Blogging on the new "Caring Economics" that takes into account the full spectrum of economic activities–from the life–sustaining activities of the household, to the life-enriching activities of caregivers and communities, to the life-supporting processes of nature.
The Caribbean appears to be the ideal location for renewable energy development. Petroleum resources are scarce and renewable resources such as solar, wind and geothermal are plentiful. Energy prices are high as there is no opportunity for economy of scale benefits that large land masses enjoy. Added to that, climate change impacts pose a major threat to the region’s small-island economies that are largely dependent on tourism and agriculture.
Despite this, most Caribbean nations still use imported diesel or oil to generate 90-100% of their energy. So what has been the barrier to using renewables? Many people have pointed to the cost factor. Small economies mean that in most cases countries have difficulty in financing renewable energy projects that require high upfront capital. Also, regulations have been slow in setting clear rules for grid interconnection. These factors have led some international investors and developers to be cautious about entering the Caribbean market. http://bit.ly/1NeB0fj
WASHINGTON — In the strongest action ever taken in the United States to combatclimate change,President Obamawill unveil on Monday a set of environmental regulations devised to sharply cut planet-warming greenhouse gas emissions from the nation’s power plants and ultimately transform America’s electricity industry.
The rules are the final, tougher versions of proposed regulations that the Environmental Protection Agency announced in 2012 and 2014. If they withstand the expected legal challenges, the regulations will set in motion sweeping policy changes that could shut down hundreds of coal-fired power plants, freeze construction of new coal plants and create a boom in the production of wind and solar power and other renewable energy sources.
As the president came to see the fight against climate change as central to his legacy, as important as the Affordable Care Act, he moved to strengthen the energy proposals, advisers said. The health law became the dominant political issue of the 2010 congressional elections and faced dozens of legislative assaults before surviving two Supreme Court challenges largely intact.
“Climate change is not a problem for another generation, not anymore,” Mr. Obama said in a video posted on Facebook at midnight Saturday. He called the new rules “the biggest, most important step we’ve ever taken to combat climate change.”
The most aggressive of the regulations requires the nation’s existing power plants to cut emissions 32 percent from 2005 levels by 2030, an increase from the 30 percent target proposed in the draft regulation.
That new rule also demands that power plants use more renewable sources of energy like wind and solar power. While the proposed rule would have allowed states to lower emissions by transitioning from plants fired by coal to plants fired by natural gas, which produces about half the carbon pollution of coal, the final rule is intended to push electric utilities to invest more quickly in renewable sources, raising to 28 percent from 22 percent the share of generating capacity that would come from such sources.
In its final version, the rule retains the same basic structure as the draft proposal: It assigns each state a target for reducing its carbon pollution from power plants, but allows states to create their own custom plans for doing so. States have to submit an initial version of their plans by 2016 and final versions by 2018.
But over all, the final rule is even stronger than earlier drafts and can be seen as an effort by Mr. Obama to stake out an uncompromising position on the issue during his final months in office.
The anticipated final climate change regulations have already set off what is expected to be broad legal, legislative and political backlash as dozens of states, major corporations and industry groups prepare to file lawsuits challenging them.
Senator Mitch McConnell of Kentucky, the Republican majority leader, has started an unusual pre-emptive campaign against the rules, asking governors to refuse to comply. Attorneys general from more than a dozen states are preparing legal challenges against the plan. Experts estimate that as many as 25 states will join in a suit against the rules and that the disputes will end up before the Supreme Court.
Leading the legal charge are states like Wyoming and West Virginia with economies that depend heavily on coal mining or cheap coal-fired electricity. Emissions from coal-fired power plants are the nation’s single largest source of carbon pollution, and lawmakers who oppose the rules have denounced them as a “war on coal.”
“Once the E.P.A. finalizes this regulation, West Virginia will go to court, and we will challenge it,” Patrick Morrisey, the attorney general of West Virginia, said in an interview with a radio station in the state on Friday. “We think this regulation is terrible for the consumers of the state of West Virginia. It’s going to lead to reduced jobs, higher electricity rates, and really will put stress on the reliability of the power grid. The worst part of this proposal is that it’s flatly illegal under the Clean Air Act and the Constitution, and we intend to challenge it vigorously.”
