By Dean Carroll
Fears of imminent peak oil may have subsided but demand for fossil fuels from emerging economies is growing at an exponential rate. The environmental alarmists, who predict war and systemic collapse, may yet have their day. For, the rise of renewables is just too slow to keep pace with the spiralling energy demands from future superpowers like China and India.
On the day that Hugo Chavez, the president of oil-rich Venezuela, died last May the World Economic Forum has published a report on the future of energy transition. It suggested that while oil demand has ratcheted up another level, the thirst for coal is also a major factor. In fact, in the last decade demand for coal grew at 10 times the rate of demand for renewables, twice that of oil and three times more than gas.
Green campaigners will be concerned at the devotion to coal among emerging nations. It is cheap, dirty and hugely polluting. Meanwhile, Western economies are involved in another dash for gas – shale gas this time around. Wind, solar and other non-hydro renewable resources still only provide 1.6 per cent of total world energy. More than 90 per cent of global energy demand is met by oil, coal, gas and nuclear energy. The figures do not lie, the required investment and planning necessary to aid the transition to renewables is just not there.
Even so, WEF head of energy Roberto Bocca remained positive. “The general assumption is that we will gravitate towards a world dominated by renewables,” he said. “Surprisingly though, this transition will be different than in the past where the energy mix moved from one fuel to another, like from wood to coal. What we’ll see in the future instead will be a transition from some energy sources to many energy sources.”
The WEF report written in collaboration with IHS Cambridge Energy Research Associates, certainly details some of the long-term questions that politicians – focused on five-year electoral cycles – are failing to grasp despite the defence and security risks. “Transitions in the energy industry unfold over decades, owing to the large scale of the industry and the size and longevity of the infrastructure involved,” explained Daniel Yergin, IHS vice-chairman. “However, shifts in the energy mix will have direct consequences for all participants in the world’s energy industry – incumbents, new entrants and innovators, governments and, of course, for all society.”
History tells us that the energy transitions from wood to coal to oil and the rise of electric power were accompanied by sweeping societal changes in terms of technology and the economy. Many wars were also fought along the way. We know not how the path to renewables will play out yet. Although it is about time we attempted to at least get on that path with some long-term thinking. If not, the green mafia could well be right – we may risk an energy crunch, systemic collapse and military conflict. Come on politicians; raise your sights above the ballot box before we all have to pay the price.
Dean Carroll is editor of Policy Review. Follow him on Twitter @poljourno and follow Policy Review @Policyrev