The World in 2050: Four Forces Shaping Civilization's Northern Future - Laurence C. Smith (2010)
Part I. THE PUSH
Chapter 3. Iron, Oil, and Wind
All I wanna do is to thank you
Even though I don’t know who you are
You let me change lanes
While I was driving in my car
—Lyrics from “Whoever You Are” by Geggy Tah (1996)
I nose my compact SUV out of traffic and into the Mobil gas station at Cahuenga Pass, just off the 101 Freeway in Los Angeles. Perched high above me atop the Santa Monica Mountains are the enormous white letters of the Hollywood sign. The nine letters gleam out proudly over a booming young megacity that barely existed a century ago.
I find an open pump and hop out of the car. I swipe a credit card and tap in my ZIP code. I choose a fuel grade, lift the pump handle from its cradle, and jam it into the tank’s orifice. I squeeze the pump’s handgrip and feel its metal grow cold as fuel churns from another tank in the ground beneath me to the one in my car. It is a simple, mindless act I have repeated countless times since I was seventeen years old. I give no more thought to the process than I do to washing my hands or drinking a glass of orange juice. But I really should be more appreciative. In L.A. the elixir of life isn’t Botox: It’s gasoline.
The average man must labor for ten hours a day, for two solid months, to perform as much physical work as one gallon of crude oil. No wonder we’ve abandoned horses and carriages in favor of oil-powered vehicles. This raw material, from which all gasolines, diesels, and jet fuels are refined, is miraculous stuff. It fuels 99% of all motorized vehicles today. And oil is so much more than just a transport fuel—it is an essential ingredient of nearly everything we make. Our plastics, lubricants, cosmetics, pharmaceuticals, and millions of other products all derive somehow from oil. Our food is grown with oil. So besides what I was pumping into my gas tank, I was sitting in oil while driving and was drinking oil as I sipped coffee from my cup.
Since the Industrial Revolution oil, coal, natural gas, and metals have improved nearly every aspect of human life. Before then, a meager existence was the norm no matter what country one lived in. It is naïve to romanticize the eighteenth century as simpler, happier times—the lives of those farmers and townspeople were a constant struggle. Without fossil fuels and metals our lives would be very different. Indeed, today’s urbanization megatrend and gigantic cities would not even exist.
The modern city survives upon constant resupply from the outer natural world, from faraway fields, forests, mines, streams, and wells. We scour the planet for hydrocarbons and deliver them to power plants to zap electricity over miles of metal wire. We take water from flowing rivers with distant headwaters of snow and ice. Plants and animals are grown someplace else, killed, and delivered for us to eat. Wind, rivers, and tides flush out our filth. Without this constant flow of nature pouring into our cities, we would all have to disperse, or die.
This reliance of cities upon the outside natural world is a profound relationship to which their occupants give little if any thought. Unlike a hardscrabble Uzbek farmer, modern urbanites worry little about securing water and food, and instead focus on securing jobs and wealth. But a lack of awareness doesn’t make this dependency any less profound. Swedish cities, for example, import at least twenty-two tons of fossil fuel, water, and minerals per person annually.91 In a single year Portugal’s growing city of Lisbon gobbles some 11,200,000 tons of material (things like food, gas, and cement) but excretes just 2,297,000 million tons (things like sewage, air pollution, and trash).92That’s twenty tons coming in and only four going out for every one of Lisbon’s 560,000 residents. The difference—nearly nine million tons—stays in Lisbon, mostly in the form of added buildings and landfills. So not only do cities feed on their outside natural resource base, they retain and grow from it.93
Clearly then, our global rush to urbanize does not mean giving the natural world a break. As we saw in the previous chapter, when people move to modern cities, consumption goes up, not down. And cities import all sorts of materials besides food, water, and consumer goods. Roads, buildings, and power plants require serious tonnage of steel, chemicals, wood, water, and hydrocarbons. Even in rural areas, the departing farmers are being replaced by tractors and petrochemicals.94
As described in the last two chapters, the developing world will experience extraordinary urban and economic growth over the next forty years. What does this portend for our third global force, demand for natural resources? Do we face oil wars and crazy steel prices? Stump forests and dried-up water wells? Are we about to run out of the raw materials our cities and mechanized farmlands so desperately need?
Are We Running Out of Resources?
The debate over natural resources, and whether we are running out of them, is a contentious and surprisingly ancient debate. Even Aristotle wrote about it. In 1798 Thomas Malthus’ first edition of An Essay on the Principle of Population argued that the exponential growth of human population, set against the arithmetic growth in the area of arable land, must ultimately lead us to outstrip our food supply, thus inevitably dragging us toward a brutal world of famines and violence.95 Among Malthus’ more odious ideas was that social programs are pointless because they enable poor people to have more babies, thus making the problem worse.
Not surprisingly, Malthus’ ideas angered many people in his day and since. John Stuart Mill, Karl Marx, Friedrich Engels, and Vladimir Ilyich Lenin were among his vocal critics, mostly retorting that social inequity, not resource scarcity, is the root cause of human suffering. More than two centuries after the publication of this slim book the battle rages on, pitching modern-day “neo-Malthusians” like Stanford’s Paul Ehrlich against opponents like the late Julian Simon at the University of Illinois.96 The debate has now expanded well beyond food production to include all manner of natural resources. 97
To enter this debate it is simplest to start off with finite, nonrenewable raw commodities that are essential to modern human enterprise, like metals and fossil hydrocarbons (we will take up water, food, and renewable hydrocarbons later). Are we running out?
Let us tabulate estimates of known geological deposits that we have already discovered and know to be of sufficiently high grade that they could be profitably developed tomorrow if necessary. These quantities are called proved reserves, or simply reserves. It is then a simple calculation to divide the world’s total reserves by their current rate of depletion (i.e., their annual production rate) to see how many years are left until the remaining reserves run out. This simple measure is called the “R/P” (reserve-to-production) ratio or the “life-index” of a resource. On the following page are some examples of global proved reserves (both in total and per capita) and R/P ratios for twenty-two of the Earth’s especially useful nonrenewable resources.
Two observations leap from these data. The first is that the absolute abundance of a reserve is not always a good predictor of when it might be depleted. The current world reserve of oil—despite being the second-largest at nearly two hundred billion metric tons (about twenty-four metric tons for every man, woman, and child alive on Earth)—is scheduled to run out in just 42 years at current production rates, whereas the supply of magnesium would appear to last for 4,481 more years, despite having only 1/75th the abundance of oil. Platinum would appear to have 150 years left despite being more than two million times scarcer (just 100 grams for every man, woman, and child).
The second observation is that there is an enormous range in R/P ratios, with some reserves projected to be exhausted as soon as eight years from now and others not for hundreds or even thousands of years. The known proved reserves of magnesium, for example, appear sufficient to carry us to the year 6491 at today’s rate of consumption. Interestingly, commodity prices do not necessarily reflect this. For example, one can buy silver and lead much more cheaply than platinum, despite their having shorter index lifetimes.
