Global energy demand has been rising inexorably for well over 30 years – from around 8 billion tonnes of oil equivalent in the early 1990s to nearly 14 billion tonnes of oil equivalent today. The rate of increase was 2-3% per annum until 2000 but accelerated to nearer 5% per annum since then as large populations in China and India got wealthier.
Underpinning this increase in demand is global population growth. The population of our planet has increased from 3 billion in 1960 at the rate of about 1 billion people every 13 years to around 7.5 billion people today. Current forecasts of population growth range from a high of 11 billion people and rising in 2050 (assuming current rates of global fertility are maintained) to a peak of 9 billion and declining in 2015 (assuming current developed country fertility.
As people get wealthier, they demand more energy – for travel (motorcycles to cars to planes), for living comfortably (heating, cooling, computing and TV, refrigeration etc) and for lifestyle (food from around the world, beer from everywhere etc)
The oil industry has been remarkably good at delivering this energy. The BP Statistical review shows known reserves of oil and gas increasing 50% over the last 20 years despite a huge rise in consumption. This has been made possible by advances in technology such as 4D seismic and horizontal wells. In addition, we know where there is 10-20 times this amount of oil and gas – all it needs is a rise in price to make heavy oils, tar sands, ultra-deep-water reserves and more shale oil economically viable. In a nutshell, the oil and gas industry can likely keep meeting the world’s energy needs for several centuries to come.
The catch is that this energy produces massive quantities of CO2 – the “greenhouse gas” that has caused our planets temperature to rise sharply and the climate to change dramatically. The average temperature on earth has increased by over 1°C compared to pre-industrial revolution temperatures, and has been rising faster more recently. This temperature rise is not evenly distributed – the arctic is warming more rapidly, raising the prospect of Greenland’s ice melting this century, adding 7 meters to global sea levels, and changing weather patterns sharply.
To avoid such catastrophic consequences, we need to stop emitting CO2 in the way we do today. To stay below the widely accepted 2°C temperature rise we can afford to emit at our current rate (~37 gigatonnes per annum) for another 20-30 years – depending on the forecasting model you use.
That means we are conducting a gigantic experiment with the planet we call home. Last time CO2 levels rose so far so fast, about 60% of all life forms on earth disappeared. Speaking as a life form I think we need to act now – not just decarbonising our production processes but decarbonising our primary energy system. This can be achieved – by using the proven but currently expensive CCS technology; by massively expending renewable energy production (which is currently less than 5% of global energy supply); by using renewable power to convert oil and gas to hydrogen which is clean at the point of consumption; and by decarbonising how we manufacture and transport things. Realistically we must do all the above – and more.
Every region has its role to play. Governments, industry and regulators need to do more collectively to enable the scale up required if we are to realise the potential of CCUS, hydrogen and renewables and to tackle issues around cost and affordability.
The UK Government’s Energy Policy White Paper is expected in early 2020 and the expectation is that it will start to put some much-needed detail around the mechanisms to support the move to decarbonised gas.
However, for this global challenge to be fully addressed leadership is required – from the politicians in China, the USA, Europe and other industrialised countries, from management of companies and from their investors. Ultimately this will impact all of us – our planet cannot sustain the energy system that we currently regard as “normal” – and time is running out for us to figure out what a new “normal” looks like.
