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The Good News About Energy

From the July/August 2008 Issue

Despite the pessimistic headlines on energy, a beneficial long-term trend is underway called decarbonization.

In his 2005 book, The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century, writer James Howard Kunstler declared that when peak oil hits, “We will have to downscale every activity of everyday life, from farming, to schooling, to retail trade….Epidemic disease and faltering agriculture will synergize with energy scarcities to send nations reeling.” Nobel Prize winner Al Gore has said that global warming will likely result in “a string of terrible catastrophes.” And in his Academy Award–winning movie, “An Inconvenient Truth,” he implies that a warmer planet could mean that sea levels will rise by 20 feet. 

Amid this torrent of doom and gloom, there is some good news that has largely been ignored by the media: the trend toward consumption of cleaner fuels that contain less carbon. This decrease in the carbon intensity of global energy use, known as decarbonization, has been ongoing for more than two centuries and appears to be gathering speed. 

Better still, decarbonization is continuing without government mandates or subsidies. The reason for this is clear: consumers are always seeking the cleanest, densest fuels that they can get. Given a choice, most consumers would prefer cooking their dinner over a natural gas stove rather than a wood fire. Most also prefer electric lights to kerosene lanterns or candles for illuminating their homes. The reasons for these preferences are obvious: natural gas and electricity don’t pollute indoor air when they are used. 

Lower carbon fuels are lighter, more easily transported, and more flexible than their high-carbon competitors. Coal is denser, contains more energy, and is easier to handle than wood. Oil takes up half as much space as coal and can be transported easily and cheaply by pipeline. Natural gas can be used for many of the same purposes as oil, including terrestrial transportation, power generation, and space heating, but is now cheaper than oil (on a Btu basis). Plus, gas emits about half as much carbon dioxide as coal and creates far fewer air pollutants than either oil or coal. Electricity (which of course must be manufactured from coal, natural gas, oil, or uranium) is extremely flexible, is easily transported via wires, and can be switched on or off with the flick of a switch. Using carbon-based fuels like coal, oil, and natural gas to create cleaner, more ordered forms of energy like electricity provides opportunities to use evermore sophisticated tools, with computers and lasers being prime examples of this trend. 

The decarbonization of the world’s energy mix has been ongoing for centuries. From prehistory through the 1700s and early 1800s, wood was the world’s most common fuel. Wood has a carbon-to-hydrogen ratio (C:H) of 10 to 1. That is, it has about 10 carbon atoms for every hydrogen atom. But as the Western world industrialized, wood lost its dominance to coal. Coal was a dramatic improvement over wood with a C:H ratio of about 2 to 1. But coal was destined to lose out to oil, particularly for transportation, thanks to oil’s greater energy density and a C:H ratio of 1 to 2. Over the coming decades, natural gas will be the big winner, a result of its 1 to 4 C:H ratio. Thus, when compared to wood, natural gas has 40 times as many hydrogen atoms as carbon atoms. And that transition toward hydrogen has many advantages, particularly when it comes to issues like air quality and carbon dioxide emissions. 

Amid this torrent of doom, there is some good news which has largely been ignored by the media: the ongoing trend toward consumption of cleaner fuels that contain less carbon.

“The inverse of decarbonization is the ascendancy of hydrogen,” explains Jesse Ausubel, the director of the program for the human environment at Rockefeller University and one of the primary developers of the concept of decarbonization. “Think of hydrogen and carbon competing for market niche as did horses and automobiles, or audio cassettes and compact discs, except the hydrogen/carbon competition extends over 300 years.” Ausubel estimates that in 1800, carbon had 90 percent of the market, a reflection of the fact that carbon-intensive fuels like wood and coal predominated. By 1935, as oil became more prominent, carbon and hydrogen were tied in their contest for market share, with each having about 50 percent of the global energy business. By 2100, Ausubel predicts that hydrogen will command 90 percent of the global energy market, and that dominance will largely be due to the supremacy of natural gas. 

