the electric transport pathway, but I am concerned about coal for now.
In a world with a diminishing oil supply over the long term, and given the fact that biofuels production is largely constrained by our ability to tap the Earth's net primary productivity for this purpose, I fail to see how future economies can thrive & grow in the absence of a robust transportation system which remains largely dependent on liquid fuels in our hypothetical scenario.
If coal does not substitute for oil, oil prices are very high, and our ability to move commodities, manufactured goods, staples or people around from place to place must therefore diminish in the future, and GDP levels in the world's economies are not growing (or falling) as a result, I fail to see how coal consumption would grow to the levels assumed in "business as usual" (or most other IPCC) scenarios.
I assume, as the EIA and no doubt the IPCC do, that coal consumption is generally a function of economic growth. Future CO2 emissions from coal would thus fall well below levels assumed by the IPCC whether or not the Earth contains sufficient recoverable coal reserves to support IPCC emissions estimates over the long term.
If you accept this hypothetical argument wholly or mostly, you can easily see that the peak of world oil production has dramatic effects on future climate change scenarios if coal does not replace liquid fuels. And if the electric transport pathway does not scale, then it doesn't matter if you replace coal with renewables or nuclear. It is for this reason that I consider the substitution of electricity for liquids in transportation to be the key energy issue of our time.
A modified scenario in which we successfully electrify railroads, light rail, trolleys, lots of buses, etc. but do not (and can not) build hundreds of millions of privately owned plug-in hybrid vehicles presents a possible compromise solution. The problem in this scenario revolves around our ability to build the required infrastructure to support massive public transportation systems under sub-optimal economic conditions. This "middle way" scenario may be our best bet if electric transport only partially scales up, but it also requires us to mostly forego privately owned automobiles and light trucks.
If this scenario is completely wrong and happy motoring continues by other means, and renewables or nuclear can not replace coal, then the climate change argument limits future coal consumption. If we "solve" the peak oil problem in the transportation sector via electricity and do not have the wisdom to limit coal emissions, then it behooves us to determine how much recoverable coal there is left to burn. This estimate is important in all cases, but is especially important if electrified transport scales up and coal consumption is not curtailed.
I can not envision any pathway in which total U.S. energy consumption continues to grow (graph above left) if humankind is going to address both peak oil and global warming. (Take the EIA liquids numbers with a grain of salt.) After peak oil, the end of energy growth is now here if we do the right thing about the climate.
We clearly have a tough situation on our hands. To prevent runaway CO2 emissions, we should not burn any more coal than we do now. Preferably, we should phase out coal consumption by some percentage each year. Thus under reasonable assumptions about scaling up renewables or nuclear, U.S. electricity consumption, as with oil, must remain below present levels from now on. This conclusion seems inescapable to me—all contrary conclusions appear to be based on some sort of techno-optimist fantasy.
Crazy theories like "abiotic oil" concoct a story to justify our governing growth paradigm for petroleum. Less crazy electricity "growth" stories that strike me as being implausible include—
Each of these stories attempts to buttress the flawed assumption of endless growth in human energy consumption even as we solve the peak oil and climate change problems. You can't have your cake and eat it too.
While it's true that we can wring a very large amount of efficiency out of our residential and commercial electricity consumption, perhaps enough "to offset almost all of the projected [new] demand for electricity in 2030 and largely negate the need for new coal-fired power plants," the unavoidable message remains the same—no more growth for you!
It is ironic that an environmental externality—climate change—may be the final straw (after peak oil) driving the end of growth in fossil fuels consumption, and thus puts the breaks on total energy consumption growth generally in the 21st century. Thomas Malthus could not have imagined that.
I resigned from ASPO-USA a few weeks ago, so this is my last weekly column. I've tried to call things the way I see them since I started writing here in April, 2007. I've consistently tried to decide the questions I've written about with the best evidence I could find.
I never intended to be a futurist and admit freely that I can not predict long term outcomes with much certainty. On the other hand, the world is facing some huge problems, many of which I've never written about: degradation of the oceans, deteriorating soil quality, aquifer depletion, fresh water shortages, population growth, the current mass extinction, peak fish, and on and on—it's a long list.
I follow the rule of thumb that says strive for the best but prepare for the worst. I am a skeptic, but the world needs optimists, too. However, I can not abide a religious faith that things will just "work out" or an equally religious stance that the end of the world is nigh and we are all doomed. I still believe that Carl Sagan was right when he said that science is a "candle in the dark." We certainly need some candles, because there sure is a lot of darkness out here that needs to be lit up.
Thanks to ASPO-USA for giving me the opportunity to write this column. With that, I'll end today's story and my tenure here. Good luck.
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