Proved World Reserves of Some Important Natural Resources
(Sources: PB 2008; British Geological Survey 2005)98
Why is this? Can the markets be wrong? Before you rush off to hoard lead ingots, note that there are serious flaws with the use of this simple “fixed-stock” approach to project future resource scarcity. An obvious one is that not all “nonrenewable” resources are irreparably destroyed when used, meaning they can be recycled. This is particularly true for metals. Lead and aluminum are highly recycled today, for example. A second flaw is that the size of proved reserves is not truly fixed but tends to rise over time as new deposits are found, extraction technologies improve, and commodity prices go up. The latter can make a low-grade deposit become economically viable, thus adding it to the list of proved reserves despite no new geological discoveries whatsoever. And to an economist, a big problem with the R/P ratio is its implicit assumption that the cost of production for all those tons is equal around the world, when we know that is not the case.
In principle there is sufficient aluminum, iron, zinc, and copper within the Earth’s crust to last humanity for millions of years, if we had the energy and technology and desire to extract such dilute materials and didn’t object to mining away vast portions of the planet from beneath our feet. Mineral “depletion,” at least in the strictly physical sense, is thus meaningless.99,100 The better question, therefore, is not “will we run out of aluminum?” but “to what lengths will we go to get it?”
The above flaws—ignoring recycling, and the tendency for proved reserves to increase over time with advancing prices, technology, and new discoveries—make R/P life-index calculations, like the ones tabled on the previous page, overly pessimistic. However, two other factors tend to make them overly rosy. The first is that governments or companies holding a resource sometimes find it in their best interest to be optimistic when assessing the size of their proved reserves. This is particularly true for oil and is a serious concern with Saudi Arabia, currently the world’s largest oil producer. 101 The second problem with life-index calculations is that they imply today’s rate of consumption will remain fixed into the future. As we saw in the previous chapter, enormous growth in the global economy and population is projected for developing countries. Resource consumption is expected to rise right along with them, thus making life-index projections too short. In light of these weaknesses, R/P life-index values are best used for illustrating the present-day situation, rather than for making projections into the future.
A more sophisticated approach is to link resource consumption to GDP or some other economic indicator, thus allowing it to rise with projected economic growth. Model studies that add this extra step all indicate serious depletion of in-ground reserves of certain key metals, notably silver, gold, indium, tin, lead, zinc, and possibly copper, by the year 2050.102 Pressure is also rising on some other exotic metals (besides indium) needed by the electronics and energy industries, notably gallium and germanium for electronics; tellurium for solar power; thorium for next-generation nuclear reactors; molybdenum and cobalt for catalysts; and niobium, tantalum, and tungsten for making hardened synthetic materials. Clearly, we are transitioning toward a world where some industrial metals will become either geologically rare and increasingly recycled, or abandoned altogether in favor of cheaper, man-made substitutes.103 So while physical mineral depletion won’t happen soon—and we will see it coming if it does—perhaps you might stash away a little silver and zinc after all. They could well bring you a tidy payback in forty years’ time.
What About Oil?
Much less ambiguous is the long-term outlook for conventional oil. Conventional means oil in the traditional sense: a low-viscosity liquid that is relatively easy to pump from the ground.104 Unlike metals, oil cannot be recycled because we burn about 70% of every barrel as transportation fuel. And unlike metal ores, which are diffused in varying grades throughout the Earth’s crust, conventional oil is a pure liquid and found only in a narrow range of geological settings. Therefore, after a new oil field is first developed, over the course of several decades its production will inevitably rise, peak at some maximum, and then decline. This sequence is normal and predictable and observed in all oil fields ever drilled on Earth.105
For over one hundred years the United States was the world’s dominant oil producer. Then, in October 1970. its domestic production peaked at just over ten million barrels per day—about the same as Saudi Arabia’s production today—before beginning to fall.
American oil companies launched an epic search to find new domestic reserves. Within ten years the United States was drilling four times as many wells as during the peak, but its production still dropped anyway—to 8.5 million barrels per day and falling. By December 2009 it was down to just 5.3 million barrels per day.106 So much for “drill, baby, drill” as the solution to energy supply problems.
This story is not unique to America. Azerbaijan’s Baku oil fields—once Russia’s biggest supplier and the target of Adolf Hitler’s eastern front invasion in World War II—are now mostly empty except for littered hulks of rusting junk. Venezuela’s enormous Lake Maracaibo Basin is in decline. Iran’s oil production peaked in 1978 and now produces barely half the six million barrels per day that it did then.
Most of the world’s oil still comes from giant and supergiant oil fields discovered more than fifty years ago. Many of them have now begun their decline, including Alaska’s North Slope region, Kuwait’s Burgan oil field, the North Sea, and Canterell in Mexico. Saudi Arabia is so far maintaining production from its massive Ghawar field—currently providing over 6% of the world’s oil—but eventually it, too, must decline. 107
A common debate, which to me is not a very interesting one, is whether world production of conventional oil has “peaked” already or whether that day still lies ahead—say in thirty or forty years. Beyond that time window, the chances of finding huge new discoveries of conventional oil—of sizes needed to maintain even our current rate of oil consumption, let alone meet projected growth in demand—grow dim. New oil is still being found, and exploration and extraction technologies continue to improve, but it is now quite clear that conventional oil production cannot grow fast enough to keep up with projected increases in demand over the next forty years.
The reasons for this go even beyond geological scarcity to include “above-ground” challenges in geopolitics, infrastructure, environmental protection, and an aging industry workforce. Many of the fields awaiting development are in parts of the Caucasus and Africa that are dangerously unstable.108 It takes decades and enormous investments of capital to develop an oil field, and will cost increasingly more in blood and treasure than energy investors are accustomed to. Further supply tightening derives from the fact that oil producers have a long-term financial incentive in limiting production of what is, after all, a finite resource. A large fraction of the world’s oil is now controlled by national rather than transnational oil companies. These companies, notes former U.S. secretary of energy Samuel Bodman, are beginning to wonder why they should produce now, when the same oil could make them even more money in the future. 109
The world currently consumes some 85 million barrels of oil every day and is forecast to demand 106 million barrels per day by 2030, despite the 2008-09 economic contraction and the creation of new government policies encouraging alternative energy sources.110 To meet this demand, as another former U.S. secretary of energy, James Schlesinger, recently noted, means that we must find and develop the equivalent of nine Saudi Arabias. The probability of this happening is vanishingly small.
Even if total world oil production can be increased, if production cannot keep up with demand, that is still a supply decline. Disturbing twenty-first-century scenarios of intense competition for oil—even to the point of economic collapse and violent warfare—are described in the books Out of Gas by David Goodstein, Resource Wars and Rising Powers, Shrinking Planet: The New Geopolitics of Energy by Michael Klare, and Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy by Matt Simmons.111 These authors are neither hacks nor alarmists. Simmons is a lifelong Republican and oil industry insider, and is widely respected as one of the smartest data analysts in the business. Goodstein is a Caltech physicist, and Klare has long experience in military policy. “Of all the resources discussed in this book,” writes Klare in Resource Wars, “none is more likely to provoke conflict between states in the twenty-first century than oil.” There is ample empirical evidence to support this, including the 2003 U.S. invasion of Iraq and a 2008 war between Russia and Georgia over South Ossetia, a breakaway republic proximate to a highly strategic transport corridor for Caspian oil and gas. A struggle for control of Sudan’s south-central oil fields has contributed to ongoing unrest in a country that has seen perhaps three hundred thousand people killed and two million more displaced since 2003.
