The future of energy
11/01/2005
Is the world running out of oil? Will there be enough fuel available as China and India rapidly industrialize?
These are very important questions for policymakers across the globe. At Semicon West, there were warnings that polysilicon shortages appear likely as solar power installations, particularly in Germany and Japan, eat into the available wafer supply. At the International Electron Devices Meeting last December, Richard Smalley of Rice U., Nobel Prize winner in chemistry for his pioneering work on carbon fullerenes, or buckyballs, presented an analysis showing that even using optimistic numbers, the world will fall far short of the energy needed to supply projected population growth and industrialization over the next 50 years. Recently, rapidly rising prices for oil, natural gas, and gasoline have given a wake-up call to the general public as well as industry and business worldwide.
Analysts have been all over the map in interpreting the spike in energy prices. Some blame OPEC and other suppliers for not stepping up production to meet growing demand. Some say supplies are adequate, but speculation is driving up prices. Refining capacity is the real culprit, say still others, and if we made it easier to build refineries the problem would go away.
All of them make useful points, but unfortunately a narrow view of a complex situation leads to confusion. Is the world running out of oil?
There is actually a major debate going on over this point, essentially between geologists and economists. Some geologists insist we will soon pass the peak in production since we have pumped out much of the easy oil while it gets steadily tougher to find new reserves. Economists point out that while such dire predictions have been made for years, secondary and tertiary production has increased supply, and deep water drilling capability greatly expands potential new finds. Higher prices will drive more exploration and foster new extraction technology, for existing wells as well as from other sources such as shale and tar sands, they believe. It will also encourage far more energy efficiency. Meanwhile, Saudi Arabia claims it has far more oil than its listed reserves and plans to soon significantly boost its daily pumping capacity. Saudi officials claim that when they recently offered extra oil to the market, there were no buyers.
Some in the oil industry, such as T. Boone Pickens, one-time feared corporate raider, counter that all this may be true, but the thirst for oil will grow too fast for economic pressures to create alternatives. Dr. Smalley shares this view, saying he is trying to convince President George W. Bush to provide leadership in tackling this coming global energy crunch. Joining the chorus is a new book by James Howard Kunstler, The Long Emergency: Surviving the Converging Catastrophes of the 21st Century. His doomsday scenario predicts that as the oil runs out the US will break into isolated regions with deserted suburbs.
Are we that inept at dealing with change? Potential solutions are already taking shape, often with the leadership of oil companies, which are doing research and investing in alternative energies, such as photovoltaics. We recently visited Denmark, which produced 32% of its electrical power last year from wind power. Vestus Nikron, a Danish company, makes about 40% of the world’s windmills, according to our guide. While there are cars, there are few traffic jams because there is a 180% tax on new cars, plus 25% VAT. Everyone has three bikes, our guide explained, showing the huge rackful of bikes at the train station (it helps that the highest point in Denmark is only 177 meters above sea level). There are public racks where you can rent a bike for a 20 krone coin, which is returned when you put it in a rack at your destination. In Germany solar panels are everywhere, on homes, farms, apartment buildings and offices. Installation costs are paid back over 10 years, using funds from incremental increases in utility electricity. Some states in the US are studying similar programs.
If we can track Moore’s Law for over 40 years in spite of what seemed to be one impossible hurdle after another, it seems like we ought to be able to handle whatever comes along. Let’s hope we can do it peacefully.
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Robert Haavind
Editorial Director