Although Obama administration officials have repeatedly said states will have flexibility to design their own plans, the final rules are explicitly meant to encourage the use of interstate cap-and-trade systems, in which states place a cap on carbon pollution and then create a market for buying permits or credits to pollute. The idea is that forcing companies to pay to pollute will drive them to cleaner sources of energy.
That new rule also demands that power plants use more renewable sources of energy like wind and solar power
Mr. Obama tried but failed to push through a cap-and-trade bill in his first term, and since then, the term has become politically toxic: Republicans have attacked the idea as “cap and tax.”
But if the climate change regulations withstand legal challenges, many states could still end up putting cap-and-trade systems into effect. Officials familiar with the final rules said that in many cases, the easiest and cheapest way for states to comply would be by adopting cap-and-trade systems.
The rules take into account the fact that some states may refuse to submit plans, and on Monday, the administration will also unveil a template for a plan to be imposed on such states. That plan will include the option of allowing a state to join an interstate cap-and-trade system.
The rules will also offer financial benefits for states that choose to take part in cap-and-trade systems. The final rules will extend until 2022 the timeline for states and electric utilities to comply, two years later than originally proposed. But states that begin to take actions to cut carbon pollution as early as 2020 will be rewarded with carbon reduction credits — essentially, pollution permits that can be sold for cash in a cap-and-trade market.
Climate scientists warn that rising greenhouse gas emissions are rapidly moving the planet toward a global atmospheric temperature increase of 3.6 degrees Fahrenheit, the point past which the world will be locked into a future of rising sea levels, more devastating storms and droughts, and shortages of food and water. Mr. Obama’s new rules alone will not be enough to stave off that future. But experts say that if the rules are combined with similar action from the world’s other major economies, as well as additional action by the next American president, emissions could level off enough to prevent the worst effects of climate change.
Mr. Obama intends to use the new rules to push other countries to commit to deep reductions in their own carbon emissions before a United Nations summit meeting in Paris in December, when a global accord to fight climate change is expected to be signed.
Mr. Obama’s pledge that the United States would enact the climate change rules was at the heart of a pact that he made last year with President Xi Jinping of China, committing their nations, the world’s two largest carbon polluters, to substantially cut emissions.
“It’s the linchpin of the administration’s domestic effort and international effort on climate change,” said Durwood Zaelke, president of the Institute for Governance and Sustainable Development, a research organization. “It raises the diplomatic stakes in the run-up to Paris. He can take it on the road and use it as leverage with other big economies — China, India, Brazil, South Africa, Indonesia.”
While opponents of the rules have estimated that compliance will cost billions of dollars, raise residential electricity rates and slow the American economy, the administration argues that the rules will save the average American family $85 annually in electricity costs and bring additional health benefits by reducing emissions of pollutants that cause asthma and lung disease.
The rules will be announced at a White House ceremony on Monday and signed by Gina McCarthy, the Environmental Protection Agency administrator. While the ceremony is scheduled to take place on the White House’s South Lawn, officials said it might be moved indoors to the East Room after forecasters predicted that the weather would be too hot.
By 2040, the world's power-generating capacity mix will have transformed: from today's system composed of two-thirds fossil fuels to one with 56% from zero-emission energy sources. Renewables will command just under 60% of the 9,786GW of new generating capacity installed over the next 25 years, and two-thirds of the $12.2 trillion of investment. • Economics – rather than policy – will increasingly drive the uptake of renewable technologies. All-in project costs for wind will come down by an average of 32% and solar 48% by 2040 due to steep experience curves and improved financing. Wind is already the cheapest form of new power generation capacity in Europe, Australia and Brazil and by 2026 it will be the least-cost option almost universally, with utility-scale PV likely to take that mantle by 2030.
• Over 54% of power capacity in OECD countries will be renewable energy capacity in 2040 – from a third in 2014. Developed countries are rapidly shifting from traditional centralised systems to more flexible and decentralised ones that are significantly less carbon-intensive. With about 882GW added over the next 25 years, small-scale PV will dominate both additions and installed capacity in the OECD, shifting the focus of the value chain to consumers and offering new opportunities for market share.
• In contrast, developing non-OECD countries will build 287GW a year to satisfy demand spurred by economic growth and rising electrification. This will require around $370bn of investment a year, or 80% of investment in power capacity worldwide. In total, developing countries will build nearly three times as much new capacity as developed nations, at 7,460GW – of which around half will be renewables. Coal and utility-scale PV will be neck and neck for additions as power-hungry countries use their low-cost domestic fossil-fuel reserves in the absence of strict pollution regulations.