It’s true that we’re always just one borehole away from a huge new oil discovery. But realistically speaking, despite great leaps forward in geophysical exploration technology, we stopped finding those about fifty years ago. All of the world’s supergiant fields still producing significantly today were discovered in the late 1960s. World production is still rising, but to achieve it we are expending many times the effort to find fewer and smaller pockets of oil. To make matters worse, not only do these smaller fields hold less to begin with, they also decline more precipitously than big fields after they’ve peaked.112 According to Simmons’ research in Twilight in the Desert, a far more likely scenario than a big find is a big crash in the Middle East—home to two-thirds of the world’s conventional oil supply—brought on by years of overstatement about the size of Saudi reserves.
Also more likely than a giant new find are supply problems with the reserves we have already. There are plenty of geopolitical problems with oil besides the nationalization trend described earlier. All oil-importing countries worry incessantly about supply disruptions and vulnerabilities. Oil infrastructure is under constant threat from oil spills and terrorism, for example, at Saudi Arabia’s Abqaia facility, where Saudi forces thwarted an Al Qaeda attack in 2007.113 More than two-thirds of all the oil shipped in the world passes through the heavily militarized bottlenecks of the Strait of Hormuz or the Strait of Malacca. When prices hit one hundred dollars a barrel, the United States sends roughly a half-trillion dollars per year to oil-producing countries—including political foes like Venezuela—just to secure its transportation fuel. Few would dispute that securing stable access to oil supplies is a driving force behind U.S.-led military actions in the Middle East.
In light of all this, world leaders, financial markets, and even oil companies have already decided that it’s time to add other options to the energy basket. They know the world is entering a time of unprecedented energy demand just as our great oil fields are aging and new ones are harder to find and more expensive to tap. Future production will increasingly come from new discoveries that are smaller, deeper, and riskier; the remnants of depleted giants; and unconventional sources like tar sands. It seems probable that the world will eventually begin regulating carbon emissions one way or another, at least by a token amount. For all of these reasons the cost of using oil—regardless of geological supply—is expected to rise.
Obviously, energy conservation measures are the cheapest and most immediate way to soften this blow, and will comprise a key part of its solution. But however we end up feeding our vehicles in 2050, it won’t be the same as how we did it back in 2010. We are moving from a narrow fossil-fuel economy to something much more diverse—and likely safer and more resilient—than what we have today. We will explore this exciting range of possible energy futures next.
“You got five minutes?”
It was two o’clock in the afternoon and my weight-lifting neighbor, whose hobby is driving racing cars, was standing at my front door. He was grinning fiendishly.
Moments later, my happy excitement had curdled to pure adrenaline and fear and the feeling that I was about to die. My neighbor tapped the accelerator and there again was that terrifying sensation of heart and lungs being pressed against the back of my chest cavity. My body sank into the open-air cockpit, inches above the mountain curves of Mulholland Drive, as the Tesla Roadster screamed silently around them at ninety miles an hour. Flower-fragrant Southern California air pushed up my nose. Smells like a funeral, I thought weakly, and gripped the windshield frame harder. Someone was howling, probably me. I was trapped in the fastest roller coaster of my life and there were no rails pinning it to the ground.
It felt like an hour, but true to his word, my maniac neighbor had me back home safely in five minutes. He was on his way to Universal Studios to give the CEO a ride. The day before, it had been Anthony Kiedis, lead singer of the Red Hot Chili Peppers. “Faster than a Ferrari from thirty to sixty, and just two cents a mile!” he said, beaming and waving as he drove off. I wandered inside, collapsed on my couch, and wondered if I might be having a heart attack. That’s when I realized that electric cars weren’t just for eco-pansies anymore.
It is rapidly becoming obvious that plug-in electric cars will be the great bridging technology between the cars of today and the cars of a hydrogen fuel-cell economy later this century (should there be one114). Plug-ins differ from conventional cars and hybrids (like the Toyota Prius, first sold in Japan in 1997) because they are powered mainly or exclusively from the electric grid, not by gasoline. And because plug-ins emit very little tailpipe exhaust (zero for fully electric cars with no hybrid conventional motor), that means urban air quality is about to become cleaner.
One of the biggest reasons to be happy about the phase-in of plug-in electric cars has less to with solving climate change or reducing dependency on foreign oil, and more to do with quality of life for all those new city people. Take, for example, my home. It’s only a thousand square feet in size, with one bedroom and one bath, but my wife and I love it. It clings to the Hollywood Hills, high above everything, with sweeping views of the downtown Los Angeles skyline and beyond. Every morning one of the first things I do is step out on the deck to check out the view. It’s usually crummy, the skyscrapers and distant mountains obscured by the orange-stained smog of ten million belching tailpipes. But on good days, when winds clear out the fumes, we win a breathtaking vista spanning over fifty miles, from blue ocean in the west to snow-covered peaks in the east. It’s stunning, and I’m looking forward to those rare views becoming downright ordinary over the next forty years. The public health benefits of this are obvious. Today, as a resident of Los Angeles, I suffer a 25%-30% higher chance of dying from a respiratory disease than my parents, who live on the Great Plains.115
This is not to suggest that electric cars are environmentally benign, because they aren’t. All of that new electricity must come from somewhere, and for the foreseeable future it will mostly come from power plants burning coal and natural gas. And while the vehicles themselves emit virtually no pollution, these power plants do. 116 Producing millions of electric batteries also requires mining huge volumes of nickel, lithium, and cobalt. There are many technology hurdles remaining with battery lifetime, disposal, and price. Mileage rates are improving (the Chevrolet Volt goes 40 miles, the Tesla 244 miles as of 2010) but still well below the range of a conventional car. Recharging takes several hours unless a system of battery-exchange service stations can be set up. For these reasons and others most first-generation plug-in electrics will likely be hybrids, with a small gasoline or diesel motor that kicks in when the battery range is exceeded. To the extent that they are driven beyond this range, cars will continue to emit pollution and greenhouse gas from their tailpipes.
There is also the “liquid-fuels” problem: Not all transport can be electrified. There is no foreseeable battery on the horizon that will power airplanes, helicopters, freight ships, long-haul trucks, and emergency generators. These all require the power, extended range, or portability offered by liquid fuels. For these forms of transport, gasoline, diesel, ethanol, biodiesel, liquefied natural gas, or coal-derived syngas will be necessary for decades. However, electrification of the passenger vehicle fleet will help ensure adequate supplies of these liquid fuels. And perhaps one day, our descendants will be grateful that we left them enough oil to still make plastic affordable.
So peering forward to 2050, we find a world more heavily electrified than today, and an assortment of strange new liquid fuels. Where will these new energy sources come from? Will clean renewable electricity replace hydrocarbon-burning power plants? And what about hydrogen power, the fuel of space ships, sci-fi movies, and Arnold Schwarzenegger’s specially designed Humvee?
Let’s start with the last. First, it is important to remember hydrogen is not truly an energy source but, like electricity, an energy carrier. Pure hydrogen makes a wonderful fuel but isn’t just lying around for the taking.117 Instead, just like making electricity, it must be generated using energy from some other source.118 A feedstock material is also needed from which to strip hydrogen atoms. The most common feedstocks in use today are natural gas or water, but others, like coal or biomass, are also feasible sources of hydrogen. Energy is used to crack the hydrogen from the feedstock—for example through electrolysis of water119—yielding a portable fuel in gas or liquid form. One kilogram is packed with about the same energy as a gallon of gasoline.
