Making the Transition from Oil
A friend from Germany writes: My boyfriend and I were discussing offshore drilling last night, he thinks this will gain momentum once oil prices go up. I am optimistic about renewables and a phasing out of fossil fuels within the next 20 years. As an energy expert, what are your thoughts about the future of offshore drilling in the USA? Thank you for your expert opinion!
What a great question.
Despite appearances to the contrary, our civilization is in the process of phasing out fossil fuels, according to the albeit vague time schedule I presented here.
The value of oil, obviously, is that it’s a transportable liquid with a high energy density, and thus 98% of energy for transportation currently derives from it. Transportation represents almost 40% of our total energy consumption, thus it’s extremely significant. Another fact to keep in mind: internal combustion engines have a horribly low efficiency; normally about 20% of the chemical energy in the fuel is converted into kinetic energy in the wheels; electric transportation by contrast, is about four times more efficient; charging batteries and discharging them through electric motors carries efficiencies in the 80s. The significance of this is that we can replace the approximately 1.1 billion cars and light-duty trucks on the world’s roads with an increase in less than 14% of our total electrical load.
Having said all this, what will happen as the prices of renewable energy continue to plummet and, God willing, our society starts to realize that fossil fuels have externalities that need to be captured? We really are starting to ask: Who’s going to pay to deal with climate change, ocean acidification, staggering rates of loss of biodiversity? The Harvard Medical School pegs the health-related cost of aromatics from coal plants at $750 billion/year in terms of dealing with the lung disease. Who’s going to pay for that? More than 4000 people die per day from this (mostly in China, but many here); will we figure all that suffering and death into the equation?
The answer would seem to be an abrupt migration away from oil into electric transportation, certainly over the next 20 years.
Of course, if these factors were the only ones affecting this calculus, we’d be much further along than we are now. However, behind the quickly developing technologies, the increasingly attractive economics of clean energy, not to mention the humanitarian issues, we have real-world politics. The oil companies virtually own our Congress in the US, and the entire geopolitical machine revolves around the notion that oil has to remain important indefinitely.
As a betting man, however, I think that oil is on its way out. There is no power on Earth, regardless of corruption and insensitivity to human welfare that can favor a commodity that has become more expensive that its competitor. This, I believe, is exactly what we’re seeing today and will continue to see over the next two decades.
Btw, this is the exact point I make in far greater detail in my most recent book: Bullish on Renewable Energy.
