An Unprecedented Challenge

An Unprecedented Challenge:
Climate, Energy Poverty, Reliable Electricity and Economic Aspirations

Developing countries need surges of energy to meet their economic development needs and to alleviate energy poverty—they don’t need an approach based predominantly on trickle-down renewables and the hope that energy storage technology will eventually mature to stand up intermittent resources. Meeting these challenges at the scale of billions of people is unprecedented and will require more energy-dense resources…not less…and these countries deserve the chance to deploy the technological resources to meet these needs. As such, try as we may to squeeze additional drops of CO2 out of the U.S. economy, if what we do doesn’t transfer to India and other developing countries, all bets are off and everybody loses for generations to come. Moreover, if we believe we can meet this unprecedented challenge without nuclear power and other carbon-reducing technologies, we’re ignoring the numbers, we’re fooling ourselves and we’re doing a grave injustice to billions of people in this world.

At the 6th Annual Energy Policy Research Conference, EPRC6, held in Santa Fe, New Mexico, September 8-9, I gave a presentation to try and highlight the gravity of our global energy challenge—that being the unprecedented task that faces the world as we try to reduce global carbon emissions while simultaneously alleviating energy and economic poverty. I made no grand assumptions regarding the potential for renewables and did no predictive modeling of power grids based on multiple scenarios of various levels of renewables penetration, energy efficiency, tax credits, feed-in tariffs, cap-and-trade schemes, etc. I used only existing data (BP Statistical Review 2016, World Bank, and U.S. Bureau of Economic Analysis) to draw conclusions based on trends, trajectories and what I believe to be the realities associated with the hopes and dreams of economic development in countries weighed down by poverty. I based the analysis on the world’s top 15 GDP countries but focused on the U.S., China, and India. A general summary of that presentation follows with all figures and data tables appended at the end.

Data
The data are broken down into primary energy consumption, fossil fuel consumption (oil, natural gas and coal), CO2 emissions, electricity generation and zero-carbon energy consumption and analyzed for the two most recent years (2014-2015), the 15-year period from 2001-2015, the 15-year period from 1986-2000 and the overall period of 1965-2015. In the case of electricity generation, the overall period is 1985-2015. The two 15-year periods generally coincide with Russian Federation data (1985-present) and the beginning of China’s tremendous economic growth (2000-present).

Energy Consumption (Figures 1-4; Tables 1 & 2)
Primary Energy: Currently, China is the largest consumer of primary energy in the world, having surpassed the U.S. in 2009 whereas India surpassed Russia in 2015 and is now the world’s third largest consumer behind China and the U.S. [Figure 1]. While consumption in China and India is increasing, U.S. consumption is generally flat and is currently at 1999-2000 levels [Figure 1]. The combined increased consumption of 77.9 Mtoe by China and India from 2014-2015 constituted 62% of the global net increase (126.7 Mtoe) [Table 2]. India’s 2014-2015 increase was about the same as the primary energy reductions in the U.S., Mexico, Brazil, and Japan, combined [Table 2]. Of India’s 34.3 Mtoe increase from 2014-2015, 97% of this increase is from oil and coal [Table 2].
Oil: Consumption in China is increasing substantially as its 33 Mtoe increase from 2014-2015 constitutes 41.4% of the global net increase and its overall consumption is 65.7% of U.S. consumption [Figure 2; Table 2].
Coal: U.S. consumption is trending downward, having decreased 12.7% from 2014-2015 [Figure 3; Table 2]. China has perhaps peaked, but consumed 4.8 times that of the U.S. in 2015 [Figure 3]. India’s coal consumption is trending upward and its 18.6 Mtoe increase from 2014-2015 constitutes over 50% of India’s net increase in primary energy consumption of 34.3 Mtoe [Tables 1& 2]. Coal consumption in India (407 Mtoe) has surpassed that of the U.S. (396 Mtoe) [Tables 1 & 2].
Natural Gas: The U.S. has shifted upward in natural gas consumption, primarily offsetting coal in power generation [Figure 4]. China has recently begun increasing its natural gas consumption [Figure 4]. India’s natural gas consumption is stagnant [Figure 4].