But unlike gasoline, the hydrogen is not then burned in a combustion engine. It is instead converted to electricity on-site, by feeding it into a fuel cell. Fuel cells essentially reverse the hydrolysis reaction, combining hydrogen with oxygen to create electricity and water. The newly made electricity is then used to power the car, appliance, furnace, or whatever, with the water by-product either released as vapor or recycled. Like plug-in electrics, fuel-cell cars release no tailpipe pollution or greenhouse gases (besides water vapor120). However, they are released at the hydrogen plant, unless fossil fuels or biomass can be avoided as sources of energy or feedstocks. In principle, solar, wind, or hydroelectric power could be used to split hydrogen from a water feedstock, making the entire process quite pollution-free from beginning to end.
Sounds wonderful, and many energy experts and futurists believe that one day we will have a full-blown hydrogen economy. The ultimate dream is to use solar energy to split hydrogen from seawater, thus providing the world with an infinite supply of clean hydrogen fuel—and even some freshwater as a bonus—with no air pollution or greenhouse gases. But nothing like that will be in place by 2050.
Years of research are needed to resolve a rat’s nest of challenges concealed within the previous two paragraphs, with major technology advances and cost reductions necessary in all areas.121 Basic research in hydrogen manufacture, transport, and fuel cells is still lacking. The cost of making a fuel-cell vehicle is extremely high. A completely new physical infrastructure is required, including manufacturing plants, pipelines, distribution and bottling centers, and filling stations. Hydrogen is explosive, so there are many safety issues to be resolved, like how to safely pack enough of it into a vehicle to drive three hundred miles, comparable to vehicles today. One way is to use highly pressurized hydrogen, but the collision safety of ten-thousand-psi tanks remains unproven. Early hydrogen supplies are all but certain to be made from fossil fuels, and thus will help little with reducing carbon emissions.
In light of these challenges, most experts agree that a hydrogen economy lies at least thirty to forty years in the future, at which point hydrogen fuel-cell cars might possibly be the new “next-generation” technology that plug-in hybrids are today. Under the conservative ground rules of our thought experiment, we will assume the world will not convert to a hydrogen economy by the year 2050.
Running on Moonshine and Wood
Unlike hydrogen, biofuels offer a quicker solution to the liquid-fuels problem. Like gasoline, they are refined hydrocarbons that are burned in an internal combustion engine. They use the same filling stations and, with only slight modifications, the same car and truck engines of today.122 The only real difference between biofuels and current fuels is that they are made from contemporary organic matter rather than ancient organic matter, and are somewhat cleaner. They emit similar levels of carbon dioxide from the tailpipe as gasoline or diesel, but fewer sulfur oxides and particulates. In principle, when biofuel crops grow back they draw down a comparable amount of new carbon from the atmosphere, thus offsetting their emission of greenhouse gas, but this does not take into account the added emissions of growing, harvesting, and transporting the crop. The biggest appeal of biofuels, therefore, is that they offer a domestic or alternative liquid-fuel source to oil, and potentially less greenhouse gas emission, depending on how efficiently the biofuel can be produced.
The most common biofuel today is ethanol made from corn (in the United States), sugarcane (Brazil), and sugar beets (European Union). Making ethanol is essentially the ancient art of fermenting sugars to make alcoholic drinks, meaning that corn-based car fuel is very similar to moonshine. It is commonly mixed with gasoline, and in Brazil, cars run on flex-fuel mixtures containing up to 100% ethanol. Ethanol has higher octane than gasoline and for this reason was used in early racing cars. In fact, when cars were first being developed about a century ago, their makers strongly considered fueling them with ethanol. 123
The world’s two largest ethanol producers are the United States and Brazil, together producing more than ten billion gallons per year. That may sound like a lot, but it’s less than 1% of the liquid-fuels market. The good news is that Brazil is becoming quite expert at making sugarcane ethanol. Production is rising rapidly and is expected to double by 2015. 124 Sugarcane plantations are expanding and, contrary to popular belief, represent little deforestation threat to Amazon rain forests because they are found mostly in the south and east of Brazil.125 Improved agricultural practices have more than doubled the ethanol yield per unit area, and new genetic methods called marker-assisted breeding suggest further increases of up to 30% in the future. The price Brazilians pay for ethanol has steadily fallen for the past twenty-five years even as the price paid for gasoline has gone up.126 In 2008, for the first time in history, Brazilians bought more ethanol than gasoline. 127
The United States is also ramping up ethanol production. The 2007 Energy Independence and Security Act calls for a tripling of U.S. corn-based ethanol production by 2022, a goal reaffirmed by the Obama administration in 2010. Ethanol also comprises a large part of the U.S. Department of Energy’s official goal to replace 30% of gasoline consumption with biofuels by 2030. The European Union hopes to derive a quarter of its transport fuels from biofuels by the same year. 128
Unfortunately, there are tremendous differences in production efficiency among the different plant crops used to make ethanol. Sugarcane is a high-value feedstock, yielding up to eight to ten times the amount of fossil-fuel energy needed to grow, harvest, and refine sugarcane into ethanol. Corn-based ethanol, in contrast, is terribly inefficient, usually requiring as much or more fossil fuel in its manufacture as is delivered by the final product. Therefore the greenhouse gas benefit of corn ethanol over oil is negligible.129 While often pitched otherwise, American subsidies for it are for objectives other than greenhouse gas reduction. For that goal, a far smarter biofuel investment would be production of sugarcane ethanol in the Caribbean, a potential “Middle East” for ethanol export to the United States.130
Another problem is that current technology requires ethanol to be made from simple sugars and starches, putting biofuel crops in direct competition with food crops. The U.S. corn ethanol program was widely blamed in 2007 for a worldwide rise in food prices, because it subsidized farmers to plant fields with corn for fuel rather than with wheat and soybeans for food.131 This notion that biofuels threaten global food supply reared up again in 2008 in response to a series of food riots in Haiti.132 While this fear is probably overblown—the share of arable land currently used for biofuel production is only a few percent, and geographic models indicate adequate land does exist for the coexistence of energy and food crops133—it is nonetheless disturbing to imagine, in a 2050 world with half again more people than today, converting large swaths of prime farmland to feed cars instead of people.
An attractive alternative would be making ethanol from cellulose, extracted from low-value waste and woody material. Indeed, to make sense any large-scale conversion to biofuels must include cellulosic technology. 134Cellulose is found in waste products like sawdust and cornstalks, or in grasses and woody shrubs that grow on marginal land not suitable for food crops. It is also the only way to achieve large greenhouse gas reduction through biofuels: Because cellulose requires little or no mechanical cultivation, fertilizers, or pesticides, the amount of fossil fuel needed to produce it is greatly diminished.
At the moment, we do not yet have the technology to produce cellulosic ethanol at sufficiently low price and large scale to penetrate the liquid-fuels market. Woody material contains lignin, a tough polymer that surrounds the cellulose to strengthen and protect the plant. Lignin prevents enzymes from reaching the cellulose to break it down to sugars that can then be converted to ethanol. Current methods for doing this require strong acids or high temperatures, making them uneconomic. But cows and termites, through a symbiotic relationship with gut bacteria, have no problem breaking down cellulose, and promising research is under way to discover how we can too.135Another potential source of liquid biofuels is algae (e.g., algenol), which can be grown in non-agricultural, non-forest places like deserts, potentially even from wastewater and seawater.
