| Checking the Baseline |
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| Fossil Fuels - Oil |
| Tuesday, 02 September 2008 01:32 |
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To the relief of the residents of New Orleans and the entire Gulf Coast, Hurricane Gustav has been much less destructive than Katrina. Although the region"s oil & gas infrastructure appears largely intact, it"s a bit too soon to assess the full impact. In the interim, with the storm having momentarily displaced politics as the principal focus of the nation, this looks like a good opportunity to review the energy baseline from which the competing energy proposals of the two presidential candidates must take off. Contrary to the impression left by a remark in Hillary Clinton"s speech at last week"s Democratic Convention, that the last eight years have resulted in "less alternative energy", we have seen truly remarkable growth in this area. That"s not a tribute to the current administration, but to the emergence of alternative energy as an attractive investment sector, aided by high energy prices and by bi-partisan efforts in the Congress that pushed through two major energy bills in the last three years. Start with some macro-level figures. Between the last quarter of 2000 and the second quarter of 2008, the US economy grew by 18.7%, measured in terms of real (inflation-adjusted) gross domestic product. Consistent with recent energy efficiency trends, that economic growth pulled up energy demand, but at a somewhat slower rate. In the last seven years, total petroleum demand increased by 5%--not counting the roughly 4% drop so far this year, compared to the first six months of 2007--while US electricity consumption grew by a cumulative 9.6% through the end of last year. In spite of this growth in both the economy and energy consumption, US greenhouse gas emissions were essentially flat, at least through 2006, the latest year for which the national inventory report is complete. During that same period, electricity generated from renewable sources, excluding hydropower, grew by 27%, according to the Energy Information Agency. Within that, wind power generation grew by nearly 500%, as wind capacity expanded from 2,554 MW at the end of 2000 to 16,818 MW by the end of 2007--averaging annual growth above 30%. The growth of solar power has also been dramatic, with US shipments of photovoltaic modules growing more than tenfold. While the DOE figures indicate that grid-connected solar power is still under 500 MW, total US solar power installations are perhaps twice that large. In addition, geothermal power, though growing more slowly, produces roughly 20 times as much electricity as current photovoltaic capacity. Turning to liquid fuels, which are more relevant to the displacement of imported oil, ethanol and biodiesel have grown by equally impressive increments. Despite the emergence of concerns about competition between food and fuel, US ethanol production has quadrupled since 2000, growing at an annual average rate of 22%, with another 35% increase looking likely for this year alone. But as strong as that growth has been over the course of the current administration, ethanol this year will account for less than 7% of gasoline demand, with total biofuels supplying at most 3% of US liquid fuels demand. Fossil fuels still provide 72% of our electricity and 85% of our total energy consumption, and those figures have changed hardly at all since 2000. Displacing all fossil fuels in the next 10 years wouldn"t just be a stretch objective; it would be a practical impossibility, no matter how urgent that goal might seem to many. So as we approach the election and consider the energy proposals of Senators McCain and Obama and their respective parties, I believe we should evaluate them on the basis of which will be likelier to foster the continued rapid growth of wind, solar, biofuels and other forms of renewable energy, without prompting a collapse in conventional energy production or a spike in demand, either of which would overwhelm those efforts, because of the enormous difference in relative scales that still prevails. At the same time, the next administration must not merely hold greenhouse gas emissions at their present level, but begin to reduce them aggressively, in order to contribute to stabilizing atmospheric CO2 concentrations at a level that will stave off the worst effects of climate change. These are daunting challenges, and you should regard any suggestions that they can be addressed easily and painlessly with appropriate skepticism. |
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