Three Important New Factors in the Energy System.
1998 Series 1 Number 26 Page 15
John Walsh, energy consultant, wrote this seven-page analysis of our fossil-fuel-based energy system in light of the information available to him at the time (1998).
He began with three statements:
“The first half of the next century will be the critical period for dealing with emissions of greenhouse gases from the energy system. World population will probably reach a peak of about 8 billion at or just past the mid-century point, significantly lower than previous estimates. World production of oil from conventional sources will reach a peak before mid-century and probably about 2015 or shortly thereafter. The economy will be continuously dematerializing during this time, but the rate of this major structural changes uncertain.
“This paper examined the implications of these three factors for the evolution of the energy system in the next decades and explored the paradoxical aspects that are becoming evident. These factors will become of steadily more important in formulating long range energy scenarios.”
[Sadly, with lived experience since the turn of the century, we know we have already surpassed 8.1 billion people as of 2024 (and continue to add 80 million people per year), we have continued to find and use fossil fuel resources at unprecedented rates, and the dematerialization of our economies has fizzled. What’s more, levels of pollution and biodiversity loss have soared and we are pushing the planetary sustainability boundaries. Nonetheless, the United Nations still projects that we will reach 10 billion people later this century. See < World Population Prospects – Population Division – United Nations >. Ed.]
[For a recent assessment of oil resources, see < How much oil remains for the world to produce? Comparing assessment methods, and separating fact from fiction – ScienceDirect >. See also Dr. Charles Hall’s presentations to CACOR < Dr. Charlie Hall | How much oil remains for the world to produce? Comparing assessment methods, and separating fact from fiction | CACOR Zoom 2022-10-26 – Canadian Association for the Club of Rome (canadiancor.com) >. Gradually, we have been shifting away from ‘conventional’ resources to ones produced through modern technology (e.g., fracking and gravity assisted steam extraction). Ed.]
[For a recent assessment of dematerialization, see < Are We Seeing Dematerialization of World GDP? | Biophysical Economics and Sustainability (springer.com) >. Ed.]
Mr. Walsh concluded as follows:
“The future is invariably different from the past in some significant way. The simple extrapolation of previous trends has rarely led to satisfactory predictions and the energy system is no exception. To paraphrase Karl Marx, who amplified an idea of [Georg Wilhelm Friedrich] Hegel’s, when history repeats, it repeats as farce. Three factors have identity been identified that will have a major effect on the energy economy in the next half century and which should be taken into account in the preparation of long-range studies. Each has paradoxical aspects.
[For information on Hegel, see < Georg Wilhelm Friedrich Hegel – Wikipedia >. Ed.]
“After a long period of rapid and worrying expansion, the population of the world, though still growing about 80 million people a year at present, is stabilizing rapidly. It now appears the maximum of around 8 billion people will be reached at mid-century or shortly thereafter. This is a sharp decline from earlier estimates of a peak of some 10 billion reached later on in the century. Though the smaller population will make energy and environmental problems much easier to handle in the long run, such a world is likely to be richer than a more populous one. In the short term, therefore, it is even possible energy that requirements will be higher because of such factors as the greater usage of cars, which more people can afford in a richer, less populous world. Of the three fossil fuels [coal, natural gas liquids, and oil (including bitumen)] only oil has a gap or step in its supply curve during the period of interest, reflecting the greater cost of derivation from non-conventional sources. This gap becomes important when conventional oil production reaches its peak since additional supply past that point must be derived from other more expensive non-conventional sources or their substitutes on either the supply or the demand side.
[Many who study human population growth would dispute that our growth appears to be slowing substantially, let alone that 8 billion people is a sustainable number. Indeed, it has largely been reached through the destruction of natural ecosystems, yet though very systems are what create the conditions we need for life. Ed.]
“A parabolic method was used to assess remaining oil resource is and it was shown that over a wide range of assumptions, peak production is expected before 2050 and probably around 2015 or shortly thereafter. Higher technical costs for oil production means that substitution of non-carbon sources will be easier. Nevertheless, before the peak is reached it may be that oil prices will fall. This paradoxical situation is shown to be the result of the policy of [The Organization of the Petroleum Exporting Countries] (OPEC) for supporting oil prices much above their technical cost of production in the Middle East.
In the future, generation of wealth, as measured by such indicators as [Gross Domestic Product] GDP, will depend progressively less on physical materials as more of the economic activities related intellectual activity of one kind or another. This structural change has major implications for the energy system. It is now important to determine the rate of dematerialization of the economy. It is shown that paradoxical effects can arise from this effect in the energy field.
[The simple commodification of tasks that once were not counted in GDP explains much of the so-called dematerialization thus far. Simultaneously, Jevons’ paradox applies to the prices of all commodities—the less we use materials, the lower their prices will go in free markets, inducing greater demand. Ed.]
“Given that more attention is needed for the control or reduction of greenhouse gas emissions, consideration should be given to factors of this guide in preparing long-range forecasts in the energy system.”
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