Whether from increased competition with food crops, or the harvesting of brush and wood for cellulose, a downside of all biofuels is a pressure to expand cultivation, putting even more pressure on natural habitats. Because they consume so much land area, biofuels have the largest “ecological footprint” of any energy source including fossil fuels.136 Another challenge is purely logistical. Most plant biomass is dispersed over the landscape. How will we secure enough of it, and deliver it to plants at a reasonable cost, without also burning large amounts of fuel in the process? In an echo of hydrogen, this lack of broad-scale processing infrastructure thus remains an open challenge to major production of liquid biofuels.
Of the nonfossil fuel sources of energy, biomass is the world’s most important source today, accounting for around 9%-10% of total primary energy consumption. Most of this comes from burning wood and dung for heating and cooking in developing countries. While less than 1% of the world’s electricity production comes from biomass, its role is expected to grow across all energy sectors in the next forty years, with total biomass consumption rising 50%-300% by the year 2050. 137 Sugarcane ethanol is already a success, and most experts feel that an economically viable cellulosic technology will be found. If the described challenges to agriculture, land management, and infrastructure can be met, biofuels could possibly supply up to a quarter of all liquid transport fuels by 2050.138 But this is no small task: With world population growing another 50% over the same period, it means tripling our current agricultural productivity. Total bioenergy use in 2050 would have to approach the level of world oil consumption today.
Was Jack Lemmon’s Oscar a Setback for the United States?
On March 16, 1979, the movie thriller The China Syndrome opened, starring Jack Lemmon, Michael Douglas, and Jane Fonda. It was about a nuclear accident, compounded by a series of human blunders and criminal acts, at a fictional nuclear power plant in California. By sheer coincidence, just twelve days later a nuclear reactor core was seriously damaged at the Three Mile Island power plant near Harrisburg, Pennsylvania. The level of radioactivity leaked into the environment was too low to harm anyone, but the accident’s timing was uncanny. The real accident, although quickly contained, brought immediate attention to the film and it became a box-office smash.
Jack Lemmon won an Academy Award for his performance as the distraught plant manager who barricades himself inside the control room to prevent a criminal cover-up by the plant’s owners. I won’t spoil the ending, but the story remains gripping to this day. The China Syndrome horrified an audience of millions and, together with the accident at Three Mile Island, helped to turn the court of U.S. public opinion against nuclear energy. The last year that a construction permit for a new nuclear power plant was issued in the United States was 1979.139
Then, a second, far more deadly catastrophe occurred. On April 26, 1986, nuclear reactor unit No. 4 exploded at the Chernobyl power plant in Ukraine, then part of the Soviet Union. The blast and consequent fire that burned for days released a radioactive cloud detected across much of Europe, with the fallout concentrated in Belarus, Ukraine, and Russia. Two people were killed in the plant explosion, and twenty-eight emergency workers died from acute radiation poisoning. About five million people were exposed to some level of radiation.
Soviet officials initially downplayed the accident. It took eighteen days for then-general secretary Mikhail Gorbachev to acknowledge the disaster on Soviet television, but he had already mobilized a massive response. Soviet helicopters dropped more than five thousand tons of sand, clay, lead, and other materials on the reactor’s burning core to smother the flames. Approximately 50,000 residents were evacuated from the nearby town of Pripyat, still abandoned today with many personal belongings lying where they were left. Some 116,000 people were relocated in 1986, followed by a further 220,000 in subsequent years. Approximately 350,000 emergency workers came to Chernobyl in 1986-87, and ultimately 600,000 were involved with the containment effort. Today, a thirty-kilometer “Exclusion Zone” surrounds the Chernobyl disaster site, and Ukraine’s government expends about 5% of its budget annually on costs related to its aftermath.140 Although claims of tens or even hundreds of thousands of deaths are exaggerated—by conservative estimates perhaps 8,000 people suffered cancer as a result of Chernobyl141—and the failures leading to the explosion are unlikely to be repeated, it was an epic catastrophe from which the Soviet Union and nuclear industry never fully recovered. In the United States and many other countries, what lingering support for nuclear power had remained after Three Mile Island was largely buried alongside the victims of Chernobyl.
Today, that situation appears about to change. In late 2008, the U.S. company Northrop Grumman and the French company Areva, the world’s largest builder of nuclear reactors, announced a $360 million plan to build major components for seven proposed U.S. reactors. Twenty-one companies were seeking permission to build thirty-four new nuclear power plants across the United States, from New York to Texas. By 2009 the French firm EDF Group was planning to build eleven new reactors in Britain, the United States, China, and France, and contemplating several more in Italy and the United Arab Emirates. In 2010 U.S. president Barack Obama pledged more than $8.3 billion in conditional loans to build the first nuclear reactor on U.S. soil in over three decades, and for his 2011 budget sought to triple loan guarantees (to $54.5 billion) supporting six to nine more. In a Wall Street Journal Op-Ed, U.S. secretary of energy Steven Chu called for building “small modular reactors,” less than one-third the size of previous nuclear plants, made in factories and transported to sites by truck or rail. And for the first time nearly two-thirds of Americans were in favor of nuclear power, the highest level of support since Gallup began polling on the issue in 1994.142
One reason for all the renewed interest is that nuclear fission is one of only two forms of carbon-free energy already contributing a significant fraction of the world’s power supply.143 Notwithstanding the threatening appearance of billowing white plumes streaming from concrete nuclear towers, they emit no greenhouse gases directly,144 thus winning the support of a surprising number of climate-change activists. To date, nuclear reactors have been tapped mainly to produce electricity, but they also have potential uses for seawater desalinization, district heating, and making hydrogen fuel.145 Nuclear power plants are very costly and take years to build, but once established they can provide electricity at prices comparable to burning fossil fuel. In some countries like Japan, nuclear power is actually cheaper than fossil-fuel power.146 Nuclear advocates point to France, which gets about 80% of its electricity from nuclear plants with no accidents so far. Belgium, Sweden, and Japan also obtain large amounts of electricity from nuclear reactors, so far without major mishap.
Public health remains the single greatest concern with nuclear energy. Although great strides have been made to increase reactor safety,147 accidents and terrorism remain legitimate threats. Of grave concern is the disposal of radioactive waste, which must be safely interred for tens of thousands of years. The most feasible way to do this is probably subterranean burial in a geologically secure formation. But certifying anything as “geologically secure” for a hundred thousand years is exceedingly difficult. After more than two decades of research and $8 billion spent, the U.S. government recently killed plans to tunnel a long-term nuclear waste repository into Yucca Mountain, a volcanic formation in Nevada. Even in the middle of desert, there was simply too much evidence of fluctuating water tables, earthquakes, and potential volcanic activity to declare the site “safe” for a hundred thousand years.
Finally, there is the issue of fuel supply. Estimated R/P life-index estimates for conventional uranium are under a hundred years, with most closer to fifty years. Therefore, over the long run a shift to nuclear power will require the reprocessing of spent uranium fuel rods from conventional “once-through” nuclear reactors so as to recycle usable fissile material. But spent-fuel reprocessing yields high-grade plutonium, even small amounts of which are the principal barrier to acquiring a nuclear bomb. Therefore, any expansion in nuclear power that involves spent-fuel reprocessing or breeder reactors elevates the threat of proliferating nuclear weapons and creates attractive targets for terrorism.
