I stumbled across this information graphic today. It provides a nice summary of the different paths to ending dependence on fossil fuels being pursued around the world. It might be interesting to study whether or not non-fossil fuel usage will emerge as a leading indicator of other good things — from economic to quality of life.
Today the New York Times website featured a story proclaiming “U.S. Military Orders Less Dependence on Fossil Fuels“
While reading the article, I found myself having a deja vu moment. For historical perspective, consider that the nuclear power industry was largely an outgrowth of the US Navy’s nuclear submarine program, and in particular, the vision of Admiral Hyman G. Rickover, the so-called “Father of the Nuclear Navy.” In fact, the very first commercial reactor in the US was at one time slated for use in a ship. But after the USSR announced its Obninsk nuclear reactor, instead of putting it to sea, they put it on a concrete pad in Shippingport, PA (for more on the transformation of nuclear technology from bombs into electricity, see Garud, Gehman & Karnoe, 2011).
If the past is prologue, perhaps the military’s latest moves will help stimulate a shift in energy technologies once again. A telling snipet from the article:
“There are a lot of profound reasons for doing this, but for us at the core it’s practical,” said Ray Mabus, the Navy secretary and a former ambassador to Saudi Arabia, who has said he wants 50 percent of the power for the Navy and Marines to come from renewable energy sources by 2020. That figure includes energy for bases as well as fuel for cars and ships. “Fossil fuel is the No. 1 thing we import to Afghanistan,” Mr. Mabus said, “and guarding that fuel is keeping the troops from doing what they were sent there to do, to fight or engage local people.”
If even the military recognizes that fossil fuels are standing in the way of combat, perhaps one day soon the rest of us will realize they are standing in the way of civilian life too.
Today I found this visual comparison of U.S. federal government subsidies to fossil fuels versus renewable energy. The underlying data came from a study by the Environmental Law Institute and the Woodrow Wilson International Center for Scholars which reviewed fossil fuel and renewable energy subsidies for Fiscal Years 2002-2008. The study concluded that “the lion’s share of energy subsidies supported energy sources that emit high levels of greenhouse gases.” A PDF of the graphic is available here.
In today’s New York Times, Thomas L. Friedman’s “Have a Nice Day” column highlights quite nicely the connection between uncertainty and the adoption of renewable technologies — in this case the adoption of solar energy technologies.
In particular, he argues that the solar panel industry is thriving in countries whose governments that have enacted policies aimed at overcoming the triple uncertainty threat:
- Regulatory uncertainty — “[A]ny business or homeowner can generate solar energy.”
- Connectivity uncertainty — “[I]f they decide to do so, the power utility has to connect them to the grid.”
- Price uncertainty — “[T]he utility has to buy the power for a predictable period at a price that is a no-brainer good deal for the family or business.”
Friedman reached these conclusions, in part, after touring the Applied Materials solar panel “war room” in Silicon Valley, from which it maintains “real-time global interaction with all 14 solar panel factories it’s built around the world in the last two years.” According to Mike Splinter, CEO of Applied Materials, “We are seeing the industrialization of the solar business. In the last 12 months, it has brought us $1.3 billion in revenues. It is hard to build a billion-dollar business.”
And yet because U.S. policies have not adequately addressed regulatory, connectivity and price uncertainties, all 14 factories of these solar panel factories have been built outside the U.S. As a result “[R]ight now, our federal and state subsidies for installing solar systems are largely paying for the cost of importing solar panels made in China, by Chinese workers, using hi-tech manufacturing equipment invented in America.”
Interestingly, Friedman points out that the debate over U.S. energy policies need not depend on competing beliefs about global warming. “[S]o, you don’t believe global warming is real. I do, but let’s assume it’s not. Here is what is indisputable: The world is on track to add another 2.5 billion people by 2050, and many will be aspiring to live American-like, high-energy lifestyles. In such a world, renewable energy — where the variable cost of your fuel, sun or wind, is zero — will be in huge demand.”
His point is worth exploring. To understand the magnitude involved in supplying electricity to 2.5 billion more people AND supplying them with more electricity per person, consider that in 2007 the world consumed 18,187 terawatt hours (TWh; 1 terawatt hour = 1 trillion watt hours) of electricity. That represented consumption of approximately 2,752 kWh for each of the world’s 6.6 billion people. However, consumption is far from evenly distributed. For example, OECD countries consumed an average of 8,477 kWh per capita, while China only consumed 2,346 kWh. Meanwhile in the U.S., average electricity consumption was 13,616 kWh per capita.
All of this means that electricity demand by 2030 is expected to increase nearly 50%. Perhaps not surprisingly, some have described energy as “the biggest challenge of the twenty-first century.” But those challenges also may make energy — already an estimated $6 trillion dollar industry worth about 1/10th of the world’s economic output — the “largest economic opportunity in the twenty-first century.”