The energy mix
The Energy Mix Faces New Energy Challenges
To meet growing energy needs while preserving the environment, societies have to put in place a varied energy mix over the long term, with reduced greenhouse gas emissions. Combined with energy savings, this technological and political development is also the key to a more secure energy supply.
Ensuring Economic Growth while Accounting for Environmental Issues
Societies develop thanks to the ongoing growth of the supply and demand of goods and services. Against a backdrop of globalization, this process extends to emerging and developing countries. In China, India, and Brazil, a new middle class is gradually emerging; and they want the same modern conveniences that are already widespread in Europe and North America (such as household appliances and personal vehicles).
This economic growth goes hand in hand with growing energy needs on a global scale, most of which are met by fossil fuels. However, these energy sources are getting scarcer and it is not possible to increase oil, gas or coal production capacity indefinitely.
Furthermore, using fossil fuels engenders significant greenhouse gas (GHG) emissions. According to the IPCC (Intergovernmental Panel on Climate Change), 75% of the CO2 emitted by humans between 1981 and 2001 came from burning of oil, gas, and coal1; and these greenhouse gases play a key role in the current global warming. Therefore, to ensure human development while preserving the environment, we need to diversify our global energy mix in the 21st century. This change will involve using alternative energy sources with few greenhouse gas emissions. Adopting the energy and climate change package in Europe is a part of this approach. It is an action plan whereby the EU commits to meeting 20% of its energy needs through renewable energy by 2020, compared to 8.5% in 20082.
As we diversify, we also need to save available energy and optimize its use.
However, global energy needs are so high that this is not enough to reduce energy demand on its own, but will only slow down its growth.
Various Policies to Match Energy Supply and Demand
In the next few years, humanity will have to meet a dual energy challenge.
• In the medium term (within 15 to 20 years), oil supply will begin to taper off while demand continues to grow.
• In the long term, after 2050, fossil fuels will diminish, starting with oil, followed by gas about twenty years later. At this stage, we have enough coal to last about twenty years.
To meet these challenges, we need to make significant investments. Consequently, political and economic stakeholders have to make choices, including diversifying and decarbonizing the energy mix (developing energy sources with a low carbon footprint). They have developed a number of ways to match energy supply to demand. Some methods are compatible, and even complementary, and all have advantages and disadvantages.
• The United States and Australia consume a lot of domestic energy resources. The United States is largely dependent on oil. To preserve its energy independence, it is trying to reduce energy consumption and encourage renewable energy development. On the whole, this approach will allow people to retain their lifestyle for another few decades, sparing them the upheaval associated with changes in the way society operates.
• The energy and climate change package adopted by Europe in late 2008 and the measures set forth in the Kyoto protocol also aim to control demand. By anticipating shortages, these policies can soften their effects- reducing energy consumption prolongs the life span of fossil fuels. This gives governments the time to develop alternative resources to fully replace oil in the energy mix over the longer term. Moreover, these measures help reduce greenhouse gas emissions. However, they require citizens to agree to take part in efforts to save energy by changing their lifestyles in terms of transportation, housing, and everyday life.
• Whatever their policies, most rich and emerging countries encourage the development of alternative energies (nuclear and renewable). Apart from their environmental qualities (no greenhouse gas emissions), these types of energy help delay the depletion of fossil fuels. However, current research is not yet at a stage where they can replace oil entirely. In the future, nuclear energy is one of the more promising alternative energy sources. Nuclear fusion could provide an almost inexhaustible energy supply. But these technologies are very expensive and very difficult to control; and they will not be part of the energy mix before 2050.
Security of Energy Supply
During the 20th century, oil became a strategic resource, indispensable to running our economies and societies. However, oil and gas supply is subject to geopolitical issues - a tense international situation can block energy feedstock trading.
For Western countries, the most recent oil shortage dates back to the first oil crisis of the 1970s. The Yom Kippur War between Israel and Arab countries broke out in October 1973. Arab countries decided to impose an oil embargo on Israel's allies (the United States, Portugal, the Netherlands, South Africa, and Rhodesia). The embargo was lifted in July 1974. It failed because the main oil companies- which control crude oil supplies worldwide- were able to share the shortage out between all industrialized countries.
Thus, in the last few decades, industrialized countries have become used to having lots of cheap oil and gas. Alternative energy seemed expensive in comparison. With the globalization of the world economy, emerging and developing countries have also become highly dependent on the energy supplied by hydrocarbon-producing countries, which belong to two main groups.
• Rich in oil and gas deposits, the Middle East is a patchwork of people, religions, and political regimes with a complex history. The risk of conflicts in this region is high but it has some stability factors, such as OPEC (Organization of the Petroleum Exporting Countries). This organization plays an important role in managing oil production worldwide and stabilizing crude prices.
• Russia and countries bordering the Caspian Sea (Kazakhstan and Turkmenistan) can supply Europe and Eastern Asia. However, trade is partly dependent on Russia's goodwill. The construction of the Baku-Tbilisi-Ceyhan (BTC) pipeline linking the Caspian Sea to the Mediterranean put an end to this virtual monopoly. States in the region now sell their oil directly to European countries.
Oil and gas can also be found in South America, Canada, and in the Niger Delta in Africa. These hydrocarbons mostly supply the United States, but also China. Finally, some North African oil and gas is sent to European countries.
Hydroelectric dams can cause tensions if located on large rivers that cross several countries. For example, Syria and Iraq are protesting against the current Turkish project to build 22 dams on the Tigris and Euphrates rivers. These dams would stabilize the flow in these rivers, but would also reduce their flow downstream, compromising farmers' access to water and damaging the region's environmental balance. These dams would also be subject to collapse in the event of an earthquake, a frequent occurrence in Turkey.
The geopolitics of other resources are less problematic - coal is more widely distributed worldwide and its main consumers have their own production. As for uranium reserves, they are partly held by rich countries (Australia, United States, and Canada). However, over 80% of the global energy mix comes from fossil fuels3. Because of this, any serious geopolitical crisis in a large oil-producing country could affect the whole planet. Faced with this risk, consumer countries have a number of solutions. They can:
• Reduce their dependence on oil by developing alternative energy so they have a more varied energy mix (for example, developing countries have significant solar, wind, geothermal, and hydroelectric resources, which they can develop with the help of rich countries).
• Save energy
and
• Secure their energy supply by entering into agreements with certain suppliers.
Source: IPCC / La Documentation française.
Source: French Presidency [in French]
Source: International Energy Agency, Key World Energy Statistics 2009.