Ausubel is one of several energy forecasters who foresee a booming future for natural gas. Peter R. Odell of Rotterdam’s Erasmus University predicts that by 2100 the global gas industry will be “more than five times its size in 2000.” Further, by 2040, Odell predicts that gas consumption will overtake oil use, and by 2100 or so he expects gas to account for about 75 percent of the world’s hydrocarbon consumption. 

Of course, there are counter-indicators to the decarbonization trend. Both China and India are relying heavily on coal. For instance, in 2006 alone, China expanded its electricity generation capacity by 102 gigawatts—that’s about the same capacity as all of France’s electric power plants combined. In other words, China’s electric grid added France. And of that 102 gigawatts of new power capacity, about 90 percent was coal-fired. And depending on whose numbers you believe, the Chinese continue adding new coal-fired power plants at the rate of about one per week. 

India, the second most populous country on the planet, is emulating China’s electrification plans. By 2030, India plans to more than triple its electricity generation capacity, going from about 130 gigawatts in 2007 to about 400 gigawatts. And like China, the vast majority of that new electricity will be generated by burning coal. By 2012, India plans to add more than 46 gigawatts of new coal-fired power plants. That 46 gigawatts is approximately equal to all of the electricity generation capacity of Mexico. By 2012, India’s coal consumption is expected to jump by more than 50 percent to some 730 million tons per year. 

China and India are utilizing their domestic coal resources for a simple reason: cost. Coal is cheaper (on a Btu basis) than either oil or natural gas. But while both countries are pursuing coal in the near term, their longer-term expansion plans call for increasing use of natural gas, both in the form of domestically produced gas and in the form of imported liquefied natural gas. And as the two countries increase their gas consumption, the process of decarbonization will likely continue. 

While China and India get lots of attention, Brazil appears to be the outlier with regard to decarbonization. Ausubel’s latest research shows that carbon intensity in Brazil is actually going upward. This “carbonization” of Brazil’s economy is due to the success of Petrobras, the state-owned energy company, which over the past few years has shown remarkable prowess at finding and developing oil fields in the deep water off the Brazilian coast. That success was furthered last November when Petrobras announced that its new offshore Tupi field may hold up to 8 billion barrels of oil equivalent—one of the largest oil discoveries in the last 20 years. 

In 2006 alone, China expanded its electricity generation capacity by 102 gigawatts—that’s about the same capacity as all of France’s electric power plants combined.

So the process of decarbonization is not a smooth one. There will be hiccups along the way as various countries, particularly those in the developing world, grow their  economies and use their indigenous energy resources. Furthermore, decarbonization won’t put more oil in the ground, nor will it halt the flow of carbon dioxide into the earth’s atmosphere. But the burgeoning use of low- or no-carbon resources such as natural gas and nuclear power provide hope that peak oil will not be the calamitous event that some are predicting. And as these cleaner fuels slowly take market share away from more carbon-intensive fuels, they will help slow the rate of growth of global carbon dioxide emissions. 

Of course, no one knows for certain what concentration of atmospheric carbon dioxide is optimal. But Odell predicts that over the coming century the increasing use of natural gas “will restrain the rate of growth in anthropogenic-created emissions” of carbon dioxide by about 15 percent when compared to the emissions that would occur if current-day percentages of coal and oil consumption remained unchanged. The result of this increasing use of natural gas, predicts Odell, is that carbon dioxide emissions “in 2100 seem unlikely to be much more than twice their 2000 level.” 

While that prediction may not be pleasing to Al Gore and others who foresee a global warming catastrophe, it does present a picture of the future that is perhaps not quite so cataclysmic. Evidence of the decarbonization trend can be found by looking at the most recent edition of the BP Statistical Review of World Energy. Between 1990 and 2006, consumption of low- or no-carbon energy sources grew at faster rates than did the use of more carbon-intensive fuels. 