• Solar will boom worldwide, accounting for 35% (3,429GW) of capacity additions and nearly a third ($3.7 trillion) of global investment, split evenly between small- and utility-scale installations: large-scale plants will increasingly out-compete wind, gas and coal in sunny locations, with a sustained boom post 2020 in developing countries, making it the number one sector in terms of capacity additions over the next 25 years.
• The real solar revolution will be on rooftops, driven by high residential and commercial power prices, and the availability of residential storage in some countries. Small-scale rooftop installations will reach socket parity in all major economies and provide a cheap substitute for diesel generation for those living outside the existing grid network in developing countries. By 2040, just under 13% of global generating capacity will be small-scale PV, though in some countries this share will be significantly higher.
• In industrialised economies, the link between economic growth and electricity consumption appears to be weakening. Power use fell with the financial crisis but has not bounced back strongly in the OECD as a whole, even as economic growth returned. This trend reflects an ongoing shift to services, consumers responding to high energy prices and improvements in energy efficiency. In OECD countries, power demand will be lower in 2040 than in 2014.
• The penetration of renewables will double to 46% of world electricity output by 2040 with variable renewable technologies such as wind and solar accounting for 30% of generation – up from 5% in 2014. As this penetration rises, countries will need to add flexible capacity that can help meet peak demand, as well as ramp up when solar comes off-line in the evening. More
Record carbon dioxide (CO2) concentrations in the atmosphere were reported worldwide in March, in what scientists said marked a significant milestone for global warming.
The measure is the key indicator of the amount of planet-warming gases man is putting into the atmosphere at record rates, and the current concentrations are unprecedented in millions of years.
The new global record follows the breaking of the 400ppm CO2 threshold in some local areas in 2012 and 2013, and comes nearly three decades after what is considered the ‘safe’ level of 350ppm was passed.
“Reaching 400ppm as a global average is a significant milestone,” said Pieter Tans, lead scientist on Noaa’s greenhouse gas network.
“This marks the fact that humans burning fossil fuels have caused global carbon dioxide concentrations to rise more than 120ppm since pre-industrial times,” added Tans. “Half of that rise has occurred since 1980.”
World leaders are due to meet in Paris for a UN climate summit later this year in an attempt to reach agreement on cutting countries’ carbon emissions to avoid dangerous global warming.
Dr Ed Hawkins, a climate scientist at the University of Reading told the Guardian: “This event is a milestone on a road to unprecedented climate change for the human race. The last time the Earth had this much carbon dioxide in the atmosphere was more than a million years ago, when modern humans hadn’t even evolved yet.
“Reaching 400ppm doesn’t mean much in itself, but the steady increase in atmospheric greenhouse gases should serve as a stark reminder of the task facing politicians as they sit down in Paris later this year.”
Greenhouse gas emissions from power plants stalled for the first time last year without the influence of a strict economic recession, according to the International Energy Agency, an influential thinktank.
Nick Nuttall, a spokesman for the UN Framework Convention on Climate Change (UNFCCC) which oversees the international climate negotiations, said: “These numbers underline the urgency of nations delivering a decisive new universal agreement in Paris in December – one that marks a serious and significant departure from the past.
“The agreement and the decisions surrounding it needs to be a long term development plan providing the policies, pathways and finance for triggering a peaking of global emissions in 10 years’ time followed by a deep, decarbonisation of the global economy by the second half of the century.”
But even if manmade emissions were dramatically cut much deeper than most countries are planning, the concentrations of CO2 in the atmosphere would only stabilise, not fall, scientists said.
James Butler, director of Noaa’s global monitoring division, said: “Elimination of about 80% of fossil fuel emissions would essentially stop the rise in carbon dioxide in the atmosphere, but concentrations of carbon dioxide would not start decreasing until even further reductions are made and then it would only do so slowly.”
Concentrations of CO2 were at 400.83ppm in March compared to 398.10ppm in March 2014, the preliminary Noaa data showed. They are are expected to stay above 400pm during May, when levels peak because of CO2 being taken up by plants growing in the northern hemisphere.
