2 What is this topic about? Energy is fundamental to our lives, and we often take it for grantedThis topic explores our energy supply, and asks challenging questions about itCan we continue to rely on fossil fuels, or do we need a radical switch in energy sources?Energy is very closely linked to climate change as fossil fuels (our main energy source) are the main source of greenhouse gas emissions.
3 Energy supply, demand and security The impacts of energy insecurity CONTENTSEnergy supply, demand and securityThe impacts of energy insecurityEnergy security and the futureClick on the information icon to jump to that section.Click on the home button to return to this contents page
4 1. Energy supply, demand and security There are a wide range of energy resources, with different security of supply and environmental issues:Non-renewableRenewableRecyclableA finite stock of resources, which will run outA flow of resources, which is infinite in human termsCan be used repeatedly, if managed carefullyCoal, oil, gas (plus oil shale, tar sands, lignite etc.)Wind, solar, hydroelectric, wave, tidal, geothermalBiomass, nuclear (with reprocessing of fuel)Significant environmental impacts during extraction (oil wells, opencast mines)Greenhouse gas emissions during use, and acidic emissionsMay require large areas (solar arrays, wind farms) for operation.NIMBY issues.Limited / no greenhouse emissions.Large land area needed for biomass.Largely unresolved issues of storing high level radioactive waste.
5 Life cycle analysisLife cycle analysis accounts for C02 emissions at all stages of the energy supply chain, not simply during use Comparing the environmental impact of different energy sources is a challengeLife cycle greenhouse emissions is one approachEven this does not account for NIMBY issues (e.g. windfarms), or the loss of ecosystems and biodiversity linked to extraction of fossil fuelsSome sources, such as nuclear and biomass are highly controversial and there is intense debate over their ‘green’ credentials.
6 Top 15 countries by oil, gas and coal reserves in 2008 Access to energyDirect access to fossil fuel reserves is a coincidence of geological history and international boundaries.Some countries find themselves with more fossil fuel sources than their needsOthers have noneReserves run down over time, as is the gas with the UK’s once abundant North Sea oil and gasRemaining oil and gas will increasingly concentrate in the Middle East over the next 30 years.Top 15 countries by oil, gas and coal reserves in 2008
7 Access to renewables UK renewable potential Most renewable energy is constrained by physical geography, and especially climateThis means its availability is place specificThe UK has significant renewable potential, especially wind, although it is a small country with limited land area; most HEP sites are already used.Many renewables are intermittent energy sources, so energy must be stored (very costly and technically difficult) or backed up by another sourceUK renewable potentialSourcePhysical limitationsWindRequires wind speeds of 8-25 mphSolar PVWorks best in areas of over 6 kwh per sq. metre per dayBiomassRequires large land area for feedstockHEPSuitable valleys i.e. long, deep and relatively narrow, and predictable water supply
8 Access to energyWhich energy sources are used is not simply a matter of which fossil fuels or renewable forms are available in a countryOther factors influence choice of energy sourcesCost is critical, as people are sensitive to energy sourcesNuclear power station construction ground to a standstill after the 1986 Chernobyl accident.TechnologyTechnology is required to drill, mine, process etc, and is not available everywhere e.g. LDCs.AttitudesPublic attitudes may be anti-nuclear, or NIMBYISM may block wind turbines or dams.CostWhile desirable, technologies like wave and hydrogen may be too expensive due to technical challenges.
9 Energy povertyLack of access to energy resources is common in the developing worldReliance of fuel wood, farm waste and dung is high and fossil fuel consumption lowUp to 40% of the world’s population rely on these sources as their primary cooking and heating fuelClose to 2 billion people have no access to electricityAccess to cheap, reliable energy is strongly related to development as so much of ‘modern’ life and industry depends on it.
10 DemandGlobal demand for energy has risen dramatically, especially since the 1960sDemand doubled between 1960 and 1980Growth in demand has been slower since 1980, but is projected to rise by up to 60% between 2002 and 2030 and continue upward.The BRIC countries, as well as other large developing nations (Mexico, Indonesia) have contributed to much to recent increases in demand and are likely to do so in the future.Further industrialisation inevitably brings demands for cars and consumer goods, all of which need power.