Between 1990 and 2006, global natural gas consumption soared by 43.8 percent to 2,586 million tons of oil equivalent, and nuclear power consumption jumped by 40.2 percent to 635 million tons of oil equivalent. During that same time period, global oil use jumped by 25.2 percent to about 3,889 million tons, and coal consumption increased by 38.1 percent to 3,090 million tons of oil equivalent. 

There’s more good news with regard to gas supplies. Back in 1970, fewer than 10 countries were producing more than 1 billion cubic feet of gas per day. By 1990 that number had risen to 25 countries, and by 2006 there were 41 countries producing at least 1 billion cubic feet of gas a day. This increasing use of natural gas is encouraging because new gas reserves are being found at a faster rate than are new oil reserves. According to BP’s numbers, between 1990 and 2006, global natural gas reserves jumped by 37.7 percent to 181 trillion cubic meters, while global oil reserves increased by just 20.7 percent to some 1.2 trillion barrels. 

Those gas reserves are likely to last longer than oil reserves. The reserves-to-production ratio for global oil reserves is 40.5. That means that at current rates of extraction, the world’s known oil reserves will be exhausted in 40.5 years. The reserves-to-production ratio for natural gas is 63.3, which means that, assuming no more gas is discovered, the world has more than 63 years of natural gas left in the ground. 

Coal dominated the 19th century. Oil dominated the 20th century. Natural gas will be the dominant fuel of the 21st century.

And those reserves will continue growing as energy companies improve the technologies that allow them to tap what’s known as “unconventional” gas. Perhaps the most important of the unconventional gas plays is called coal-bed methane, in which natural gas is collected from coal beds. Over the past two decades, coal-bed methane production has soared, and it now accounts for about 10 percent of all U.S. natural gas production. China, Russia, Canada, and Australia all have huge coal-bed methane resources, and as new technologies mature, all of those countries will develop these gas deposits. 

The renaissance of nuclear power offers another example of the trend toward decarbonization. Although the lead times and costs associated with nuclear plants are far greater than those for gas-fired power plants, the momentum behind nuclear appears to be growing. In January, the British government approved the construction of new nuclear power plants in that country as part of its effort to cut carbon dioxide emissions. In February, the Nuclear Energy Institute, an industry trade group, projected that up to eight new nuclear plants will be built in the United States by 2016. One company, NRG Energy, has already announced plans to build a new plant in Texas. In May, Italy announced that it will begin building nuclear plants within five years, reversing a 1987 public referendum. And it appears several other European Union countries will follow Italy’s example. According to the World Nuclear Association, new reactors are now being built in Argentina, Canada, China, Finland, France, India, Iran, Japan, South Korea, Pakistan, Russia, and Slovakia. Those reactors will have a combined capacity of nearly 28,000 megawatts. 

Renewable power generation is also showing huge growth. Global demand for solar panels and wind turbines is growing at double digit rates, and many analysts expect that demand to continue for the foreseeable future. Between 1990 and 2005, output from renewable energy sources such as geothermal, solar, and wind grew by 152 percent. But those numbers must be kept in perspective. By 2005, the total combined production from all of those sources amounted to less than 1 percent of global energy use, according to the Energy Information Administration. 

While the surging interest in nuclear and renewables confirms the trend toward decarbonization, it’s also abundantly clear that carbon-based fuels are not going away anytime soon. Trillions of dollars have been invested in the existing energy infrastructure, which provides consumers with electricity, gasoline, jet fuel, and myriad other commodities. Changing that infrastructure—nearly all of which has been built to harness carbon-based fossil fuels—to a system dominated by renewable and alternative energy sources will take many decades. 

Nevertheless, a beneficial and largely unambiguous trend is clear. Wood dominated the global energy scene through the 18th century. Coal dominated the 19th century. Oil dominated the 20th century. Natural gas will be the dominant fuel of the 21st century. And that’s good news. Just don’t expect to read about it in the newspaper. 

Robert Bryce is the managing editor of Energy Tribune magazine. His latest book is “Gusher of Lies: The Dangerous Delusions of ‘Energy Independence.’”

Illustrations by John Hersey.

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