Noaa used air samples taken from 40 sites worldwide, and analysed them at its centre in Boulder, Colorado. The agency added that the average growth rate in concentrations was 2.25ppm per year from 2012-2014, the highest ever recorded for three consecutive years. More
In early March, Stéphane Tromilin, a sustainable energy attaché in the French government, gave a United Nations webinar on the French government’s work on French islands.
In it, he spent most of the time discussing the unique challenges of islands, specifically those in the Caribbean like Guadeloupe, but also noted an island’s value as “laboratories to develop renewable energy solutions.”
Christophe Mazurier, a European financier and climate defender, has seen these laboratories in action, specifically in the Caribbean, where he has a home in the Bahamas. While many of these nations are at greater risk of climate disasters – in the form of devastating hurricanes and other storms – than most other places on earth, many refuse to become victims of the global intransigence on climate change. Instead, many Caribbean nations are taking it upon themselves to be the change they wish to see in their developed-nation counterparts.
Guadeloupe, the overseas French territory mentioned earlier, is getting nearly 30 percent of its energy from solar, a number on par with climate leaders Germany. Aruba gets 20% of its energy from wind, and is aiming to be totally sustainable by 2020. Ten island nations, including the Bahamas, the British Virgin Islands, Grenada, Dominica and more have joined the Ten Island Challenge, launched by Richard Branson as a means to give these Caribbean island clear renewable goals and support them in meeting those goals.
Mazurier says that in many ways, the Caribbean’s move to solar was preordained. Not because they are at the forefront of climate change susceptibility, but because of their incredibly high energy costs. Most Caribbean island nations pay around 33 cents per kWh of energy, while for comparison the United States pays 10 cents per kWh. Even with the price of fuel bottoming out, and energy costs in places like Jamaica being cut in half, Jamaica and others were already well on their way to a renewable future.
In 2013, Jamaica signed a deal that would bring 36 MW of wind power for $63 million, which would help it divest from diesel oil in the long-term. By investing heavily in renewables now, the islands can avoid paying for diesel in the future… No matter how the price fluctuates. Mazurier says that this is the key for these Caribbean island nations, who don’t have multimillion dollar climate budgets. These nations cannot just throw money at the problem in hopes that they can play a role in the ultimate cooling of the climate. Their emissions are negligible in the grand scheme of things. The only aspect that can get these nations to buy in if they know they will ultimately pay less for energy than they do now. The positives for the overall climate and the state of the planet are simply a secondary byproduct of these finance-driven deals.
Whichever way it breaks out, says Mazurier, the Caribbean turn toward renewable energy is a refreshing and encouraging sign. The question now becomes: Can the larger nations take note of their island peers? More
The UN organisation in charge of global climate change negotiations is backing the fast-growing campaign persuading investors to sell off their fossil fuel assets. It said it was lending its “moral authority” to the divestment campaign because it shared the ambition to get a strong deal to tackle global warming at a crunch UN summit in Paris in December.
“We support divestment as it sends a signal to companies, especially coal companies, that the age of ‘burn what you like, when you like’ cannot continue,” said Nick Nuttall, the spokesman for the UN framework convention on climate change (UNFCCC).
The move is likely to be controversial as the economies of many nations at the negotiating table heavily rely on coal, oil and gas. In 2013, coal-reliant Poland hosted the UNFCCC summit and was castigated for arranging a global coal industry summit alongside. Now, the World Coal Association has criticised the UNFCCC’s decision to back divestment, saying it threatened investment in cleaner coal technologies.
Several analyses have shown that there are more fossil fuels in proven reserves than can be burned if catastrophic global warming is to be avoided, as world leaders have pledged. Divestment campaigners argue that the trillions of dollars companies continue to spend on exploration for even more fossil fuels is a danger to both the climate and investors’ capital.
“Everything we do is based on science and the science is pretty clear that we need a world with a lot less fossil fuels,” Nuttall told the Guardian. “We have lent our own moral authority as the UN to those groups or organisations who are divesting. We are saying ‘we support your aims and ambitions because they are fairly and squarely our ambition’, which is to get a good deal in Paris.”
The UN secretary general, Ban Ki-moon, sent a related message to investors in November, saying: “Please reduce your investments in the coal- and fossil-fuel-based economy and [move] to renewable energy.” But he stopped short of backing the divestment campaign itself.
