On April 22nd we had the pleasure of hearing a presentation by Ripu Malhotra, a researcher with the Stanford Research Institute, who was speaking at AlwaysOn’s “Nordic Green” conference. Mr. Malhotra has taken the unusual step of converting all forms of energy use into cubic mile of oil equivalents – a measure that is quite helpful if one is trying to really grasp the scope of fossil fuel compared to alternatives.
Using Malhotra’s figures, which he has garnered from the British Petroleum statistical database of global energy usage, among other sources, it is clear that today, at least, the world’s economy is utterly dependent on fossil fuel.
| GLOBAL ENERGY PRODUCTION 2005 |
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| Global energy production expressed in “cubic miles of oil” (CMO), billion barrels of oil, quadrillion BTUs, and gigawatt-years. |
While there is impressive percentage growth in the solar category – including wind power in this analysis – and while these figures have already changed dramatically since 2005, it is clear that alternative energy still contributes well below 1% of total energy supply, whereas fossil fuel contributes well over 80% to global energy supply.
In terms of choosing between fossil fuel development and alternative energy development, another point which should be put to rest is the notion we are running out of fossil fuel. The next three charts show the potential reserves of the primary fossil fuels – oil, coal, and gas. In order to develop estimates for unconventional sources of these fuels, we have taken the midpoint between the high and low estimates.
| OIL – TOTAL RESERVES |
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| If oil provided 100% of global energy, and we used twice as much as we do today (1,000 Quad BTUs per year), there would be a 59 year supply of oil based on known reserves.
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| COAL – TOTAL RESERVES |
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| If coal provided 100% of global energy, and we used twice as as much as we do today (1,000 Quad BTUs per year), there would be a 218 year supply of coal based on known reserves.
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| GAS – TOTAL RESERVES |
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| If gas provided 100% of global energy, and we used twice as much as we do today (1,000 Quad BTUs per year), there would be a 45 year supply of gas based on known reserves. |
So when you add it all up, at twice the current energy consumption overall, oil, gas and coal could potentially supply all the energy we need in the world for the next 300 years – not including gas hydrates.
The other question of course is how do the alternatives stack up in terms of affordability and short-term feasibility? For this analysis, let’s return to the total energy production goal – if you assume 1,000 quadrillion BTUs of energy for 10 billion people, you achieve a per capital energy production of 100 million BTUs per person. In reality, global population will probably stabilize somewhat under 10 billion people, but 100 million BTUs per person is not enough – it really needs to be as much as twice that.
As we demonstrate in our feature “The Good, the Bad, & the BTUs,” citizens in the nations where per capita income exceeds $15,000 per year, consume on average 216 million BTUs per year per person. In the USA, per capita energy consumption is 327 million BTUs per year per person. If we assume the planet’s population will stabilize at 8.5 billion people, at 1,000 quadrillion BTUs of global energy production, per capita energy consumption will be 117 million BTUs per person. Even with extraordinary developments in energy efficiency, it is unlikely we can expect to deliver less than this amount of energy per capita, and still allow the world to achieve universal prosperity – global energy production will need to double.
The next chart shows the potential costs of adding another 500 quadrillion BTUs of energy to global energy production using non fossil fuel means – remember, to eliminate fossil fuel, you would have to add nearly 1,000 quadrillion BTUs to global energy production.
| REPLACING 500 QUAD BTUs OF FOSSIL FUEL – COST IN $ TRILLIONS |
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| At current costs, adding 500 quadrillion BTUs of energy using alternative energy sources would require well over $100 trillion. |
Wind is the surprise winner in this survey – we’ve made some huge assumptions regarding cost per megawatt, however – using various sized production units across the energy sources hydro, nuclear, wind, roof PV, and utility CSP (concentrated solar thermal). At a cost of $2.5 million per 1.0 megawatt (installed), wind energy looks pretty good. Is this an accurate cost?
The key variables affecting these results are, along with the cost per megawatt, the operating availability percentages. Nuclear has at least a 90% up-time – it goes full bore almost constantly, which greatly lowers the cost for nuclear as a scaleable replacement to fossil fuel. But do we want 20,000 new nuclear power plants – actually these power stations can be 5-10x larger than 900 MW each – to get our 500 quad BTUs?
None of these solutions are cheap. Annual global economic output is in the 50-100 trillion range today, probably creeping up on $100 trillion. This figure is more subjective than you might think when simply compiling World Bank data. Using purchasing power parity metrics and devalued dollars, $100 tr. is probably not far off. But even at that, it would cost well over 100% of our entire global economic output for a full year to develop 500 quadrillion BTUs of new annual alternative energy capacity – using very favorable assumptions. Meanwhile global energy production needs to double as soon as possible. Pick your poison. Adapt.
Most of the data referenced here is based on a presentation by Ripu Malhotra, who is authoring a book on these topics to be published by Oxford University Press.
