Energy Transition - A Realistic Viewpoint
Published: Daily Oil Bulletin
Every day we see breathless articles about the emerging Energy Transition — the change from today’s hydrocarbon-dominated energy economy to a future where renewables and other low-emission technologies will power our world. Goals are being set to be “carbon neutral” or “100 per cent renewable” by 2050, 2040, or even sooner.
Living in a city where it has taken more than 20 years to build a simple ring road, it seems rather bizarre that people assume we can restructure global energy supplies in less time.
That said, these ambitions have spurred tremendous innovation and investment in alternative energy sources and associated infrastructure like grid configurations and storage. But a distressing number of people and organizations have taken the carbon-neutral ambition as a call to destroy the oil and gas industry before cheaper, better energy supplies are available to replace it.
Just about every significant material advance in the history of humanity has been driven by new, better, and/or cheaper technology. For example, we stopped hunting whales for their oil because petroleum-derived products were better. So how is today’s literally destructive approach to the oil industry going to play out?
Firstly, let’s affirm some basic facts. Citizens of developed nations live lifestyles sustained by abundant, cheap energy. Most are not reducing their energy demand, instead buying more large vehicles and taking more foreign vacations. And most have no intention of spending any significant number of their own dollars to save energy.
Meanwhile, people in the developing world want that same high-energy lifestyle, as quickly and cheaply as possible. They need, right now, a variety of new energy sources best suited to their situations and budgets. In densely-populated Asia, that means building coal- and hydrocarbon-fired electrical generation and buying oil-powered vehicles. They are adding wind and solar, too, but existing renewables technology is not adequate to meet more than a fraction of their needs
So total world energy demand is rising dramatically, and will do so long into the future.
Proponents of RET (Rapid Energy Transition) say we can create massive new renewable energy resources to meet rising energy demand and to displace coal and hydrocarbons. International Renewable Energy Agency’s (IRENA) Renewable Energy Roadmap “highlights a vision for a global energy pathway to 2050” to decarbonize the energy system in line with the Paris Agreement. Rocky Mountain Institute (RMI) says “it is technically possible to decarbonize … the Chinese economy by mid-century.” DNV GL is a little less optimistic, forecasting that fossil fuels will provide only 56 per cent of total energy by 2050 (as opposed to 81 per cent today), but only if world energy demand peaks by 2030 and falls thereafter.
All express visions in very broad strokes about how RET can happen — adding immense capacity for solar, wind and biomass generation, building huge new energy storage, converting everyone to electric vehicles — but none have developed any pathways to actually attain their objectives. As well, most RET proponents don’t like nuclear power, nor do they see a role for carbon capture and storage (CCS) to offset emissions. So how do we accomplish these wonderful goals?
Shell’s Sky Scenario analyzes energy transition more realistically, seeing the potential to sharply reduce emissions by 2070, relying heavily on CCS and nuclear. However, even Shell does not attempt to map pathways, and cautions that success will take huge effort and expense.
Even on a more local basis, despite government “commitments” to completely de-carbonize the electrical grid or ban oil-powered vehicles in the near future, nobody has demonstrated how this might happen, anywhere.
- Environment and Climate Change Canada’s Pan-Canadian Framework for Emissions Reductions talks about renewables growth and other strategies, but does not even attempt to lay out a roadmap or metrics for success. One analyst has suggested that to meet their goals, we would need more than 100 new Site C hydro dams and more than 100 new nuclear reactors by 2050. That’s not going to happen.
- Hawaiian Electric Co. has created a conceptual roadmap to transition to 100 per cent renewable electricity generation by 2045 (from 28 per cent today). Their plan is ambitious but may be attainable, with several projects underway. However, it addresses electrical generation only (not transportation), in a place with little heavy industry, no need for space heating, and some of the most consistent and high-quality solar and wind potential in the world. If Hawaii needs another 25 years, how can other jurisdictions hope to transition more quickly?
- An excellent new blog by Capriole Energy takes a hard look at Ireland’s ambitions to reduce emissions (including an announced ban on gas and diesel vehicles from 2030). Capriole demonstrates that massive amounts of work need to be done over a time period far longer than 10 years, and concludes by stating “the only alternative to [being dependent on oil beyond 2050] is … vastly reduced personal mobility and a hugely diminished desire for goods transported from afar.”
All this underscores the conclusion reached by distinguished Energy Transition scholar Vaclav Smil that “the unfolding energy transition toward decarbonization will inevitably follow the progress of all previous large-scale primary energy shifts — it will be a gradual, prolonged affair.”
So what does a realistic view of the 21st century Energy Transition look like? In two words: complicated and prolonged. Different regions will employ different mechanisms — as they do today — based on the natural assets and markets available to them, complicated by the same variety of local, provincial, federal, First Nations, and other interests that exist around today’s energy systems. We need thoughtful informed pathways to Energy Transition that respect the available resources, advantages, and limitations — and we need different jurisdictions to agree on how to implement these pathways efficiently.
Right now, much of the developed world is engaged in experiments, building and testing new renewable energy sources — different things in different places. Governments are experimenting with how to integrate new sources into electricity grids, and many of these experiments have been painful and costly, as ratepayers in Ontario and California will agree. Advances in energy storage are being made, but the best technology today can only help to level intermittent renewables, and perhaps carry a few consumers through a couple of hours. Other transition experiments — like electric vehicles and alternative transportation strategies — are similarly in the early experimental stages.
So I’ll say it again: we are decades away from transitioning from an economy supported by fossil fuels to something else. In the meantime, we will need oil and gas (and coal) everywhere, all the time, for at least the lifetime of every adult today. Given the political pressures and financial turmoil faced by the oil and gas industry, however, we are far more likely to see oil shortages and price spikes in the next few years than we are to see oil and gas fade into the sunset.