Rarely does the release of a data-driven
report on energy trends trigger front-page
headlines around the world. That, however, is
exactly what happened on November 12 when the
prestigious Paris-based International Energy
Agency (IEA) released this year's edition of its
World Energy Outlook. In the process, just about
everyone missed its real news, which should have
set off alarm bells across the planet.
Claiming that advances in drilling
technology were producing an upsurge in North
American energy output, World Energy Outlook
predicted that the United States would overtake
Saudi Arabia and Russia to become the planet's
leading oil producer by 2020. "North America is at
the forefront of a sweeping transformation in oil
and gas production that will affect all regions of
the world," declared IEA executive director Maria
van der Hoeven in a widely
quoted statement.
In the US, the prediction of imminent
supremacy in the oil-output sweepstakes was
generally greeted with unabashed jubilation. "This
is a remarkable change," said John Larson of IHS,
a corporate research firm. "It's truly
transformative. It's fundamentally changing the
energy outlook for this country." Not only will
this result in a diminished reliance on imported
oil, he indicated, but also generate vast numbers
of new jobs. "This is about jobs. You know, it's
about blue-collar jobs. These are good jobs."
The editors of the Wall Street Journal
were no less ecstatic. In an editorial with the
eye-catching headline "Saudi America," they lauded
US energy companies for bringing about a
technological revolution, largely based on the
utilization of hydraulic fracturing ("fracking")
to extract oil and gas from shale rock. That, they
claimed, was what made a new mega-energy boom
possible. "This is a real energy revolution," the
Journal noted, "even if it's far from the
renewable energy dreamland of so many government
subsidies and mandates."
Other
commentaries were similarly focused on the US
outpacing Saudi Arabia and Russia, even if some
questioned whether the benefits would be as great
as advertised or obtainable at an acceptable cost
to the environment.
While agreeing that
the expected spurt in US production is mostly
"good news", Michael A Levi of the Council on
Foreign Relations warned that gas prices will not
drop significantly because oil is a global
commodity and those prices are largely set by
international market forces. "[T]he US may be
slightly more protected, but it doesn't give you
the energy independence some people claim," he
told the New York Times.
Some observers
focused on whether increased output and job
creation could possibly outweigh the harm that the
exploitation of extreme energy resources like
fracked oil or Canadian tar sands was sure to do
to the environment. Daniel J Weiss of the Center
for American Progress, for example, warned of a
growing threat to America's water supply from
poorly regulated fracking operations. "In
addition, oil companies want to open up areas off
the northern coast of Alaska in the Arctic Ocean,
where they are not prepared to address a major oil
blowout or spill like we had in the Gulf of
Mexico."
Such a focus certainly offered a
timely reminder of how important oil remains to
the American economy (and political culture), but
it stole attention away from other aspects of the
World Energy Report that were, in some cases,
downright scary. Its portrait of our global energy
future should have dampened enthusiasm everywhere,
focusing as it did on an uncertain future energy
supply, excessive reliance on fossil fuels,
inadequate investment in renewables, and an
increasingly hot, erratic, and dangerous climate.
Here are some of the most worrisome takeaways from
the report.
Shrinking world oil
supply Given the hullabaloo about rising
energy production in the US, you would think that
the IEA report was loaded with good news about the
world's future oil supply. No such luck. In fact,
on a close reading anyone who has the slightest
familiarity with world oil dynamics should
shudder, as its overall emphasis is on decline and
uncertainty.
Take US oil production
surpassing Saudi Arabia's and Russia's. Sounds
great, doesn't it? Here's the catch: previous
editions of the IEA report and the International
Energy Outlook, its equivalent from the US
Department of Energy (DoE), rested their claims
about a growing future global oil supply on the
assumption that those two countries would far
surpass US output. Yet the US will pull ahead of
them in the 2020s only because, the IEA now
asserts, their output is going to fall, not rise
as previously assumed.
This is one hidden
surprise in the report that's gone unnoticed.
According to the DoE's 2011 projections, Saudi
production was expected to rise to 13.9 million
barrels per day in 2025, and Russian output to
12.2 million barrels, jointly providing much of
the world's added petroleum supply; the United
States, in this calculation, would reach the 11.7
million barrel mark.
The IEA's latest
revision of those figures suggests that US
production will indeed rise, as expected, to about
11 million barrels per day in 2025, but that Saudi
output will unexpectedly fall to about 10.6
million barrels and Russian to 9.7 million
barrels. The US, that is, will essentially become
number one by default. At best, then, the global
oil supply is not going to grow appreciably -
despite the IEA's projection of a significant
upswing in international demand.
But wait,
suggests the IEA, there's still one wild card hope
out there: Iraq. Yes, Iraq. In the belief that the
Iraqis will somehow overcome their sectarian
differences, attain a high level of internal
stability, establish a legal framework for oil
production, and secure the necessary investment
and technical support, the IEA predicts that its
output will jump from 3.4 million barrels per day
this year to 8 million barrels in 2035, adding an
extra 4.6 million barrels to the global supply.
In fact, claims the IEA, this gain would
represent half the total increase in world oil
production over the next 25 years. Certainly,
stranger things have happened, but for the obvious
reasons, it remains an implausible scenario.
Add all this together - declining output
from Russia and Saudi Arabia, continuing strife in
Iraq, uncertain results elsewhere - and you get
insufficient oil in the 2020s and 2030s to meet
anticipated world demand. From a global warming
perspective that may be good news, but
economically, without a massive increase in
investment in alternate energy sources, the
outlook is grim.
You don't know what bad
times are until you don't have enough energy to
run the machinery of civilization. As suggested by
the IEA, "Much is riding on Iraq's success ...
