Cal Poly State University, San Luis Obispo

State of the Planet:

Energy Resources and Global DevelopmentJeffrey Chow, Raymond J. Kopp, Paul R. Portney

EE 563 Graduate Seminar -Winter 2004Dr. Harris

Summary: Newlyn HuiCritique: Akihiro Oi

Date: 6 February, 2004

Cal Poly State University, San Luis Obispo

Energy Resources and Global Development• Abstract:

• The economic and environmental consequences are addressed by issues of availability and consumption of energy resources.

• Problems arise from dependence on combustible fuels.

• No primary energy source is free of environmental and economic limitations.

• Adoption of environmentally friendly energy technology are based on political and economic realties.

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Introduction

• Energy is the lifeblood of technological and economic development…

• Topics to Address:• Availability of Global Energy Resources• How and by whom the energy is used• Consequences of global distribution • Use of energy resources

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Availability of Global Resources

• World is not running out of mineral fuelsRecoverable reserves continue to increase keeping pace with consumption

• Facts: Recoverable Fossil Fuel Reserves• 1 Trillion Metric Tons of Coal• 150 Trillion Cubic Meters of GasMineral Resource Reserves• 3 Million Metric Tons of UraniumWorld Annual Consumption (Year 2000)• Coal – 0.5% of Reserves• Natural Gas – 1.6% of Reserves• Oil – 3% of Reserves• Uranium for Nuclear Electricity – 2% of Reserves

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Fossil Energy Reserve and Economic Development • Fossil fuel reserves are concentrated in small number

of countries• Half of low income countries and over a third of middle

income countries have no fossil fuel reserves• Access to international energy markets is a key to

economical development (such as Japan)

• Well-functioning socioeconomic system enables extraction and deployment of energy resources for social well being• Countries with corruption in energy production can not

enjoy its benefit

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Global Energy Resources

• Total global energy exceeds 370 Exa-joule per year equivalent to over 170 million of barrels of oil each day

• 95% of this energy are from fossil fuel• Primary Resources:

• 44% Petroleum• 26% Natural Gas• 25% Coal• 2.5% Hydroelectric Power• 2.4% Nuclear Power• 0.2% Non-hydro Renewable Energy

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Energy Use

• Applications:• Industry• Transportation• Agriculture• Commercial and Public Services• Residential

• Developing Countries: • 1.Residential 2.Industrial 3.Transportation

• Industrialized Countries: • 1.Transportation 2.Industrial 3.Residential

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Annual Energy per Capita

• Disparity between industrialized countries and developing countries in annual energy consumption• Industrialized country use 3-14 times more energy

than developing countries in any application• Developing Country: equivalent of 6 barrels of oil annually

per person• Industrialized Country: 40 barrels per person

• People of the poorest 10% of countries consume less than 1 barrel of oil equivalent per year per capita where the richest 10% consume over 60x as much

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Energy Use per Dollar of GDP

• Although individuals in higher-income countries consume substantially more energy than those in developing countries, higher-income countries are actually more efficient in terms of the energy intensity of GDP

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Dependence on Fossil Fuel

• Continued dependence on fossil fuel due to lack of convenient alternatives

• Transportation network brings higher demand in fossil fuel: • Developing countries only consume less than 3%

for transportation what the richest countries use

• Developing countries are expanding their transportation network

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Emissions from Fossil Fuel

• Between 1980 and 2001: • Energy consumption increase: petroleum (22%), coal (27%),

and natural gas (71%).• Emissions from fossil fuel: 5 bill. to 6.6 bill. metric ton of

carbon equivalent.• Emission of CO2 and other greenhouse gases

facilitate the formation of heat trapping troposphere ozone.

• Global climate change: Not only increased mean temperature but also more frequent extreme climate events bring consequences to the ecosystem, agriculture, and human welfare.

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Extraction of Fossil Energy

• Fossil fuel exploration require seismic testing and road building that can harm wildlife habitats.

• Replacement of habitat with infrastructure.• Oil spills, toxic byproducts onto local

environment.• Acid rain, smog, nitrogen loading from

releases from coals and petroleum combustion.

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Drawbacks of Alternative Energy• Hydroelectricity:

• Human settlement and terrestrial habitat.• Nuclear Power:

• Objections to waste disposal and weapons.• Wind-Powered Turbines:

• Installation of infrastructure and death of birds.• Wind, Solar, Geothermal Systems:

• Capital intensive, geographically limited, lack of power storage.

• Hydrogen Fuel Cell:• Requires need for fossil fuel as hydrogen fuel stock.

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Growing Concerns Drive Us toward Alternative Sources• Growing environmental concerns make shift

to alternative energy before scarcity becomes significant

• Policy Mechanisms:• Environmental Standards• Fuel and emission taxes• Subsidies for renewable energy production• Emission permit, trading schemes• Successfully implemented in U.S. to reduce non-carbon air

pollution, improve air quality and reduce acid rain

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Making Renewable Energy More Competitive in terms of Prices• By subsidizing renewable development, at

the same time, bringing them in the market by disadvantaging fossil fuels.

1. Adoption of a variety of R&D polices, such as subsidies, that would drive the price down and improve the performance of renewable over fossil fuel.

2. Raise the price of fossil fuels through carbon taxes or permits.

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Developing Countries are not Taking The Same Path• Cleaner energy efficient technology becomes

cheaper• Developing countries are adopting new

technologies by bypassing more wasteful and polluting ones • Examples:

• Smaller and less capital intensive micro-turbines and renewable sources rather than large centralized power plants

• More efficient High Voltage DC transmission lines

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Conclusion

• Transition to alternative energy resources comes:• When supply of fossil fuel will become too costly –

but this will probably not happen for the next 25 to 50 years

• Or if governments artificially increase fossil fuel prices

• The support for change only comes when societies and governments decide that the benefits of fossil fuel do not make up for their negative effects on the environment and human welfare

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Critiques

• Strengths of Arguments• Statistic Data• Analysis• Balanced Paper

• Weaknesses of Arguments• Paper Lacks Wider Perspectives • Is There a Third Path?

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Strengths of Arguments

• Statistic Data:• Up-to-date and good amount of statistic

data provided for energy consumption

• Balanced Paper:• Authors also discuss about drawbacks of

alternative energy• Authors take a neutral position and do not

overstep to advocate a particular stance

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Strengths of Arguments

• Good Analysis in:• World is not running out of fossil fuel• Projection of more fossil fuel demand by

expansion of transportation network in developing countries

• Bypassing of old technologies long used in industrialized countries and adoption of cleaner and more efficient ones

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Weaknesses of Arguments

• Is There a Third Path? (1)• Authors assert political and economic

realities are only driving forces for change• If this is true, dependence on fossil fuel will

continue for future; • because government policies are greatly

influenced by economic interests rather than environmental concerns

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Weaknesses of Arguments

• Is There a Third Path? (2)• Authors claim economical development is

necessary for transition of energy rescues • But what are negative impacts?• Can we enjoy continuous growth of economy?• How globalization impact us for energy?

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Weaknesses of Arguments

• Is There a Third Path? (3)• Consumers can be a driving force for

change?• Authors lack perspectives in terms of

conservation and recycle• Need to gear toward less energy consuming

society and social welfare • Such as Europe and Japan

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Questions

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Thank You