Nuclear power generates about 15% of the world’s electricity today. In a recent analysis of the industry’s future, the Massachusetts Institute of Technology concluded that if aggressive steps are taken to deal with the issues of waste disposal and security, it is feasible to more than triple the world’s current capacity to 1,000-1,500 conventional “once-through” nuclear reactors, up from the equivalent of 366 such reactors today.148 Enough natural uranium is available to support this to at least midcentury or so. Depending on the choices we make,149 our global nuclear power capacity is projected to either stagnate or grow fivefold, producing as little as 8% to as much as 38% of the world’s electricity by the year 2050.
Renewable Carbon-Free Electricity: The Holy Trinity
Besides nuclear fission, there are only three other carbon-free sources of energy positioned to significantly dent the world’s power needs by 2050.150 Unlike nuclear energy (which consumes uranium), they are truly renewable. One of them, hydropower, is already important, generating about 16% of the world’s electricity today. The other two sources—wind and solar—provide barely 1% combined. But that breakdown is poised to change.
Hydropower is a mature technology that has already been developed to or near its maximum potential in much of the world. There are only so many large rivers, and even fewer appropriate places to build a dam. Except in Africa, South America, and parts of Asia, most of the good spots have already been taken. Big dams also create many local problems. They pool huge reservoirs, displacing farmland, wildlife, and people. They dramatically change hydrological conditions downstream—a big source of strife between countries sharing transboundary rivers—and fill up with silt, requiring dredging. While “small hydropower” schemes that don’t require dams, like waterwheels, have great potential for growth, big dam projects do not. For this reason, regardless of the choices we make,151 hydropower is expected to lose market share despite doubling in absolute terms. By 2050, it is projected to supply just 9%-14% of the world’s electricity.
Wind and solar, in contrast, are the fastest-growing energy sectors today. Although wind power provides barely 1% of the world’s electricity, that number hides enormous differences around the globe. Nearly 4% of electricity in the European Union, and nearly 20% in Denmark and the Canadian province of Prince Edward Island, comes from wind.152 This has partly to do with geography—the mid to high latitudes are windier than the tropics, for example—but much of it is driven by investment.
The wind power trend kicked off in the 1980s in California and in the 1990s in Denmark. Today, Germany, the United States, and Spain are aggressive wind developers and presently lead the world in total installed power capacity, each with fifteen thousand megawatts or more (a typical coal-fired power plant is five hundred to a thousand megawatts; a thousand megawatts might power one million homes). India and China are close behind with six to eight thousand megawatts. Canada, Denmark, Italy, Japan, the Netherlands, Portugal, and the United Kingdom all have installed capacities of one thousand megawatts or more. Altogether, at least forty countries worldwide are now developing wind farms,153 and all of these numbers are growing quickly.
The reasons for this rapid growth are many. To start, wind is free. Wind turbines are relatively cheap, consume no fuel or water, emit no greenhouse gases, and, aside from the permitting process, can be installed quickly. Because wind farms are comprised of many turbines, it is possible to start small, then grow capacity over time. At present, wind power is one of the cheapest renewable energies, averaging around $0.05 per kilowatt-hour,154 putting it closest to conventional fossil-fuel electricity prices ($0.02-$0.03/ kWh). The main concerns with wind power are bird and bat deaths, conflicts over land use, and aesthetics. Most wind farms today are on land, but offshore installations are also gathering investors’ interest. While it’s harder to install turbines and grid connections in the ocean, offshore winds are stronger, so they produce more electricity, and there is less competition for the space. In 2010 the Obama administration approved the United States’ first offshore wind farm near Cape Cod, Massachusetts.
The wind power industry has a thirty-year legacy and is now reaping double-digit growth. Depending on the choices we make,155 our global wind power capacity is expected to grow anywhere from tenfold to over fiftyfold by the year 2050, cornering 2%-17% of the world’s electricity market.
That leaves solar energy. The Sun, in principle, offers us more inexhaustible clean power than we could ever possibly use. One hour of sunlight striking our planet contains more energy than all of humanity uses in a year. It absolutely dwarfs all other possible energy sources, even if we add up all of the world’s coal, oil, natural gas, uranium, hydropower, wind, and photosynthesis combined. It is nonpolluting, carbonless, and free. Panels of solar photovoltaic cells have been powering satellites for over half a century, and we see their familiar shape all around us—encrusted on streetlights, garden lamps, and pocket calculators. Why, then, is our total world production of solar photovoltaic electricity equivalent to that of just one very large coal-fired power plant?
For all its largesse, sunlight has a fundamental problem. Although vast in total, its energy density is low. Unlike a power-packed coal nugget, sunlight is diffuse, low-grade stuff. Getting significant power out of it requires covering a large area, either with mirrors to focus the Sun’s rays, or with panels of photovoltaic (PV) cells that directly convert solar photons into electricity. Both are expensive (especially photovoltaics) and efficiencies are low.
Theoretically,156 PV cells can convert sunlight to electricity with efficiencies as high as 31%, but most are considerably lower, around 10%-20%. If that sounds pathetic to you, then consider that the efficiency of plant photosynthesis, after three billion years of evolution, is just 1%. Nonetheless, a typical silicon-based solar photovoltaic panel, with 10% efficiency and a manufacturing cost of around three hundred dollars per square meter, produces electricity that costs around thirty-five cents per kilowatt-hour. That’s seven to seventeen times greater than coal-fired electricity. So sunlight, despite being far and away the world’s biggest energy source, is also the most expensive.
Finding a cheaper way to hijack sunlight is thus the single greatest barrier to the widespread use of solar power. Most photovoltaic panels are made of sliced wafers of extremely pure silicon that are highly polished, fitted with electrical contacts, sealed into a module, and encased in transparent glass. They are heavy, cumbersome, and expensive to make, and become even more costly when the price of silicon goes up. As ardent renewable-energy enthusiast Chris Goodall points out, installing large solar panels on the roof of his Oxford home costs about £12,000, yet the total market value of the electricity they produce after four years is just £300. While it makes sense for governments to subsidize such investments initially, eventually the technology must become competitive with fossil fuels in order to take hold.
That means the cost of PVs must fall to about one-fifth of what they are today, a huge challenge. It’s a materials-science problem and there is much exciting research under way, particularly in the area of “thin-film” photovoltaics that abandon heavy silicon panels in favor of exotic coatings of semiconductors like cadmium telluride, or even carbon nanotubes.157 The conversion efficiencies of these materials would probably be lower than that of traditional silicon PV cells (8%-12%), but if they could be manufactured cheaply—even printed as shrink-wrap for buildings, for example—the cost of PV electricity would tumble and we could start enshrouding the planet in electricity-making paints and films.
At the moment, photovoltaic paint lies in the sweat-soaked dreams of nanotech graduate students. A safer bet for 2050 lies in the expansion of so-called concentrated solar thermal power, or CSP, technology. Like wind power it has been around for years, and is already providing economically viable electricity from a handful of pilot installations. Unlike photovoltaics, CSP does not attempt to convert sunlight into electrons directly. Instead, in much the way that kids fry ants with a magnifying glass, CSP relies on mirrors or lenses to focus the Sun’s rays, heating a fluid like water, mineral oil, or molten salt inside a metal tube or tank. The fluid boils or expands, forcing a mechanical turbine or Stirling engine to move, making electricity. Sound familiar? It’s just plain old-fashioned electricity generation158 driven by a new source. And because CSP plants work best on hot, sunny days—a time when millions of air conditioners drive up the price of electricity—their product commands top dollar. Unlike photovoltaics, CSP requires no silicon wafers, cadmium telluride, or other fancy semiconductors, just a great many polished mirrors, the motorized steel racks to mount them on, and a traditional power plant.