Without this supply growth from Iraq, oil markets
would be set for difficult times."
Continuing reliance on fossil
fuels For all the talk of the need to
increase reliance on renewable sources of energy,
fossil fuels - coal, oil, and natural gas - will
continue to provide most of the additional energy
supplies needed to satisfy soaring world demand.
"Taking all new developments and policies into
account," the IEA reported, "the world is still
failing to put the global energy system onto a
more sustainable path." In fact, recent
developments seem to favor greater fossil-fuel
reliance.
In the United States, for
instance, the increased extraction of oil and gas
from shale formations has largely silenced calls
for government investment in renewable technology.
In its editorial on the IEA report, for example,
the Wall Street Journal ridiculed such investment.
It had, the Journal's writers suggested, now
become unnecessary due to the Saudi Arabian-style
oil and gas boom to come. "Historians will one day
marvel that so much political and financial
capital was invested in a [failed] green-energy
revolution at the very moment a fossil fuel
revolution was aborning," they declared.
One aspect of this energy "revolution"
deserves special attention. The growing
availability of cheap natural gas, thanks to
hydro-fracking, has already reduced the use of
coal as a fuel for electrical power plants in the
United States. This would seem to be an obvious
environmental plus, since gas produces less
climate-altering carbon dioxide than does coal.
Unfortunately, coal output and its use haven't
diminished: American producers have simply
increased their coal exports to Asia and Europe.
In fact, US coal exports are expected to reach as
high as 133 million tons in 2012, overtaking an
export record set in 1981.
Despite its
deleterious effects on the environment, coal
remains popular in countries seeking to increase
their electricity output and promote economic
development. Shockingly, according to the IEA, it
supplied nearly half of the increase in global
energy consumption over the last decade, growing
faster than renewables. And the agency predicts
that coal will continue its rise in the decades
ahead. The world's top coal consumer, China, will
burn ever more of it until 2020, when demand is
finally expected to level off. India's usage will
rise without cessation, with that country
overtaking the US as the number two consumer
around 2025.
In many regions, notes the
IEA report, the continued dominance of fossil
fuels is sustained by government policies. In the
developing world, countries commonly subsidize
energy consumption, selling transportation,
cooking, and heating fuels at below-market rates.
In this way, they hope to buffer their populations
from rising commodity costs and so protect their
regimes from popular unrest. Cutting back on such
subsidies can prove dangerous, as in Jordan where
a recent government decision to raise fuel prices
led to widespread riots and calls for the
monarchy's abolition. In 2011, such subsidies
amounted to $523 billion globally, says the IEA,
up almost 30% from 2010 and six times greater than
subsidies for renewable energy.
No hope
for averting catastrophic climate change Of
all the findings in the 2012 edition of the World
Energy Outlook, the one that merits the greatest
international attention is the one that received
the least. Even if governments take vigorous steps
to curb greenhouse gas emissions, the report
concluded, the continuing increase in fossil fuel
consumption will result in "a long-term average
global temperature increase of 3.6 degrees C".
This should stop everyone in their tracks.
Most scientists believe that an increase of 2
degrees Celsius is about all the planet can
accommodate without unimaginably catastrophic
consequences: sea-level increases that will wipe
out many coastal cities, persistent droughts that
will destroy farmland on which hundreds of
millions of people depend for their survival, the
collapse of vital ecosystems, and far more. An
increase of 3.6 degrees C essentially suggests the
end of human civilization as we know it.
To put this in context, human activity has
already warmed the planet by about 0.8 degrees C -
enough to produce severe droughts around the
world, trigger or intensify intense storms like
Hurricane Sandy, and drastically reduce the Arctic
ice cap. "Given those impacts," writes noted
environmental author and activist Bill McKibben,
"many scientists have come to think that two
degrees is far too lenient a target."
Among those cited by McKibben is Kerry
Emanuel of Massachusetts Institute of Technology,
a leading authority on hurricanes. "Any number
much above one degree involves a gamble," Emanuel
writes, "and the odds become less and less
favorable as the temperature goes up." Thomas
Lovejoy, once the World Bank's chief biodiversity
adviser, puts it this way: "If we're seeing what
we're seeing today at 0.8 degrees Celsius, two
degrees is simply too much."
At this
point, it's hard even to imagine what a planet
that's hotter by 3.6 degrees Celsius would be
like, though some climate-change scholars and
prophets - like former Vice President Al Gore in
An Inconvenient Truth - have tried. In all
likelihood, the Greenland and Antarctica ice
sheets would melt entirely, raising sea levels by
several dozen feet and completely inundating
coastal cities like New York and Shanghai. Large
parts of Africa, Central Asia, the Middle East,
and the American Southwest would be rendered
uninhabitable thanks to lack of water and
desertification, while wildfires of a sort that we
can't imagine today would consume the parched
forests of the temperate latitudes.
In a
report that leads with the "good news" of
impending US oil supremacy, to calmly suggest that
the world is headed for that 3.6 degree Celsius
mark is like placing a thermonuclear bomb in a
gaudily wrapped Christmas present. In fact, the
"good news" is really the bad news; the energy
industry's ability to boost production of oil,
coal, and natural gas in North America is feeding
a global surge in demand for these commodities,
ensuring ever higher levels of carbon emissions.
As long as these trends persist - and the
IEA report provides no evidence that they will be
reversed in the coming years - we are all in a
race to see who gets to the Apocalypse first.
Michael Klare is a professor of
peace and world security studies at Hampshire
College, a TomDispatch
regular, and the author, most recently, of
The
Race for What's Left(Metropolitan Books).
A documentary movie based on his book Blood
and Oil can be previewed and ordered at
www.bloodandoilmovie.com. You can follow Klare on
Facebook by clicking here.
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