Page 1 of 2 US energy crunch comes home
By Michael T Klare
Of all the challenges facing Barack Obama when he takes over as US president
next January, none is likely to prove as daunting, or important to the future
of this nation, as that of energy. After all, energy policy - so totally
mishandled by the outgoing administration of George W Bush and Dick Cheney -
figures in each of the major challenges facing the new president, including the
economy, the environment, foreign policy, and our Middle Eastern wars. Most of
all, it will prove a monumental challenge because the United States faces an
energy crisis of unprecedented magnitude that is getting worse by the day.
The US needs energy - lots of it. Day in and day out, this country, with only
5% of the world's population, consumes one quarter of the world's total energy
supply. About 40% of our energy comes
from oil: some 20 million barrels, or 840 million gallons a day. Another 23%
comes from coal, and a similar percentage from natural gas. Providing all this
energy to American consumers and businesses, even in an economic downturn,
remains a Herculean task, and will only grow more so in the years ahead.
Addressing the environmental consequences of consuming fossil fuels at such
levels, all emitting climate-altering greenhouse gases, only makes this
equation more intimidating.
As Obama faces our energy problem, he will have to address three overarching
challenges:
1. The United States relies excessively on oil to supply its energy needs at a
time when the future availability of petroleum is increasingly in question;
2. Our most abundant domestic source of fuel, coal, is the greatest emitter of
greenhouse gases when consumed in the current manner;
3. No other source of energy, including natural gas, nuclear power, biofuels,
wind power, and solar power is currently capable of supplanting our oil and
coal consumption, even if a decision is made to reduce their importance in our
energy mix.
This, then, is the essence of Obama's energy dilemma. Let's take a closer look
at each of its key components.
Excessive reliance on oil
No other major power relies on getting so much of its energy from oil. Making
that 40% figure especially daunting is this: the world supply of oil is about
to contract. The competition for remaining supplies will then intensify, while
most of what remains is located in inherently unstable regions, threatening to
lead the US into unceasing oil wars.
Just how much of the world's untapped oil supply remains to be exploited, and
how quickly we will reach a peak of sustainable daily world oil output, are
matters of some contention, but recently the scope of debate on this question
has narrowed appreciably.
Most energy experts now believe that we have consumed approximately half of the
planet's original petroleum inheritance and are very close to a peak in
production. No one knows whether it will arrive in 2010, 2012, 2015, or beyond,
but it is certainly near. In addition, most energy professionals now believe
that global oil output will peak at far lower levels than only recently
imagined - perhaps 90-95 million barrels per day, not the 115-125 million
barrels once projected by the US Department of Energy. (Here I'm speaking only
of conventional, liquid petroleum; there are some "unconventional" sources of
oil - Canadian tar sands, Venezuelan extra-heavy crude, and the like - that may
boost these numbers by a few millions of barrels per day, without altering the
global energy equation significantly.)
What underlies these more pessimistic assumptions? To begin with, the depletion
rate of existing fields is accelerating. Most of the giant fields on which the
world now relies for the bulk of its oil supplies were discovered 30 to 60
years ago and are now reaching the end of their productive life cycles.
It used to be thought that the depletion rate of these fields was about 4% to
5% a year, but in a study scheduled for release on November 12, the
International Energy Agency (IEA), an affiliate of the Organization for
Economic Cooperation and Development (the club of wealthy industrialized
nations), was expected to report that the decline rate is closer to 9%, an
astonishingly high figure. At this rate of decline, the world's major fields
will be depleted of their remaining supplies of oil relatively quickly, leaving
us dependent on a constellation of smaller, less productive fields, often
located in difficult to reach or unstable areas, as well as whatever new
deposits the oil industry is able to locate and develop.
And this is the second big problem: Despite huge increases in the funds devoted
to exploration, the oil companies are not finding giant new fields comparable
with the "elephants" discovered in previous decades. Only two such fields were
discovered between 1970 and 1990, and only one since - the Kashagan field in
Kazakhstan's corner of the Caspian Sea. True, the companies have discovered
some large fields in the deep waters off the Gulf of Mexico and the coasts of
Angola and Brazil, but these are neither on a par with the largest fields now
in production nor anywhere near as easy to bring on line. They will not be able
to reverse the coming decline in global output.
Given these factors, it is clear that the global supply of oil is destined to
begin contracting in the not too distant future, and that the global peak in
production - when it does arrive - will be at a level much lower than
previously assumed. The current global economic downturn and the sudden fall in
energy prices may, for a while, mask this phenomenon, but they won't change it
in any significant way.
Our excessive reliance on oil in good times and bad is made all the more
problematic by the fact that, just as supplies are dwindling, global demand is
expected to rise mainly because of increased consumption in China, India, and
other developing nations.
As recently as 1990, the developing nations of Asia accounted for only a
relatively small 10% of global oil consumption. Their economic growth and has
been so rapid, however, that they now consume about 18% of the world's supply
of oil. If current trends persist, that will rise to 27% in 2030, exceeding
North American net consumption for the first time. This means - if energy
habits and present energy use don't change radically - that Americans will be
competing with Chinese and Indian consumers for every barrel of spare oil
available on world markets, driving up prices and jeopardizing the health of
our petroleum-dependent economy.
To make matters worse, more and more of the world's remaining oil production
will be concentrated in the Middle East, Central Asia, and sub-Saharan Africa.
That these areas are chronically unstable is hardly accidental: many bear the
scars of colonialism or are delineated by borders drawn up by the colonial
powers that bear no resemblance to often fractious ethnic realities on the
ground. Many also suffer from the "resource curse": the concentration of power
in the hands of venal elites that seek to monopolize the collection of oil
revenues by denying rights to the rest of the population, thereby inviting
revolts, coups, and energy sabotage of every sort.
As it has grown more reliant on oil deliveries from these areas, the United
States has attempted to enhance its energy "security" by an increasing reliance
on military force, even though such efforts have largely proved ineffectual.
Despite all the money and effort devoted to enforcement of what was once known
as the Carter Doctrine - which stated that the uninterrupted flow of Persian
Gulf oil to the United States is a vital national interest to be protected by
any means necessary, including military force - the Persian Gulf is no more
stable or peaceful today than it was in 1980, when president Jimmy Carter
issued his famous decree.
Our over-reliance on oil, then, is our greatest energy vulnerability. But what
are the alternatives?
The problem with coal
The energy source which the United States possesses in greatest abundance is
coal. The US has the world's largest reserves, 247 billion metric tons, and is
second only to China in using the fuel. In the US, coal is primarily employed
to produce electricity, but it can also be converted into a diesel fuel - known
as coal-to-liquids or CTL - to power cars and trucks. Although CTL, widely used
by Germany during World War II to power its war machine, is still in its
infancy in the US , it could conceivably be used to supplement future declining
gas supplies.
When coal is burned in the conventional manner, however, it emits more
climate-altering greenhouse gases than any other fossil fuel - twice as much as
natural gas and one-and-a-half times that of oil to produce the same amount of
energy. As a result, any increase in our reliance on coal will lead to ever
greater emissions of carbon dioxide, only accelerating the already perilous
rate of global warming.
In addition, an increased US reliance on coal would only flash a green light to
China, India, and other countries eager to do likewise. The bottom line? Any
hope of reversing the buildup of greenhouse gases in the atmosphere in time to
avert the most severe consequences of climate change would go out the window.
During the recent election campaign, Obama and his Republican rival John McCain
both spoke of speeding up the development of "clean coal technology". In the
present context, however, clean coal is a deceptive term, if not an outright
misnomer. It generally refers to pollution-free coal, not to coal free of
carbon emissions.
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