15-Year Periods: 1986-2000; 2001-2015 (Figures 5-11)
Analysis of the two most recent 15-year periods provide some indication as to whether a country’s rate of change in consumption is increasing, decreasing or is negative from the first 15-year period to the second. In all categories, China’s rate of consumption increased substantially (2.6 times for oil; 15.2 times for natural gas; 4.3 times for coal; 4.8 times for electricity). India’s rate of consumption also increased across all categories, particularly with respect to coal where the 2001-2015 rate increased 2.8 times over that of 1986-2000. In the U.S., rates of consumption for all categories decreased over the two periods, except for oil and gas where rates of consumption shifted from increasing to negative. Rates of increase for the remaining 12 countries also decreased over the two periods, with the exception being coal consumption, which went from a decrease during 1986-2000 to a slight increase during 2001-2015.
The general trends for energy consumption hold true for CO2 emissions during the two time periods. The rate of change in global CO2 emissions more than doubled, China’s emission rate quadrupled, and India’s rate more than doubled. For the other 12 countries combined, the rate was 6 times less but still slightly positive. However, in the U.S., the rate of change in CO2 emissions shifted from a positive to a negative.

Carbon Emissions, Fossil Fuels and Zero Carbon Energy (Figures 12-17)
The global endeavor to reduce carbon emissions generally revolves around reducing fossil fuel consumption and increasing low- or zero-carbon energy (i.e., renewables and nuclear). U.S. reductions in carbon since 2006 can be largely attributed to a decrease in oil consumption and a shift from coal-based power generation to natural gas (Figure 12). Also from 2006-2015, nuclear and hydro remained flat in the U.S. whereas solar and wind grew somewhat (Figure 13). In China, carbon emissions appear to have plateaued from 2013-2015, which was accompanied by a decrease in coal consumption and increases in hydro, nuclear, solar and wind (Figures 14-15). In India, the story is quite different as carbon emissions continue to increase in spite of continued increases in solar and wind (Figures 16-17). Hydro has increased, albeit sporadically, and nuclear has had a couple of growth periods but is now generally flat. The point here is that renewables appear to be having limited impact on carbon emissions as India is choosing to go with coal; therefore, carbon emissions are tracking coal consumption.
It’s important to note here that increased natural gas consumption in the U.S. has a fundamentally different impact on CO2 emissions (net decrease due to an offset in coal) compared with increased natural gas consumption in China and India (net increase in CO2 if it doesn’t offset coal). U.S. reduction in carbon is only a drop in the bucket compared with China’s impact over the past 30 years and the potential impact of a developing India. China has recently begun increasing its natural gas consumption whereas India’s natural gas consumption is flat, but is very likely to engage soon. While natural gas is the better option when compared with coal, it remains an addition to overall carbon emissions rather than a subtraction as is the case in the U.S.

Economic Development and Initial Conditions (Figures 18-19)
Imagine a population of about 33 million people, seemingly unlimited natural resources and limited environmental regulations within an economic and government environment that allows economic efficiencies to, at times, develop into monopolies. That would represent the U.S. in the mid to late 1800s. Now, imagine a population of 1.3 billion people, 300 million of whom live in poverty, constrained natural resources, and environmental regulations that extend not only to a country’s borders but also the entire planet, all within an economic and government structure struggling to become a viable partner in an ever-expanding global economy. This would be India—today. While the U.S. experience is quite unique, other countries have established and developed their respective economies similarly. France, Australia, Japan and, more currently, China did so with broad economic latitude to develop their economies as efficiently as possible and with limited environmental constraints. The U.S., France, Australia and Japan, among other countries, followed a classic economic development pattern where the respective industrial sectors are initially a substantial part of the value added to GDP but steadily decrease as the industrial base and infrastructure are established and the service sector becomes dominant. China has experienced similar development, albeit at a more rapid pace, and, having established its industrial base, appears to be transitioning to a service economy. India is quite distinct and is working to establish its industrial base and its infrastructure. However, this will be a challenge for India for several reasons.
In its analysis brief on India, the Energy Information Administration identified fiscal deficits, infrastructure deficiencies, delays in structural reforms and global energy price volatility as some of the current risks to economic growth in India. The analysis also pointed out that highly regulated fuel prices, a complex regulatory environment, inconsistent energy sector reform, and fuel subsidies shouldered by the government and state-owned upstream companies present particular challenges to meeting the country’s growing energy demand. These embedded political, social and infrastructure constraints combine with the pervasive problem of hundreds of million living in economic and energy poverty to present an unprecedented challenge to modern society. With all this said, well-developed economies have a foundational energy system that can accommodate a certain level of experimentation and tinkering, particularly with respect to power generation and the integration of renewables, but countries such as India have a completely different set of initial conditions, economically and demographically, and they can’t afford to experiment with their power generation system

