The fact is that the world will need oil and gas to help meet rising energy demand well into the second half of this century, and beyond. In terms of practical solutions and for an informed debate we need to understand that not all fossil fuels are the same, and we should not use fossil fuels as an umbrella term. An extended period of co-evolution and co-existence with renewables and fossil fuels is likely as new energy infrastructures supplement or supplant old.

Natural gas emits half the CO2 emissions compared to coal, another fossil fuel, when used to generate power. As gas plants can be switched on and off in response to demand, these can help provide the essential back up, and be the back bone needed to accelerate deployment of intermittent energy sources, such as renewables. As the window on reducing emissions closes, switching out coal and replacing it with natural gas-fired plants is the single fastest way to slow emissions.

The reality is that there are also significant technological and economic obstacles, which need to be accounted for as part of an informed global warming discussion.  Historically new energy sources have taken around 30 years to establish even a 1% share of the market. The scale and cost of energy infrastructure is simply too large to have quick turnaround times. Renewables such as wind, solar and hydro, will play increasingly important roles, however currently the US Energy Information Administration estimates that 11% of today’s global energy comes from renewable energy sources. But it also estimates that, even by 2040, that number will have increased to only 15%. Shell’s Scenarios team, for its part, believes that figure could be as high as 25% by 2050. But that still leaves 75% of energy demand needing to be met by traditional sources like oil, gas and nuclear. We need to moderate our expectations of a zero-carbon future with the understanding that there are significant technological and economic obstacles. Therefore it is neither logical nor possible to underpin a low carbon, high energy future solution to renewables alone, especially in the short term.

A recently released report by the New Climate Economy finds that the economic costs of inaction are substantial, whereas the costs of taking action are relatively modest and delaying action significantly raises costs.  The report identifies the energy sector as significant from the perspective of both the economy and climate change. Being pragmatic also means recognising the fact that economic growth and action to tackle climate change are not mutually exclusive.

It sets ambitious goals for emissions reductions from renewable energy and energy efficiency measures.  For example, it recommends that, by 2030, all new generation capacity in high-income countries come from renewables or other zero-carbon sources and at least 25% of new power in fast-growing middle-income countries come from non-hydro renewables. However, the report recognises that fossil fuels will still continue to account for a significant share of the energy system between now and 2030, and beyond. The report identifies reducing coal use and increasing gas use as important ‘seeds of change’ for decarbonizing the energy system.  However, the report finds that natural gas is likely to provide net climate benefits only if it is backed by robust climate policy and environmental regulations.

The trend of urbanisation will also play a key role in the future of energy, and the energy transition. More than three quarters of the world’s population in 2050 are expected to be living in cities, and we will be building the equivalent of a new city of over 1.4 million people every week. Urbanisation can bring benefits, such as the opportunity for change at a local decentralized level, but if managed poorly can cause greater environmental degradation and accelerate global warming. There are many differences between cities. For example Houston will never be the same as Hong Kong, however compact, densely populated, well planned cities with effective integrated infrastructure and services are more resource- efficient. This is in part due to less energy per person in transport because people live closer to where they work, live and shop. Cities such as Houston, and other existing cities, will need to focus on retro-fitting and lowering the carbon intensity of their transport systems or buildings for example. New cities though, can be designed to be more resource efficient.

  • Digital Hutch

    Are low oil prices here to stay?

  • Patrick

    The Rise of the Micro Players – a view emerging from Future Agenda Energy discussions held in New Zealand is that by 2025 we will see a shift from a supply-driven energy system, where the market is shaped by just a few major players, to one with a blurring of consumers and producers. It is expected that we’ll see a change in how individuals engage with, access and use energy. Supported by ICT and technology developments, these ‘prosumers’ (micro producers and consumers of energy) will impact the expectations that individuals have of energy systems and the social norms that develop.