11 Domestic fossil fuel reserves Domestic renewable potential SecurityEnergy security depends on a number of factors (see table)Countries with a diverse energy ‘mix’ are less at risk than those relying on 1 or 2 sourcesRenewable potential could be used to offset declining fossil fuel reserves or supply interruptionsReliance on long distance international trade in fossil fuels may be riskyDemand and dependency are important too, as it is difficult to replace a large amount of oil with another energy source for instanceDomestic fossil fuel reservesCountries like Italy and Japan have few of their own resourcesDomestic renewable potentialSmall, crowded nations like Singapore and South Korea lack renewable potentialDomestic energy mixFrance relies heavily on nuclear power, and the UK on gas.Import pathwayriskThe UK imports gas from Russia and Qatar, both long distance pathways.
12 2. The impacts of energy insecurity Pathway disruptionPrice and payment disputesPiracy e.g. off the Somali coastTerrorism or conflict closing choke pointsPolitical discord between supplier and consumerDiversion of supply, perhaps for a higher priceTechnical interruption to productionProducer’s supply simply runs outNatural disasters e.g. hurricane KatrinaFossil fuel supply regions are poorly matched with areas of largest demandThis is especially true for oil and gasEnergy must flow along international pathways from producer to consumerThese are either pipelines (oil and gas), bulk carriers (coal, uranium), LNG tankers (gas) or oil tankers. Electricity is also exported / imported.Pathways could be disrupted, increasing energy insecurity.
13 Risks of disruptionGas pipeline disruption has already occurred, as disputes between Russia and Ukraine disrupted European gas supplies in 2006 and 2009Russia holds 25% of world gas reserves, the Middle East 40% (and 56% of oil)Disruption to narrow ocean choke points (see map) could seriously affect the flow of oilCountries close to some choke points are unstable (Iran, Somalia, Yemen)
14 Risks of disruptionThere are real risks if oil and gas supplies are disrupted.Any potential disruption is headline newsSo dependent are we on cheap, uninterrupted energy supplies that disruption could lead to:Soaring energy costs and rising energy povertyPressure on politicians to act; possibly rationing energyCivil disruptionRising costs for industry, job losses and recessionUnsound decisions (economically and environmentally) to rapidly develop alternative sourcesDiplomatic conflictUK energy disruptionOct 1973Oil crisis; petrol rationingSept 2000UK wide fuel protests over price and taxAug 2005Further UK protests; Hurricane Katrina pushes oil prices higherAug 2008Oil at $147 a barrelJan 2010National Grid ‘gas balancing alerts’ are headline news ; gas supply from Norway drops on technical problems
15 Environmental impacts Supply: new sourcesAs oil prices remain high, and fears of ‘peak oil and gas’ increase the search is on for new sources:ExampleSourceTechnical challengeEnvironmental impactsCanadian (Athabasca) tar sandsBitumen combined with sand / rock under boreal forests; close to surfaceMODERATEStrip mining or extraction by steam; gas is used to heat the sands and extract oil.HIGHEnergy intensive extraction and destruction of ecosystemsArctic oilConventional oil in fragile wilderness region, both on and offshoreLOWConventional drilling and extraction; Arctic oil has been taken from Prudhoe Bay for decades.Fragile environment but production has relatively small footprintWest of Shetland, Foinaven fieldConventional oil in deep ocean waterProduction began in 1997, but using ‘floating’ rigsLow risk of spills and limited impact on sea bedUSA (Green River) oil shaleBitumen encased in solid rockOpencast mining, then can be directly burnt or heated to drive off oil.Large areas mined, scarring landscape and energy intensive production
16 Viable alternatives?The chart below shows the estimates oil price required for each energy resource to be competitive with oil and gas without any form of State support or subsidySource: the FT 2009
17 Generators and Distributors PlayersThe diagram below summarises the role of some key players in the energy supplyEnergy PlayersGovernmentsNational energy mix; renewable policy; subsidies and grantsGenerators and DistributorsVital infrastructure (National Grid) and power stationsEnvironmentalistsPressure to adopt renewables and reduce carbon intensity; campaignsOPECKey role in the global oil price, by managing productionScientists, R&DResearch into alterative fuels and applications ; efficiency gainsEnergy TNCsExploration for reserves, exploitation and refining; distribution of oilConsumersOften highly price sensitive; can exert pressure on politicians.