Policy Proposal: A Medical Analogy
In the medical field, physicians generally follow up an examination with a prognosis and a diagnosis followed by therapy to alleviate symptoms and address the illness. In the case of global energy and emissions, the prognosis is: “We have a global CO2 issue.” Not just a U.S. CO2 emissions issue—a global emissions issue. The diagnosis is: “Earth’s climate may change with potentially severe consequences—some being more severe for those populations most vulnerable.” It’s at the point of prescribing therapy where beliefs and opinions sharply diverge with renewables on one side and traditional fuels on the other.
In general, we should commit the lion’s share of attention and resources on areas where the problem is growing (i.e., China) and, more prevalently, where the problem is about to grow (i.e., India and other developing countries). Less focus should be on regions where emissions have stabilized and are decreasing (i.e., the U.S.). This is not to preclude the U.S. from reducing its emissions; rather, it is to leverage and orient technological efforts in the U.S. to the development of new generation technologies that can be incorporated into developing countries and optimize economic development with low-carbon technologies and efficient energy system strategies. This should include renewables with storage, advanced nuclear, small modular reactors, natural gas combined cycle, and carbon capture & storage. If indeed India continues its upward trend in coal and natural gas consumption, and if our chief concern is CO2 emissions and global climate, then we’re only fooling ourselves if we believe that we can stem the tide of increased carbon emissions without nuclear and carbon capture and storage technologies. The U.S. and other countries have developed their economies on energy-dense resources and it is our ethical and environmental responsibility to the billions of people living in energy poverty to focus on developing technologies that will allow them to develop likewise. Moreover, straining additional drops of CO2 from the U.S. economy through the incorporation of renewables will likely have limited impact in the shadows of increased emissions from developing nations.

SUMMARY COMMENTS
Reducing CO2 in a developed economy is one thing, but 1.3 billion people in this world live without access to electricity while 2.6 billion depend on wood or other biomass, including animal dung, for heating and cooking. In India alone, with a population of 1.31 billion, 300 million live below the poverty level and 700 million live without human dignity. These initial conditions for India’s economic development are a distant cry from those of the U.S. and other developed economies and, consequently, what works in the U.S. doesn’t necessarily translate to the economic and human context of life for billions of others. In fact, we’ve never faced such a daunting task under the carbon constraints we’re currently facing.
There is no precedent for establishing, growing and developing a modern industrial economy without energy-dense resources; i.e., fossil fuels and nuclear. Moreover, countries such as the U.S., the UK, France, Japan, Germany, and China leveraged fossil fuels and nuclear with limited regulatory constraints and broad latitude for resource exploitation as they established their industrial sectors. As such, these countries have matured to the extent that they now have the capacity to experiment with incorporating renewables into their power generation systems because of their coal, natural gas, and nuclear energy resource buffer. While industrialized countries should continue carbon reduction strategies, if India’s plight isn’t addressed, India’s CO2 emissions will continue to nullify reductions in other countries.