Many religious groups are among the 180 organisations that have already divested their funds from fossil fuels, as well as city authorities and universities. “We see the divestment of churches very much as a moral imperative for them,” Nuttall said. “If their goal is relieving the suffering of millions of people, then divestment is in line with how they want the world to be.”
A recent tweet from the UNFCCC said: “Divestment worked to free [South Africa] of apartheid. Now it can help free us of fossil fuels.” The tweet carried a quote and image of the archbishop Desmond Tutu, who in 2014 told the Guardian: “People of conscience need to break their ties with corporations financing the injustice of climate change.”
Divestment campaigners say their aim is to bankrupt fossil fuel companies morally, not financially. “No one is saying divestment by churches and universities will shift the market in a one-to-one way,” said Nuttall. “The message now is that you can get off fossil fuels without undermining your investments. It’s a different world now. You can save the world and get a good return on your investment.”
Many senior figures and institutions in the financial world, including the World Bank, Bank of England, HSBC, Goldman Sachs and Standard and Poor’s, have warned that only a fraction of known fossil fuel reserves can be safely burned and that the remainder could plummet in value posing huge risks to investors.
Benjamin Sporton, acting chief executive of the World Coal Association, rejected the linking of divestment from fossil fuels with divestment from tobacco and apartheid South Africa. “The coal divestment campaign is not comparable to any other divestment campaign,” he said. “Active and responsible investors play a vital role in encouraging investment in cleaner coal technologies. Demand for coal is not going away.”
As global warming argument moves on to politics and business, Alan Rusbridger explains the thinking behind our major series on the climate crisis
Sporton said the divestment campaign was a concern: “There are economic and social dimensions that mean divesting from fossil fuels – and in particular coal – comes with significant risks, not least when 1.3 billion people are still without access to electricity.” The UN’s Intergovernmental Panel on Climate Change said in November that global warming is set to inflict severe and irreversible impacts on people and that “limiting its effects is necessary to achieve sustainable development and equity, including poverty eradication”.
“Meeting the demand projected by the International Energy Agency will call for $18.5tn of cumulative investment between 2014 and 2035,” said a spokesman for the International Association of Oil and Gas Producers (IOGP). “This doesn’t support an argument for divestment.” Replacing coal-fired power stations with gas can halve carbon emissions, he added.
IPIECA, the global oil and gas industry association for environmental issues and “the industry’s principal channel of communication with the UN”, declined to comment. More
One theme that is emerging loud and clear from the UN Climate Talks (much more so than any other previous negotiation) – if the world is serious about addressing the climate crisis, we must get off fossil fuels— completely. We can't just leave it up to governments, will you be a part of creating the solution we need?
Worldwide, a trillion single-use plastic bags are used each year, nearly 2 million each minute.
The amount of energy required to make 12 plastic shopping bags could drive a car for a mile.
City, state, and national governments around the world are trying to limit plastic bag litter and waste with bans and fees.
The oldest existing plastic bag tax is in Denmark, passed in 1993. Danes use very few light-weight single-use plastic bags: about 4 per person each year.
At least 16 African countries have announced bans on certain types of plastic bags, to varying levels of effectiveness. Before a ban on thin bags—which tear readily and get caught by the wind—went into effect in 2003, plastic bags were christened South Africa’s “national flower” because of their prevalence in bushes and trees. Thicker bags are taxed.
Many European countries tax plastic bags or ban free distribution. The EU Parliament is discussing measures that could require member states to cut plastic bag use by 80 percent by 2019. A memo on the proposal noted that “plastic bags have been found in stomachs of several endangered marine species,” including various turtles and porpoises, and 94 percent of North Sea birds.
The provinces of Ontario and Quebec have each halved their plastic bag use through a variety of measures, including store incentives for using reusable bags and retailer-imposed fees.
Livestock choking on plastic bags—from camels in the United Arab Emirates to sheep in Mauritania and cattle in India and Texas—have led communities to consider regulation.
Currently 100 billion plastic bags pass through the hands of U.S. consumers every year—almost one bag per person each day. Laid end-to-end, they could circle the equator 1,330 times.
Over 150 U.S. cities and counties ban or require fees for plastic bags. California passed the first statewide ban in 2014, though Hawaii had a de facto ban through county ordinances. Over 49 million Americans live in communities that have passed plastic bag bans or fees.
