I observed with concern the somewhat simplistic, if not misleading, article in Gulf News on June 28, 2010, written by Sir Richard Branson.
Branson gives the impression that the world can easily shift from its current fossil fuel focus towards a renewable energy future swiftly, smoothly and at low cost. What he is in fact proposing would be a highly disruptive and expensive process unless delivered gradually as and when technological advances are made. At the same time he ignores the simplest, most scalable, affordable solution to meet the world's energy and carbon challenges quickly; natural gas.
While I wholeheartedly agree with the need to "power our ever developing world in a safe, reliable way" I fundamentally disagree with Branson's implicit assertion that alternative energies, particularly biofuels, wind and solar power, can deliver this future rapidly, at least in their current technological state.
The challenge
The scale of the energy challenge is immense: the world's 6.7 billion people consume daily about four times as much energy as that released by all the world's ocean tides each day, equivalent to some 220 million barrels of oil every day. 81 per cent of this energy is provided by fossil fuels: coal, oil and gas. Another 18 per cent is provided by nuclear, traditional subsistence biomass, and hydroelectric power; fuels where output growth is controversial or physically constrained.
Only 1.4 per cent is supplied by scalable alternative energies, i.e. wind, solar, wave, tidal and commercial biofuels. Hence, to achieve the energy transition Branson proposes, from fossil fuels to a low carbon future, these alternative energies will need to be scaled up by a factor of 50. Such a drastic change can only be achieved gradually and over many decades. For example in 1969 coal provided 32 per cent of global energy needs, but forty years later it still provides 29 per cent of energy needs despite being worse than all other fuels for emissions of particulates.
The success of biofuels in substituting for oil has been profoundly uninspiring. US and European authorities are realising the damage their biofuels policies are having on the world's rainforests, the world's largest and most effective natural carbon capture systems, and food supplies.
Such policies incentivise farmers to destroy valuable rainforest either to grow biofuel crops or food crops displaced by biofuel crops grown on existing arable land. Furthermore, biofuel land use is so inefficient that it actually reduces global food security disproportionately to the rate at which it improves oil security. For example in 2008 a policy research report by the World Bank concluded that biofuel production in the US and Europe had contributed to the sharp rise in global food prices between 2002 and 2008.
Finally, once the full chain carbon costs of biofuels are considered, many biofuels, such as corn-based ethanol, appear to offer at best negligible carbon emissions savings compared to the mineral oil they replace. A 2010 study by the University of Kassel estimated that biofuels displacing existing rangeland could lead to the loss of over 60,000 square kilometres of Amazonian rainforest in Brazil, in the period to 2020, as cattle farmers pushed deeper into the rainforest. This destruction of the rainforest would not only damage biodiversity but also negate any carbon savings from those biofuels in the first place.
Alternatives
If biofuels are a failure the other primary alternative energies, wind and solar, are similarly lacklustre in their impact and potential. Branson is correct to suggest that the biggest problem the alternative energy industry faces is scale. But the industry has shown time and time again that it cannot surmount this challenge.
In Germany, a country at the forefront of promoting alternative energies as part of government policy, only 1 per cent of primary energy demand is supplied from wind and solar despite a decade of official political and economic subsidy and many billions of pounds invested in new wind and solar capacity. If Germany cannot manage a convincing transition to alternative fuels it is unrealistic to expect such a wholesale shift in other developed countries let alone across the entire world in the short space of time Branson wants!
To achieve greater energy security and a lower carbon future in an affordable way the world must look at realistic solutions. Given that no effective substitute for oil has yet been found the best way to counteract the peak oil fears and carbon concerns Branson talks of is to:
1. Invest more into oil and gas exploration and production within a well regulated framework. This will ensure supply is maximised safely.
2. Invest more into energy saving measures, in the case of oil particularly in terms of automotive fuel efficiency. This will make oil and other energy supplies go further while at the same time limiting carbon emissions.
3. Recognise the key role natural gas can play in affordably cutting global carbon dioxide emissions and increasing global energy security. A 20 per cent consumption shift from oil to gas would provide the same benefit to the environment as quadrupling output from all alternative energy sources combined, while at the same time materially cutting global dependence on oil.
For Branson to ignore the potential for natural gas to form part of the solution is unfathomable.
He is ignoring a fuel which emits a third of the CO2 of the current US and European coal-fired power plant fleet when used in power generation. Switching the US and Europe's entire coal fleets off and replacing them with gas could save 2.2 billion tonnes of CO2 annually, allowing both regions to make 20 per cent reductions in their CO2 emissions, at about one third the full life cycle cost of using renewable fuels to do the same. He is ignoring a fuel which can be used to substitute for oil in heating and road transport sectors and even create oil products and aviation fuels via gas-to-liquids technology. He is ignoring a fuel which is abundant, geographically widespread and still being discovered in large quantities; ignoring a fuel which is already proven at scale and at a cost that is far below that of wind and solar.
Given these advantages natural gas should be the natural option.
The writer is Executive Director of Crescent Petroleum.