Developing countries need surges of energy to meet their economic development needs and to alleviate energy poverty—they don’t need an approach based predominantly on trickle-down renewables and the hope that energy storage technology will eventually mature to stand up intermittent resources. Meeting these challenges at the scale of billions of people is unprecedented and will require more energy-dense resources…not less…and these countries deserve the chance to deploy the technological resources to meet these needs. As such, try as we may to squeeze additional drops of CO2 out of the U.S. economy, if what we do doesn’t transfer to India and other developing countries, all bets are off and everybody loses for generations to come. Moreover, if we believe we can meet this unprecedented challenge without nuclear power and other carbon-reducing technologies, we’re ignoring the numbers, we’re fooling ourselves and we’re doing a grave injustice to billions of people in this world.

…ilyh…

Table 1. Energy Consumption by Resource for 2015table-1-energy-consumption-by-resource-2015

Table 2. Change in Energy Consumption by Resource: 2014-2015 table-2-energy-consumption-change-2014-2015

Figure 1. Primary Energy Consumption: 1965-2015figure-1-primary-energy-consumption-trend-all-countries

Figure 2. Oil Consumption: 1965-2015figure-2-oil-consumption-trend-figure

Figure 3. Coal Consumption: 1965-2015figure-3-coal-consumption-trend-figure

Figure 4. Natural Gas Consumption: 1965-2015figure-4-natural-gas-consumption-trend-figure

Figure 5. CO2 Emissions: 1965-2015figure-5-co2-emissions-trend-all-countries

Figure 6. Change in Primary Energy Consumption: 1986-2000; 2001-2015figure-6-primary-energy-15-year-periods

Figure 7. Change in Oil Consumption: 1986-2000; 2001-2015figure-7-oil-consumption-15-year-periods

Figure 8. Change in Coal Consumption: 1986-2000; 2001-2015figure-8-coal-consumption-15-year-periods

Figure 9. Change in Natural Gas Consumption: 1986-2000; 2001-2015figure-9-natural-gas-consumption-15-year-periods

Figure 10. Change in Electricity Generation: 1986-2000; 2001-2015figure-10-electricity-generation-15-year-periods

Figure 11. Change in CO2 Emissions: 1986-2000; 2001-2015figure-11-co2-emissions-15-year-periods

Figure 12. U.S. CO2 Emissions and Fossil Fuels (1965-2015)figure-12-us-co2-and-fossils

Figure 13. U.S. CO2 Emissions and Zero Carbon Fuels (1965-2015)figure-13-us-co2-and-zero-carbon

Figure 14. China CO2 Emissions and Fossil Fuels (1965-2015)figure-14-china-co2-and-fossils

Figure 15. China CO2 Emissions and Zero Carbon Fuels (1965-2015)figure-17-india-co2-and-zero-carbon

Figure 16. India CO2 Emissions and Fossil Fuels (1965-2015)figure-16-india-co2-and-fossils

Figure 17. India CO2 Emissions and Zero Carbon Fuels (1965-2015)figure-17-india-co2-and-zero-carbon

Figure 18. Sector Share of GDP for U.S., France, Australia & Japanfigure-19-us-france-australie-japan-gdp

Figure 19. Sector Share of GDP for China & Indiafigure-18-china-india-gdp

 

 

…ilyh…

 

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4 thoughts on “An Unprecedented Challenge”

  1. No truer words can be said. Thank you for proving them.

    “Developing countries need surges of energy to meet their economic development needs and to alleviate energy poverty—they don’t need an approach based predominantly on trickle-down renewables and the hope that energy storage technology will eventually mature to stand up intermittent resources. Meeting these challenges at the scale of billions of people is unprecedented and will require more energy-dense resources…not less…and these countries deserve the chance to deploy the technological resources to meet these needs. As such, try as we may to squeeze additional drops of CO2 out of the U.S. economy, if what we do doesn’t transfer to India and other developing countries, all bets are off and everybody loses for generations to come. Moreover,* if we believe we can meet this unprecedented challenge without nuclear power and other carbon-reducing technologies, we’re ignoring the numbers, we’re fooling ourselves and we’re doing a grave injustice to billions of people in this world.*”

    Liked by 1 person

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