U.S. cities with bag bans include San Francisco (as of 2007), Portland (2011), Seattle (2012), Austin (2013), Los Angeles (2014), Dallas (to begin in 2015), and Chicago (2015).
The plastics industry has spent millions of dollars to challenge plastic bag ordinances.
Washington, D.C., was the first U.S. city to require food and alcohol retailers to charge customers 5¢ for each plastic or paper bag. Proceeds are shared between stores and environmental clean-ups.
Ten years ago peak oil was assumed to be a rather straight forward, transparent process. What was then thought of as “oil” production was going to stop growing around the middle of the last decade.
Shortages were going to occur; prices were going to rise; demand was going to drop; economies would falter; and eventually a major economic depression was going to occur. Fortunately or not, depending on your point of view, the last ten years have turned out to a lot more complicated than expected. Production of what is now known as “conventional” oil did indeed peak back around 2005, and many of the phenomena that were expected to result did occur and continue to this day.
Oil prices have climbed several-fold from where they were in the early years of the last decade – surging upwards from $20 a barrel to circa $100. This rapid jump in energy costs did slow many nations’ economies, cut oil consumption, and with some other factors set off a “great” recession. Real economic hardships have not yet occurred
What is so interesting about all this is that a temporary surge in what was heretofore a little known source of oil in the U.S. is masking the larger story of what is taking place in the global oil situation
Much of this is due to the reaction that set in from high oil prices and increased government intervention into the economy. In the case of the U.S., Washington turned on the modern day equivalent of the printing presses and began handing out money that was used to develop expensive sources of oil and gas. The high selling price per barrel, coupled with cheap money led to a boom in U.S. oil production where fortuitous geological conditions in North Dakota and South Texas allowed the production of shale oil at money-making prices provided oil prices stay high.
U.S. unconventional oil production soared by some 3.3 million barrels a day (b/d) in the last four years, and, if the US Energy Information Administration is correct, is due to climb by another million b/d or so in 2015. While this jump in production was unexpected by most, it was just another phenomenon resulting from unprecedentedly high oil prices, which in turn resulted from the lack of adequate “conventional” oil production. As is well known, economic development can have major reactions and feedbacks
What is so interesting about all this is that a temporary surge in what was heretofore a little known source of oil in the U.S. is masking the larger story of what is taking place in the global oil situation. The simple answer is that except for the U.S. shale oil surge almost no increase in oil production is taking place around the world. No other country as yet has gotten significant amounts of shale oil or gas into production. Russia’s conventional oil production seems to be peaking at present, and its Arctic oil production is still many years, or perhaps even decades, away. Brazilian production is going nowhere at the minute, deepwater production in the Gulf of Mexico is stagnating and the Middle East is busy killing itself. On top of all this, global demand for oil continues to increase by some million b/d each year – most of which is going to Asia.
If we step back and acknowledge that the shale oil phenomenon will be over in a couple of years and that oil production is dropping in the rest of the world, then we have to expect that the remainder of the peak oil story will play out shortly. The impact of shrinking global oil production, which is been on hold for nearly a decade, will appear. Prices will go much higher, this time with lowered expectations that more oil will be produced as prices go higher. The great recession, which has never really gone away for most, will return with renewed vigor and all that it implies.
An additional factor which has grown considerably worse in the last ten years is climate change, largely brought about by the combustion of fossil fuels. We are already seeing global weather anomalies with record high and low temperatures and record floods as well as droughts. This too will take its toll on economic development as mitigating this change will soon become enormously expensive. We are already seeing migrations of restive peoples. Thousands are dying in efforts to get from the Middle East and Africa into the EU. Millions are already homeless across the Middle East and recent developments foretell hundreds of thousands if not millions more being added to ranks of refugees as decades and even centuries-old political arrangements collapse.
All this is telling us that the peak oil crisis we have been watching for the last ten years has not gone away, but is turning out to be a more prolonged event than previous believed. Many do not believe that peak oil is really happening as they read daily of surging oil production and falling oil prices. Rarely do they hear that another shoe has yet to drop and that much worse in terms of oil shortages, higher prices and interrupted economic growth is just ahead.
