Chapter 1 Energy economics and policy

Rise and Fall of Empires Based Primarily on Human and Animal Power

Wood as an Industrial Fuel

Spanish Armada Brought on a Wood Crisis in England

Glass Making and Metallurgy Resulted in a First Energy Crisis

Coal at Newcastle Solved the Energy Crisis

Newcomen Saved Coal Mining from Drowning and Launched Industrial Revolution

Unintended Consequences─Air Pollution Greenhouse Gases, NOx, SOx, Metals Need for a Public Policy to Address Issue

Basic Unit for Measuring Energy─British Thermal Unit (Btu) Quad is one quadrillion Btu or 1015 Btu World consumption about 500 quad US consumption about 100 quad

A Btu is approximately the heat produced by burning a wooden match Definition of Btu A Btu is defined as amount of heat (energy) required to raise the temperature of 1 pound (0.454 kg) of liquid water by 1°F (0.556°C) at a constant pressure of one atmosphere (14.7 pounds per square inch) Variations in the definition of a Btu mostly based on different water temperatures A Btu is approximately the heat produced by burning a wooden match

A therm is 100,000 or 105 Btu mmBtu represents one million or 106 Btu A quad (quadrillion) is 1,000 trillion or 1015 Btu or 1,000,000,000,000,000 Btu A stack of one trillion dollar bills (no air spaces) is nearly 70,000 miles high─about one-quarter of the way to the moon A stack of one quadrillion dollar bills— well it’s quite high (70 million miles)—about the distance from the sun to venus

Converting Mtoe to Quads 1 Mtoe = 39.7 trillion Btu 1000 Mtoe = 39.7 quadrillion Btu or quad 1 quad = 25.2 Mtoe 1965 total energy consumption in UK of 196.7 Mtoe is equivalent to 7.8 quad 1965 total world energy consumption of 3,813 Mtoe is 151.4 quad 2010 total world energy consumption of 12,928 Mtoe is 513 quad Of which US 91 quads China 118 quads

Oil 74.2 2.94 Gas 0.7 0.03 Coal 117.4 4.66 Nuclear 3.4* 0.13 Hydro 1965 UK Mtoe Quads Oil 74.2 2.94 Gas 0.7 0.03 Coal 117.4 4.66 Nuclear 3.4* 0.13 Hydro 1.0* 0.04 Total MTOE 196.7 7.81 *This is the amount of fossil fuel that would have to be burned to generate the same amount of electricity by nuclear and hydro assuming a 38% efficiency in converting thermal energy to electricity

Replacing Traditional Energy Sources with Renewables Figure 1.1 Replacing Traditional Energy Sources with Renewables Will Take Three Decades Minimum

Distribution of Energy Sources for Japan over Time Table 1.1 Distribution of Energy Sources for Japan over Time Wood Coal Oil Nat Gas Hydro Nuclear 1880 85% 14% 1% 1900 39% 57% 4% 1940 10% 66% 8% 16% 1970 22% 71% 6% 0% 1990 18% 5% 2010 23% 43% 17% 13%

Oil crisis in the 1970s was the shot across the bow, but we did essentially nothing for 40 years If energy transitions take decades—shown below for US— it will take great determination for renewables to become significant

Growth of Major Sources of Energy (Quads) Figure 1.2 Growth of Major Sources of Energy (Quads)

Cumulative Distribution of Major Sources of Energy Figure 1.3 Cumulative Distribution of Major Sources of Energy

Percentage Distribution of Global Energy Consumption Figure 1.4 Percentage Distribution of Global Energy Consumption

Comparative Percentage Reliance on Energy for China and US Figure 1.5 Comparative Percentage Reliance on Energy for China and US

Estimated US Energy Use in 2014: ~98.3 Quads Figure 1.6 Estimated US Energy Use in 2014: ~98.3 Quads

Global Energy Status and Projections

A Model to Project Energy Demand Global energy consumption = a + b1*GDP per Capita + b2*Energy per Capita + b3*Population (millions)

World Population in Billions Figure 1.7 World Population in Billions

12 children plus 6 stillborns and no heir to the throne Queen Anne of England 12 children plus 6 stillborns and no heir to the throne

Actual and Projected Annual Growth Rates and Increments to Population Figure 1.8 Actual and Projected Annual Growth Rates and Increments to Population

Per Capita Energy Consumption (Toe) Figure 1.9 Per Capita Energy Consumption (Toe)

Living Beyond One’s Means Adds to GDP

Per Capita Economic Activity Before 1800 Figure 1.10 Per Capita Economic Activity Before 1800

Per Capita Economic Activity Post-1800 Figure 1.11 Per Capita Economic Activity Post-1800

Per Capita Economic Activity in Constant GK$ Figure 1.12 Per Capita Economic Activity in Constant GK$

Global Energy Demand Projection (mmToe) Figure 1.13 Global Energy Demand Projection (mmToe)

History of Energy Consumption

Some say nineteenth century was for coal and twentieth century for oil Not true—coal still is a very important source of energy Coal + oil over two-third of total energy sources

End of Chapter 1