From the archive - 1

I'll post some occasional articles from my dollarsperbbl.com website - https://www.dollarsperbbl.com to see which ones stand up to time. The reader can judge. This 2018 post is fiction - or ?

The Transition

Posted on August 29, 2018 by dollarsperbbl.com

“Nature doesn’t ask your permission; She has nothing to do with your wishes, or whether you like her laws or dislike them. You are bound to accept her as she is, and consequently all her conclusions.”   Fyodor Dostoevsky

Once there was a question

In 1992, in a popular US financial journal, the following question was posed, and a prize of $1,000 offered for the best answer:

“Today fossil fuels account for 85% of primary energy – what percentage will they account for in 25 years time, in 2017, and why?”

In addition, the journal offered a further prize of $5,000 to the most accurate answer, to be collected in June 2018 at a ceremony, should the contestant (and the journal) still be around.

The journal was still around in 2018 to honour its prize, as was the winning contestant.

In fact, she won both prizes.

The Answer

Here is a lightly edited summary of her original answer posted by the journal, in June 1992.

“I believe fossil fuels will still dominate the energy system, to more or less the same degree in 2017 – ie 85%

Why?

It is almost impossible for any other conceivable energy system to replace the current one to any significant level because it would have to satisfy the following requirements:

The basics – the absolute minimum requirements:
• It will need to be a established or near-established energy technology right now – already effective and proven at industrial scale, not just a laboratory idea.
• It will have to exhibit fast capacity growth (> 20%pa) over the 25 years to compete with the thermal system
• It will have to utilize as much of the existing energy system as possible – building out a parallel global infrastructure would not practical or economic
• It needs to be at least as economically effective as the current system, and preferably a lot cheaper
• It needs to provide technology solutions for all elements of the existing energy system: power, transport and heat management
• It needs to provide clearly superior solutions to the all of the fossil fuel system negative externalities: low efficiency, urban pollution, carbon emissions and geopolitical vulnerabilities

In addition, to provide further impetus for change, the new system will have to:

• Exhibit the potential for future cost / performance improvements far higher than the thermal system
• Be robust to competitive action from incumbent industries / governments or regions currently dominant in the thermal system
• Finally – and perhaps the largest challenge – be politically acceptable for regions and governments generally to allow fast adoption – ie provide employment and innovation opportunities that at least replace existing thermal ones with minimal investment or disruption as well as general environmental improvements

These criteria are not necessarily exhaustive, but they already provide an array of substantial barriers to any insurgent system. Others may arise.

And, even if such as system were to emerge say in a few years time, the underlying growth of global energy use at about 3% pa means that the new system would have to grow far quicker than this as a fraction of global energy to force the current system into negative growth or a “peak”.

None of this seems remotely likely.

As a statement of requirements to a prospective designer of a new energy system most of these conditions are obvious.

Even so, it should be clear that any new system would have to have a vast amount of capital, technology, resource, political support and employment and innovation potential behind it to achieve the majority of criteria – and perhaps still not meet the goal of a transition if the volatility of politics and policies weighed against it.

Failing any one of the base requirements would be highly problematic: failing two or more fatal.

If one proposed Nuclear to force fossil fuels backward for example, it fails on the growth and cost criteria already.

Even in Nuclear’s early growth phase in the 1980s it has still fallen short of the enhanced requirements on a global basis – which is likely why it is taking hold in certain countries such as France and Japan, but not generally.

I therefore expect future nuclear growth to remain flat: it’s unlikely to decline given the longevity of the installed base, but any upside remains remote.

Given the persistence of hydro and nuclear energy, there is limited upside for fossil fuels above 85%: but over a 25 year horizon, nothing is likely to eat into their dominant share. The upside is limited, as is the downside: I predict a constant 85% of the world energy system at least until 2017.

However, there is one caveat.

The only possible substitute on a material, global scale would be a totally different basis of energy production, not based on fuels at all, but on the nascent technologies of solar and wind power, aligned perhaps with massive electrification of the road transport system.

This would allow global energy production to access the vast potential of manufacturing learning curves on a global level, and pose a viable alternative to energise the installed infrastructure of transmission grids and passenger vehicles.

But as this would require investment equivalent to the thermal industry at least – $200-400bn per annum, beginning now, from a negligible level today – it is hence inconceivable.

Only a super-power such as the US, or perhaps China could even begin to consider such investment.

And absent a compelling reason to attempt a universal shift in energy structure, it is improbable either country will do so.

So, I stick by my prediction: 85% of primary energy from fossil fuels in 2017: there will never be better fuels for global energy. “

Most other entrants assumed fossil fuels would be far lower a percentage of the primary energy system by 2017, with nuclear, tidal, hydrogen and other technologies taking over.

Fashionable Theory X technologies were also popular, such as Cold fusion.

Wind and solar were also included, but not as the main threats.

The fuels vs technology distinction she majored on was barely mentioned by anyone else.

To read on here is the link to the original post.