To make the most sense, CSP plants should be located in deserts. Current operations include several in Spain and the U.S. states of California, Nevada, and Arizona. Seventy miles southwest of Phoenix a billion-dollar project is under way to spread mirrors across three square miles of desert, enough to power seventy thousand homes.159 Other projects are operating or planned in Algeria, Egypt, Morocco, Jordan, and Libya.160 In terms of sheer untapped potential, these North African countries are the next Saudi Arabia-in-waiting for solar energy (as is Saudi Arabia). The same goes for Australia, much of the Middle East, the southwestern United States, and the Altiplano Plateau and eastern side of Brazil in South America.
So why, then, haven’t we plastered CSP plants all over our deserts? One reason is that because there are still so few built, the necessary mirrors and other equipment are still specialty products and thus quite expensive. These costs are expected to fall as the industry grows, but at the moment, with electricity prices of at least twelve cents per kilowatt-hour, CSP is still less economical than conventional power plants. Another challenge is the lack of high-voltage transmission lines connecting hot, empty deserts to the places where people actually live. All the electricity production in the world is worthless if it can’t be delivered to customers. This entails running hundreds of miles of high-voltage direct-current (HVDC) power cable, which suffers lower transmission losses than traditional alternating current (AC) transmission lines. HVDC is already used to transmit electricity over great distances in Africa, China, the United States, Canada, and Brazil but, like all major infrastructure, is quite expensive. An undersea HVDC cable between Norway and the Netherlands cost about a million euros per kilometer in 2008.161 So while doable, channeling solar power from the world’s deserts to cities will require major capital investments in infrastructure.
One disadvantage that afflicts not just CSP but all forms of solar and wind energy is energy storage. Few of us marvel that a light beam appears with the simple click of a flashlight button. Yet, imagine if the flashlight were powered not by battery but by hand-crank, with no battery storage whatsoever. Use of this flashlight would require constant hand-cranking (I would simply give up and sit in the dark). Furthermore, for maximum efficiency the turning hand would have to exactly match the electricity requirement at all times: Without battery storage, any excess power generated (i.e., beyond the wattage of the bulb) is lost; any deficit causes the bulb to dim.
Scaling this problem up, we see that meeting society’s volatile electricity needs in a nonwasteful manner poses an enormous challenge. Demand fluctuates by the week, hour, and minute in response to all sorts of things, from business cycles to the commercial breaks of popular television programs. Power utilities must constantly adjust their production of electricity accordingly. Too much capacity wastes money as power plants make unused electricity; too little capacity triggers brownouts or rolling power outages.
It’s hard enough to predict fluctuations on the demand side. Solar and wind sources—because they wither or die on calm days, cloudy days, and at night—add new volatility on the supply side. In a world powered substantially from wind and solar sources, avoiding brownouts will require vast “smart grids,” meaning highly interconnected and communicative transmission networks, plenty of backup capacity from conventional power plants,162 and new ways to store excess electricity for times of deficit.
Storing excess electricity is challenging. One way is “pumped storage” using water. If excess electricity becomes available, it is used to pump water uphill, from a reservoir or tank, to another one at higher elevation. When electricity is wanted, the water is released from the upper to lower container again, flowing by force of gravity over turbines to make electricity. Pumped storage is relatively efficient, inexpensive, and has been around for a long time, but requires lots of water and reservoirs.163
An exciting storage idea is to tap into the batteries of millions of parked electric cars whenever they plug into the power grid. By communicating with the grid, car owners can elect to charge up when electricity demand is low, and discharge back into the grid when demand is high. Google Inc. is actively developing such a “V2G” (vehicle-to-grid) technology through their RechargeIt initiative.164 In effect, a city’s entire motor pool becomes a giant collective battery bank, helping to buffer fluctuations in electricity supply and help protect against brownouts. In return, cars earn a profit by buying electricity when it is cheap and selling when it is expensive. Thus, the notion of a “cash-back hybrid.” Jeff Wellinghoff, commissioner of the U.S. Federal Energy Regulatory Committee, estimates that if millions of cars were made available to the grid, cash-back hybrids could earn their owners up to two thousand to four thousand dollars per vehicle.
Solar power is an exciting, fast-evolving field, and is positioned for technological breakthroughs on multiple fronts.165 With transmission line investments CSP technology has good potential to bloom in well-placed deserts, for example tapping the northern Sahara to supply electricity to Europe. Globally, the solar power industry is over USD $10 billion per year and growing 30%-40% annually, even faster than wind power. 166,167 Depending on the choices we make,168 world electricity production from solar sources is expected to grow anywhere from fiftyfold to nearly two thousandfold by 2050, cornering some 0%-13% of the world’s electricity market.
That zero was not a typo. This is all very exciting and will surely inspire many investor fortunes in the stock market. But if you’ve been adding up the numbers as we went along, you’ve already figured something out: Fast-growing as they are, the blunt truth is that the clean, renewable energy sources we’d all love to have—wind, solar, hydro, geothermal, tidal, and (sustainably grown) biomass—are in no position to replace nonrenewable sources by 2050.169
Despite blistering growth, by 2050 solar energy will just be starting to substantially dent our energy needs. It takes time to grow from a base of near-zero. Our present capacity is so minuscule that a fiftyfold increase of solar power in the next four decades will still supply about 0% of the world’s electricity. Even the most aggressively modeled expansion of solar sources suggests they can meet just 13% of the world’s electricity demand by 2050. So buy the stocks if you wish, but in forty years where will the bulk of the world’s energy be coming from? Very likely from the same sources they come from today. There is simply no realistic way to eliminate oil, coal, and natural gas from the world’s energy portfolio in just forty years’ time.
Natural Gas versus the Dirty Temptation
As oil supply tightens we will harden our gaze more than ever upon coal and natural gas, until that distant day when renewable sources can catch up. Both have their handicaps and benefits relative to oil and to each other. Neither approaches the value of oil for making liquid fuels and chemical products. However, these two fossil fuels already dominate the world’s electricity generation, with about 40% coming from coal and 20% from natural gas (in contrast, only 7% of all electricity is generated using oil). A transition to electric cars, therefore, would seem a natural one even without renewable and nuclear sources of electricity.
Should current trends continue unabated, coal demand will nearly triple by 2050, at which point it would capture 52% of the electricity market. Natural gas demand will more than double, at which point it would capture about 21%. However, nothing is fixed about these “business as usual” projections. Through aggressive conservation measures, and development of natural gas, nuclear, and renewable sources, for example, global electricity production from coal could be as little as a few percent by then.170 There are compelling reasons for the world to work toward this goal, as we shall see shortly.
Demand for natural gas is projected to more than double between now and 2050, and it is difficult to imagine any scenario in which we will not be aggressively pursuing it (and oil) between now and then. Natural gas is widely used for heating, cooking, and industrial purposes. It comprises about one-fourth of all energy consumption in the United States. It has a growing niche as a gaseous transportation fuel, and various gas-to-liquid technologies have good potential for providing liquid fuels. It is the prime feedstock for making agricultural nitrogen fertilizers. Of the big three fossil hydrocarbons, natural gas is by far the cleanest, with roughly one-tenth to one-thousandth the amount of sulfur dioxides, nitrous oxides, particulates, and mercury of coal or oil. When burned, it releases about two-thirds as much carbon dioxide as oil and half as much as coal. There is also considerable room to improve the efficiency of natural-gas-fired plants, mainly by replacing gas-fired steam cycles with more efficient combined-cycle plants.