18 Big oil: TNCs and OPEC ‘Supermajor’ TNCs State owned oil giants TotalFrSaudi AramcoSaudi ArabiaBPUKGazpromRussiaShellUK/NlCNPCChinaChevronUSAPetrobrasBrazilExxonMobilNOICIranConocoPhilipsPDVSAVenezuelaSupermajor and other oil and gas TNCs control most oil and gas extraction, refining and distribution.State owned oil companies own / control access to 95% of world oil and gas reservesOPEC is effectively a price control cartel, with considerable power.
19 3. Energy security and the future There are several key uncertainties relating to energy futures:Future demand is uncertain – it partly depends on future population and economic growthThe lifespan of fossil fuel reserves, especially oil, is unknownThe extent to which we exploit unconventional oil (see image)The extent and timing of switching from fossil fuel to renewables is uncertain.Peak oil and gas are important; after peak production prices can only rise.
20 The nuclear option?Opinion is divided over whether nuclear power is the answerIt provides about 15% of the world’s electricity, but only 2% of all energy needsThere are over 400 reactors in 30 countries, but few currently being builtAdvantagesDisadvantagesFuel sources (see map)Low life cycle carbon emissions.Constant power outputTakes up little space .Large power output per plantPublic distrust.High initial cost.Long build times.High level waste disposal.Fears of terrorism.Nuclear proliferation.Technically challenging
21 Future biofuels might not use food crops: Biofuels have the advantage of being flexible liquidsAs such they can replace diesel (biodiesel) and petrol (bio-ethanol)However, they require food crops as feedstocks (sugar cane, maize etc)This means land that could be used for food.In explosive growth of biofuel crop area was blamed for pushing up global food pricesBiofuels are not carbon neutral, because of the energy used in farming, transport and refining.Future biofuels might not use food crops:1st generation – food crops2nd generation – crop wastes3rd generation – algae
22 GeopoliticsThere are a number of sources of tension, both present and future, related to energy security and the threat of insecurity:ScenarioExplanationConsequencesOil hits $100Sustained oil price of over $100 per barrel, for several years.Prolonged economic recession and rising fuel poverty in OECD countriesMiddle East meltdownTensions in the Gulf escalate into war between Muslim factions; possibly involving Iran, Iraq, Israel, Syria, Turkey and others.Interruption of oil and gas flows; rising prices; tension between China and USA to secure oil supplyThe nuclear optionWholesale shifting towards nuclear to replace fossil fuels, leads to global spread of nuclear power and technologyPower stations become ‘soft targets’ for terrorism; enriched uranium and depleted plutonium get into the wrong hands….Energy superpowersThe Gulf States hold 60%+ of oil reserves and Russia/Qatar/ Iran 60%+ of gas; the world has not shifted to renewables.Energy superpowers begin to ‘name their price’ and take care of their friends; major geopolitical shiftsArctic attackCanada, Russia, USA and EU begin to exploit the Arctic for oil and gas, but without clear delineation of territorial areas.A war or words over who has the right to exploit what, quickly becomes a new cold war – possibly a hot one……
23 Future challengesWhat are our energy challenges in 2010? There are some that are obvious:Reduce dependency on fossil fuels to increase energy securityIncrease renewable energy use as fossil fuels become more expensive / peakReduce greenhouse gas emissionsIncrease access to energy in developing nationsMix it upWind, solar and others can be used to diversify energy sources.This would increase security, but could also reduce greenhouse emissions.Technology for allAid could be used to help developing nations grow their renewable sectorsIntermediate technology is key to this.They need energy, but without greenhouse emissions.Tax it downGreen taxes i.e. taxing fossil fuel use, could encourage efficiencyGreenhouse emissions would fall as efficiency risesThe dirtiest fuels could be taxed the most.Self generationHomes can generate renewable energy using ground source heat pumps, micro-wind and solar PV / thermalThis would diversify the energy mix, reduce emissions and increase self-reliance.