EC How Energy Transition Models Go Wrong

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We live in a finite world. At some point, our ability to extract resources becomes constrained. At the same time, population keeps increasing. The usual outcome when population is too high for resources is “overshoot and collapse.” But this is not a topic that the politicians or central bankers or oligarchs who attend the World Economic Forum dare to talk about.

Instead, world leaders find a different problem, namely climate change, to emphasize above other problems. Conveniently, climate change seems to have some of the same solutions as “running out of fossil fuels.” So, a person might think that an energy transition designed to try to fix climate change would work equally well to try to fix running out of fossil fuels. Unfortunately, this isn’t really the way it works.

In this post, I will lay out some of the issues involved.

There are many different constraints that new energy sources need to conform to.

These are a few of the constraints I see:

  • Should be inexpensive to produce
  • Should work with the current portfolio of existing devices
  • Should be available in the quantities required, in the timeframe needed
  • Should not pollute the environment, either when created or at the end of their lifetimes
  • Should not add CO2 to the atmosphere
  • Should not distort ecosystems
  • Should be easily stored, or should be easily ramped up and down to precisely match energy timing needs
  • Cannot overuse fresh water or scarce minerals
  • Cannot require a new infrastructure of its own, unless the huge cost in terms of delayed timing and greater materials use is considered.

If an energy type is simply a small add-on to the existing system, perhaps a little deviation from the above list can be tolerated, but if there is any intent of scaling up the new energy type, all of these requirements must be met.

It is really the overall cost of the system that is important. Historically, the use of coal has helped keep the overall cost of the system down. Substitutes need to be developed considering the overall needs and cost of the system.

The reason why the overall cost of the system is important is because countries with high-cost energy systems will have a difficult time competing in a world market since energy costs are an important part of the cost of producing goods and services. For example, the cost of operating a cruise ship depends, to a significant extent, on the cost of the fuel it uses.

In theory, energy types that work with different devices (say, electric cars and trucks instead of those operated by internal combustion engines) can be used, but a long delay can be expected before a material shift in overall energy usage occurs. Furthermore, a huge ramp up in the total use of materials for production may be required. The system cannot work if the total cost is too high, or if the materials are not really available, or if the timing is too slow.

The major thing that makes an economy grow is an ever increasing supply of inexpensive-to-produce energy products.

Food is an energy product. Let’s think of what happens when agriculture is mechanized, typically using devices that are made and operated using coal and oil. The cost of producing food drops substantially. Instead of spending, for example, 50% of a person’s wages on food, the percentage can gradually drop down to 20% of wages, and then to 10% of wages for food, and eventually even, say, to 2% of wages for food.

As spending on food falls, opportunity for other spending arises, even with wages remaining relatively level. With lower food expenditures, a person can spend more on books (made with energy products), or personal transportation (such as a vehicle), or entertainment (also made possible by energy products). Strangely enough, in order for an economy to grow, essential items need to become an ever decreasing share of everyone’s budget, so that citizens have sufficient left-over income available for more optional items.

It is the use of tools, made and operated with inexpensive energy products of the right types, that leverages human labor so that workers can produce more food in a given period of time. This same approach also makes many other goods and services available.

In general, the less expensive an energy product is, the more helpful it will be to an economy. A country operating with an inexpensive mix of energy products will tend to be more competitive in the world market than one with a high-cost mix of energy products. Oil tends to be expensive; coal tends to be inexpensive. This is a major reason why, in recent years, countries using a lot of coal in their energy mix (such as China and India) have been able to grow their economies much more rapidly than those countries relying heavily on oil in their energy mixes.

If energy products are becoming more expensive to produce, or their production is not growing very rapidly, there are temporary workarounds that can hide this problem for quite a number of years.

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William K. 3 months ago Member's comment

First, let me point out the unfortunate reality: "You Can't Fix Stupid." This means that poor choices made by many in government will continue and there is no means to prevent said poor choices.

Next, given that plants, particularly trees, take in vast quantities of carbon dioxide and deliver vast quantities of oxygen. So perhaps the deliberate deforestation is the bigger culprit in the carbon dioxide level increase. Of course, planting trees and saving forests does not make anybody rich or give anybody control over others, so neither approach is considered.

The oil companies are doing well enough, no matter how loudly they scream otherwise. The skill at hiding the truth is amazing, and appalling as well.

The large problem with electric vehicles of every kind is the recharging. That requires energy being delivered at much higher rates than it is consumed, and that requires a lot of expensive distribution network systems. And the big flaw in electric everything is that storing electricity is not simple, easy, efficient, nor is it cheap.

Anne Davis 3 months ago Member's comment

Exactly right, William.

William K. 3 months ago Member's comment

Actually, farming is one of the things that could do well with intermittent electricity. Plants can do quite well when there are periods of darkness, and proper system design will let the plants do well with only watering once a day. Harvesting plants under artificial conditions can be set to only need a few hours per day. Of course, that is indoor farming NOT in California, which is beyond my comments. The big problem with all nature sources of power is that there is not enough of it. And recovering the energy takes systems that cost more than present generation methods.