The biggest drawback of natural gas, of course, is that it’s a gas. Unlike coal and oil, which can be simply dumped into tankers or a train car, it isn’t very portable. Getting natural gas from wells to distant markets requires either an intricate pipeline system or construction of a special refinery to chill it into liquefied natural gas (LNG). Because LNG takes up only about one six-hundredth the volume of natural gas, it can then be transported using tankers. At present, LNG comprises only a tiny fraction of world gas markets, but its use is growing fast. It is especially appealing for remote gas fields that would otherwise be uneconomic to develop. However, this does not come cheaply. A joint LNG venture begun in 2010 by Chevron, Exxon Mobil, and Shell off the coast of Australia, for example, was expected to cost roughly USD $50 billion. The project will tap offshore gas fields for Asian markets and, together with other LNG projects, could make Australia the world’s second-largest LNG exporter after Qatar, with revenues in excess of USD $24 billion per year by 2018.171
A second drawback of natural gas, similar to a big drawback of oil, is that most of it is concentrated in a handful of countries. The world’s largest reserves, by far, are controlled by the Russian Federation (about 1,529 trillion cubic feet or 23.4% of world total), followed by Iran (16.0%), Qatar (13.8%), Saudi Arabia (4.1%), the United States (3.6%), United Arab Emirates (3.5%), Nigeria (2.8%), Venezuela (2.6%), Algeria (2.4%), and Iraq (1.7%).172 China and India, projected to be the first- and third-largest economies by 2050, have only 1.3% and 0.6% of world reserves of natural gas, respectively. These countries will require aggressive imports of foreign gas to meet their needs.
Like oil, gas fields are finite, so our transition to natural gas is something of a bridging solution to our long-term energy problems. But, as the cleanest-burning fossil fuel, with lowest greenhouse gas emissions and greatest room for efficiency improvements, it is by far the most environmentally appealing of the three. There are substantial world reserves remaining, a long history of exploitation, and additional markets for fertilizers and perhaps hydrogen feedstocks. In the coming decades natural gas will be an elite commodity, highly prized wherever it is found. There seems little doubt that natural gas, like oil, is a raw resource we shall pursue to the last corners of the Earth.
Coal, in contrast, is plentiful and found all over the world. Proved reserves of natural gas have R/P life-index lifetimes of only around sixty years, but for coal they are at least twice as long, often up to two hundred years.173 The largest reserves are in the United States (238.3 trillion tons, or 28.9% of world reserves), Russia (19.0%), China (13.9%), and India (7.1%), but coal is mined all over the planet. Coal fueled the Industrial Revolution and, despite popular perceptions, is the world’s single largest electricity source today. Half of all electricity in the United States comes from more than five hundred coal-fired power plants. In China it’s 80%, and the country is building about two new plants per week, equivalent to adding the entire United Kingdom power grid every year. 174 Coal can even be gasified to make synthetic natural gas (SNG) or liquid diesel and methanol transport fuels. South Africa has been doing this since the 1950s and currently makes nearly two hundred thousand barrels of liquid coal fuel every day.175 Under our current trajectory, world coal consumption is projected to grow 2%-4% annually for many decades, surpassing oil to become the world’s number one energy source. Should current trends continue unabated, coal demand will nearly triple by 2050.
It’s enough to make you wish there was more oil. Coal is the dirtiest and most environmentally damaging fuel on Earth. Entire mountaintops are leveled to obtain it. Coal mining pollutes water and devastates the landscape, covering it with toxic slurry pools and leaving behind acidic, eroding deposits upon which nothing will grow. I studied one of these places for my rather traumatizing master’s thesis. An hour’s fieldwork would leave me covered in black grime, hands and clothing stained orange from an acidic creek full of chemical leachate.176 Coal mining also releases trapped methane, a powerful greenhouse gas and even more powerful explosive inside subterranean mines. Several thousand coal miners are killed each year in China.
Coal is worse than oil and much worse than natural gas when it comes to emissions of greenhouse gas, because its carbon content is the highest of all fossil fuels. To produce an equivalent amount of useful energy, burned coal unleashes roughly twice as much carbon dioxide as burned natural gas. It also releases a host of irritating or toxic air pollutants, including sulfur dioxide (SO2), nitrogen oxides (NO and NO2), particulates, and mercury. It makes acid rain. If converted to a liquid, it releases 150% more carbon dioxide than oil fuels. To people hoping to bring our escalating release of greenhouse gases to the atmosphere under control, coal is Public Enemy Number One.
As my University of California colleague Catherine Gautier writes, “Were it not for its environmental impact, coal would be the obvious choice to replacing oil.”177 From a geological perspective, there will be no scarcity of the stuff anytime before 2100.178 And therein is the problem: From nearly all model projections, coal is slated to replace oil. By the year 2030 its consumption in the United States is projected to rise nearly 40% over 2010 levels. In China, which already burns twice as much coal as the United States, consumption is projected to nearly double.
Other than banning the stuff, the only thin hope lying between this future and a giant upward lurch in the atmosphere’s greenhouse gas concentrations is something called Carbon Capture and Storage (CCS), often called “clean coal” technology. There’s no such thing as clean coal, but CCS does appear technically possible and, at first blush, alluringly simple: Rather than send carbon dioxide up the smokestacks of coal-burning power plants, use chemical scrubbers to capture it, compress it to a high-pressure liquid, then pipe the liquid someplace else to pump deep underground. Oil companies already use a similar process to force more petroleum out of declining oil fields. Successful pilot demonstrations of CCS technology are under way in Norway, Sweden, and Wyoming, the longest running for more than a decade without mishap.
The main problem with CCS is one of scale, and therefore cost. First, the “capture” process consumes energy itself, requiring significantly bigger plants burning even more coal to generate the same quantity of electricity. Second, a vast network of pipelines is needed to transport staggering volumes of liquid CO2 away from the power plants to suitable burial sites (abandoned oil fields or deep, salty aquifers). The United States alone produces about 1.5 billion tons of CO2 per year from coal-fired power plants. Capturing and storing just 60% of that means burying twenty million barrels of liquid per day—about the same as the country’s entire consumption of oil.179 Small pilot demonstrations are one thing, but a demonstration of CCS at the scale of even one full-sized power plant has yet to be attempted. FutureGen, the only proposed prototype, was scrapped in 2008 when its estimated cost swelled to $1.8 billion (the project has since been revived). Finally, there are no guarantees that the stuff won’t leak back out to the atmosphere. A leakage rate of just 1% per year would lead to 63% of the stored carbon dioxide being released within a century, undoing much of the supposed environmental benefit.180
Carbon Capture and Storage has become a commonly accepted bullet point among proponents of coal, as if all of the above problems have somehow been worked out. Politicians and many scientists have dutifully lined up behind it. It figures prominently in all of our biggest blueprints for reducing greenhouse gases, including model scenarios of the Stern Report, the Intergovernmental Panel on Climate Change, and the International Energy Agency projections outlined above. CCS is embraced by Barack Obama, Angela Merkel, Gordon Brown, and other leaders of the G8. It is the single strand of hope upon which a thunderous increase in carbon emissions from our coming coal boom might possibly be restrained.
I’m not holding my breath.