We are sitting in the eye of the peak oil crisis and few recognize it. Five years from now, it should be apparent to all. More
Perhaps you’ve seen one of the recent barrage of articles claiming that fears of an imminent peak and decline in world oil production have either been dispelled (because we actually have plenty of oil) or are misplaced (because climate change is the only environmental problem we should be concerned with). I’m not buying either argument.
Richard Heinberg
Why? Let’s start with the common assertion that oil supplies are sufficiently abundant so that a peak in production is many years or decades away. Everyone agrees that planet Earth still holds plenty of petroleum or petroleum-like resources: that’s the kernel of truth at the heart of most attempted peak-oil debunkery. However, extracting and delivering those resources at an affordable price is becoming a bigger challenge year by year. For the oil industry, costs of production have rocketed; they’re currently soaring at a rate of about 10 percent annually. Producers need very high oil prices to justify going after the resources that remain—tight oil from source rocks, Arctic oil, ultra-deepwater oil, and bitumen. But oil prices have already risen to the point where many users of petroleum just can’t afford to pay more. The US economyhas a habit of responding to oil price hikes by swooning into recession, and during the shift from $20 per barrel oil to $100 per barrel oil (which occurred between 2002 and 2011), the economies of most industrialized countries began to shudder and stall. What would be their response to a sustained oil price of $150 or $200? We may never know: it remains to be seen whether the world can afford to pay what will be required for oil producers to continue wresting liquid hydrocarbons from the ground at current rates. While industry apologists who choose to focus only on the abundance of remaining petroleum resources claim that peak oil is rubbish, the market is telling Houston we have a problem.
Meanwhile some environmentalists have abandoned the subject of peak oil because they believe it’s just not relevant. For them, climate change is the only thing that matters. Society must deal with its collective carbon habit by going cold turkey on all fossil fuels. We can make the needed energy transition through the strategies of substitution and efficiency. Develop low-carbon energy sources (solar and wind, possibly nuclear), and use energy smarter! Electrify transport with battery-powered cars! Get with the program and stop wasting time on side issues!
Like the abundant-resource argument, this line of thinking proceeds from an unassailable premise. Anthropogenic climate change is indeed the nastiest, gnarliest environmental issue humanity has ever faced. The potential consequences stretch centuries or millennia into the future and imperil not just humanity, but thousands or millions of other species. But peak oil won’t go away just because it’s an inconvenient distraction from addressing that gargantuan issue. In fact, the two problems are closely linked and society will need to address both by way of a realistic, comprehensive strategy. I’ll get back to that point toward the end of this essay.
Is the necessary transition to renewable energy a simple matter of politics and regulation, as many climate campaigners seem to suggest? Hardly. Transitioning the electricity sector is a huge task in itself (the variability of wind and solar power implies soaring costs for energy storage, capacity redundancy, and grid upgrades once these sources start to provide a substantial portion of total electrical energy consumed). But liquid fuels pose an even bigger hurdle. Even the most advanced batteries do a poor job of storing energy when compared to oil; that’s why we’re unlikely ever to see electric airplanes, tractors, ships, 18-wheel trucks, or bulldozers. Some energy pundits tout compressed natural gas as a viable bridge fuel for transport, but that assumes sufficient availability and continued affordability of fracked shale gas—a prospect that seems highly unlikely in view of the results of Post Carbon Institute’s ongoing research into possible shale gas drilling locations and per-well production profiles. Hydrogen could be a niche fuel in some instances, but conversion from other energy sources (electricity or natural gas) to hydrogen implies energy losses, as does hydrogen storage. Further, if we were to make lots of H2 from water, using electricity, in order to fuel much of the transport sector, this would place an enormous extra burden on solar and wind, which already face a daunting job replacing coal and natural gas in the power generation sector.
How about energy efficiency? Good idea! We need to cut energy waste, and the folks at Rocky Mountain Institute have proposed many good ways of doing that. But, at the end of the day, efficiency is subject to the law of diminishing returns; so, while the tie between energy consumption and economic output is somewhat elastic, it cannot be severed. Specifically regarding oil: yes, many nations have reduced petroleum consumption in the last few years as a way of adapting to higher prices. But the fact that their economies have weakened suggests that efficiency gains have tended to lag behind oil price increases. Average vehicle fuel economy has improved, but not fast enough—so our main “efficiency” strategy has in reality simply been to travel less, and then deal with the withdrawal of economic benefits that cheap transport formerly provided.
