Seidenschwarz: Oil still intricate to energy needs
By Robert Seidenschwarz/for MISSOULA CURRENT
After a recent softball practice (yes, still playing softball at 61!), my buddy James and I were catching up on family and general discussion when James, knowing my passion on all things energy, asked me the following question: Could we, in the next 20 years, eliminate our need to use fossil fuels?
After pondering this question for several moments and having no ready answer, I responded with a question to James: Do you mean all fossil fuels (meaning oil, gas and coal) or just oil? If you mean oil, that would be difficult. Oil is the origin of our transportation infrastructure (transportation accounts for 70 percent of our country’s energy usage) in addition to cosmetics, synthetic rubber, lubricants, medicines, cleaning products, asphalt, synthetic fabrics, food, plastic and fuels. This list could be longer, I stated to James, but you get the point.
I came back to his question: Could we eliminate the above fossil fuels in 20 years? Is it possible? My answer was a flat NO! In the “green” vs. “carbon intensive” struggle for our energy future, why such an emphatic “no” to his question?
Consider the recent precipitous decline in oil prices, from a high of $120 in March of 2012 to the current price of $46.37. Earlier this year, a low of $27 was reached. The effect here in the U.S. has resulted in thousands of workers in the oil industry losing their jobs, counties and states showing budget stresses, projects delayed, and capital budgets for exploration and developments slashed. The decline in pricing has had a devastating impact on the economies and budgets of Middle East producers. Consider the following fiscal break-even price for Saudi Arabia $105.60, Iraq $81, Iran $87.20, Qatar $55.50, to name a few.
Saudi Arabia derives 90 percent of its export revenue from oil exports. This is one example of many that present difficult decisions and challenges as we attempt to move towards a carbonless energy future. Rapid price increases and declines both present their own unique economic stresses.
Because passions are strong, facts can fly fast and loose, and understanding the vastness and complexity of the global energy infrastructure, it is not functionally understood by the politicians and public. There are apparently three conflicting aims in current energy policy dominating the discussion.
The first part of the triad is the priority of affordable energy. It’s an easy conversation to have from the comfort of one’s ocean-view home while sipping chardonnay and lamenting Apple’s latest earnings report. Pontificating upon the need to convert to alternative fuels to reduce the impact from global warming, the conversations needs to include the economic impact on vast segments of the population that would be adversely affected by the potential of rapidly increasing electricity prices. No small issue is the cost of this new green future as we move through a transition of energy wage. This is not just an issue for the developed world countries, but especially for the quarter of the world population still living in abject poverty, struggling under the threat of sickness, disease, and food and water failure.
Second is the need for secure and reliable supply. The issue here is the rise of a range of geopolitical and geo-economic factors in a world challenged by terrorism and cross-border tensions. Consider China’s national security obsession to secure energy resources and maintain open shipping lanes as an example.
Third, and the one that is most essential, is the recognition for reducing carbon emissions. The Paris Agreement was a move towards carbon reduction. But, there remains absolutely no concrete way of achieving the climate goals as set forth in either that document or any other similar attempt.
These three objectives appear to be in conflict, if not outright opposition, as they are essential for both economic development and quality of human life.
A balance of energy sources is necessary. The issue is often framed as pitting environmentally friendly “green” energy sources against more traditional “black” hydrocarbon sources of coal, crude oil, and natural gas. As we move towards this new era of energy, we will require a number of different sources. It will continue to require a number of conventional energy sources, along with the rise and usage of solar, wind, biomass, and nuclear.
I have long advocated nuclear energy to meet scalable, non-carbon emitting electric generation. Electric demand will be the fastest growing segment of energy usage. This is driven by the growth in the developing world, and is essential to improving the standard of living in these countries. Greatly enhanced public education, expanded economic cooperation between public/private sector stakeholders will be required to reconcile and transition to the energy future that is desired.
My next article will offer insights to the opportunities that can help us meet the basic needs for our planet’s seven billion-plus people and growing.
Robert Seidenschwarz is chairman of the board of directors for the Montana World Affairs Council and lives in Missoula.