None of this is trivial: oil is essential to the functioning of the modern industrial world. We use it for just about all transportation, which is key to trade. It’s also the fuel for construction, resource extraction (mining, fishing, forestry), and agriculture. Together, these sectors form the backbone of the real, physical economy of industrialized nations.
Again: the costs of oil production are rising and oil is stubbornly hard to substitute. As I argued in a recent book, this effectively spells the end of the historic period of rapid economic growth that began shortly after World War II. There is no way out; inevitably, society will become less mobile and—this should be cause for much greater concern—it will either produce less food or produce it in more labor-intensive ways.
Of course, peak oil and climate change aren’t the only looming challenges we should be concerned about. Economists rightly worry that the world is mired in far too much debt. Ecologists warn us about biodiversity loss, pervasive chemical pollution, and human overpopulation. Food system analysts try (usually in vain) to direct public attention toward the predicaments of topsoil degradation and depletion of aquifers from over-irrigation. Public health professionals caution us about the specter of pandemics as antibiotics lose effectiveness due to rapid microbial evolution. For city managers, the crumbling of water, sewerage, bridge, gas, and electricity grid infrastructure implies countless disasters just waiting to happen. I could go on. It’s all so overwhelming! Perhaps the only way to avoid crisis fatigue these days is simply to stop paying attention. But amid all these priorities and problems, peak oil refuses to die.
Those of us who insist on paying attention sooner or later get around to doing a form of mental triage. What are the worst crises that humanity faces over the long run? Which are the worst in the short term? What are the deeper issues, of which many problems are mere symptoms? This sorting process has led many systems thinkers to the conclusion that our species, in essence, faces an ecological dilemma of overpopulation, resource depletion, and environmental degradation resulting from a relatively brief period of rapid expansion enabled by a huge but temporary energy subsidy in the form of fossil fuels. We discovered buried treasure and went on a spending binge, adopting a way of life that cannot be supported long-term. Peak oil, climate change, mineral depletion, soil degradation, species loss, and the rest are justwords that blind men use to describe an elephant.
What we must do now is treat symptoms while keeping in mind the root disease, seeing why and how various crises are related. I have a couple of suggestions in this regard. One is that we begin to speak of peak oil and climate change as two sides of the same coin. The coin itself represents our reliance on fossil fuels and their unique energetic benefits. Both side-problems (the declining economic value of fossil fuels as they deplete, on one side, and the increasing environmental cost of burning them, on the other) demand that we reduce our fossil fuel dependency as rapidly as possible, even though that means sacrificing benefits we have come to depend on. If we maintain this holistic view of the situation, we’re more likely to understand that there is no way to keep eating our cake while having it too, either by continuing to burn fossil fuels of declining quality or by relying on new technology to fix what is actually an ecological problem. We can’t frack our way back to economic prosperity; nor can we unplug a coal plant, plug in a solar panel, and go on expanding population and consumption. We will have to adapt to the quantities and qualities of energy that are actually available from renewable sources alone, and that will mean changing the way we do just about everything.
Which brings me to the second, related suggestion. The constellation of challenges before us ensures that economic growth, as we have known it, is over, finished, kaput. That’s a terrible thing, in that the end of growth will almost certainly entail financial and political turbulence with real human casualties. But from the standpoint of diagnosis and treatment, it simplifies everything marvelously. If our impending crises stem from fossil-fueled expansion of population and consumption, their resolution surely starts with a coordinated, planned, and managed program of decarbonization and degrowth. We must reduce population and energy consumption from fossil fuels, while minimizing the human and environmental impacts of both past growth and the process of contraction. Easily said, not so easily done. But if civilization is to maintain itself in any recognizable form, this is what’s necessary. It would really help if those of us working at treating the various symptoms of the global meta-crisistogether acknowledged that growth is a core part of the underlying problem, not a solution, and that it is effectively over in any case.
Ignore peak oil (this could equally be said of climate change), and our view of the global problem-set immediately becomes distorted. We grasp at apparent solutions that turn out to be a useless waste of effort, or worse. Peak oil helps us understand what we’re faced with, and what we must do. It’s a gift wrapped in a curse. And it refuses to go away no matter how often it is pronounced dead.
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Democracy & Good Governance 