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The Time Machine

Thanks to technology, the world of energy today is cleaner, safer, more diversified and cheaper than we could have imagined 10 years ago.

by Francesco Gattei
05 February 2020
13 min read
byFrancesco Gattei
05 February 2020
13 min read

Flash forward was a short-lived American TV series that imagined you could see a projection of your life on a specific day in the future. What will we be doing in ten years’ time? Who will be governing us? Will we be living in a different country? After a spectacular start, the series quickly lost viewers and was cancelled after the first season. As a result, the fate of the individual characters remained unknown. If in 2008 we had been given an opportunity to flash forward, how would we have imagined energy to be in September 2018?

The history of time travel is little more than 150 years old. We have to look to Jules Verne and H.G. Wells at the end of the 1800s for the first accounts of fourth dimension travelers. Their vision of the future is  dystopian, negative and dangerous. For the young Verne, with his Paris in the Twentieth Century, tomorrow’s world (which is now yesterday’s world) would have been controlled by communication and a technocracy without feelings. The fate of the protagonist, a poet, was inevitably tragic. Written in 1863, the book was so pessimistic that, to avoid harming the young writer’s positive image, the publisher never published the text, which was later rediscovered in a cellar and published in 1994, when the domination of communications and the crisis of poetry seemed a less tragic prospect. Paradoxically, the first to travel through time was Verne’s manuscript itself. Because of this publication delay, rather than being the progenitor of time travel novelists, Verne became one of the last imitators of the genre. The official title goes to Herbert George Wells, a modern turn-of-the-century man and a convinced supporter of socialism and free love, who was also fascinated by bicycles (“Every time I see an adult on a bicycle I do not despair for the future of the human race.”) In his 1895 book The Time Machine, Wells portrayed a world devastated by monstrous beings and, in the final journey through time, almost lifeless. From Zamjatin’s We to Bradbury’s Fahrenheit 451 and Orwell’s 1984, the future is characterized by a deadly mix of illiberal dictatorships, domination by a negative technology and annihilation of individualism and creativity. In the 1970s, cinema added a further bitter ingredient to these pessimistic themes, one unknown to writers in the past. With Interceptor, Waterworld or The Day After Tomorrow to mention a few, the world of the future is highly polluted and close to if not beyond environmental catastrophe.

 

An uncertain future

If we had had our flash forward in 2008, therefore, it is highly likely that we would have worn dark glasses: we would have foreseen very high oil prices at 200 dollars or more and coal as the main source of energy to fuel the Chinese “factory of the world.” We would have expected a growing battle for access to resources and, consequently, tensions in the Middle East, the geopolitical equivalent of the fog in the Po Valley. And in 2008 there were certainly premonitions for a dystopian future: the price of oil reached a historic high of 149 dollars a barrel, the price of gas in the U.S. was close to 13 dollars per one million BTUs (MBTU), again a record, and the world awaited completion of the big LNG importation terminals that would guarantee continuity of supply in a market where supplies were gradually dwindling. Coal was the fastest growing energy source for the sixth year in a row, while China was the most voracious consumer in the energy sector, accounting for more than 50 percent of the growth in the demand for fossil fuels. Renewables? Not available. With an installed solar and wind capacity that globally amounted to 140 Giga Watt (GW) and annual increases of a few tens of GW no one could foresee any significant change in the sluggish trend of recent decades. Unsurprisingly, therefore, the first issue of Oil was dominated by a Malthusian theme: the oil price peak and the great uncertainty about the discovery of new resources. The title of the magazine “For how much longer?” might also have led Jules Verne’s publisher to hide the manuscript of Oil for a century.

But everything has changed since then. The world of energy is cleaner, safer, more economical and diversified. Over a couple of months, the price of oil plummeted to 35 dollars, then climbed back up to 120 during 2011-2014 and fell again. It currently stands at around 75 dollars, but no one is wondering “for how much longer” any more. Similarly, gas in the U.S. has been priced at between 2 and 3 dollars per MBTU for a decade, a good 10 dollars less than in 2008. The U.S. no longer needs to import LNG as it is now exporting it along with gasoline, light oil and coal. U.S. domestic consumption of coal, despite the new Administration’s attempt to relaunch it, has fallen by 40 percent. Thanks to the use of gas and renewables, CO2 emissions in the U.S. have fallen to the levels recorded in 1992, the year of the first, fruitless attempts at a climate agreement. In Britain, coal use has returned to the level it was at the time of Wells’ futuristic novels. China has also enacted a profound transformation of its industrial and energy model. Gas is the preferred source with growth rates of more than 10 percent, and defending air quality in cities is an absolute priority. Coal remains the dominant fuel in electricity production but its use, even in China, has been falling for 5 years. Globally too, the growth in the demand for coal has almost stopped, while solar and wind power are the fastest-growing sources, having reached an electricity generation capacity of 1100 GW, 10 times the level 10 years ago.

A small but significant technological revolution

But what has led to this radical change in prospects?

The answer is technological and relates to the transformation of two marginal sources into mainstream ones: the production of oil and gas from impermeable rocks, tight oil and shale gas, through hydraulic fracturing and the production of wind and solar energy through the widespread creation of new plants. After years of accumulating experience, these two developments have achieved a sudden breakthrough which has fostered massive and rapid operational scalability: the simplification of operations has in fact made production of energy from these sources as routine an activity as manufacturing. The implications are considerable: the small financial outlay a well or a wind turbine cost a few million dollars and the extensive availability of credit with cash flow ensured by subsidized rates for renewables or hedging for Oil & Gas production have greatly reduced the barriers to entry of new operators and allowed a rapid evolution of the learning curve. In the U.S., nearly 10,000 wells are drilled every year by hydraulic fracturing and there are thousands of turbine or photovoltaic installations. If Gladwell’s rule about 10,000 hours of practice being needed to become a champion also applied to energy, we would be beating new records every year.

And the transition from Malthus to the exponential increases of Moore has been a short one: in 2008 the world consumed energy equivalent to 245 million barrels of oil a day. 200 million of these, over 80 percent, were fossil fuels, only 1 million of which were shale gas/tight oil, and 0.6 were solar and wind power. The rest was split between hydroelectricity at 2 percent, nuclear at 5 percent and biomass at 9 percent. The world currently consumes 270 million barrels, but the tight oil/shale gas component is 14 million barrels/day and 3 million bbl/day come from solar and wind power. In other words, 2/3 of the world’s increased consumption over the decade has been covered by sources that in 2008 were totally marginal and have now suddenly become competitive. One further and unforeseeable benefit of the new technologies is the improvement in the carbon content of the energy mix. More gas, more renewables and less carbon equals less CO2 per unit of energy. Despite the 15 percent increase in the demand for energy over the decade, emissions have increased by “only” 10 percent. Today the world emits 2.3 tons of carbon per million tons of energy consumed. Fossil fuels are still dominant, with 228 million, their share of the total has remained substantially unchanged, but their contribution to the growth of individual sources has not been uniform. While gas has grown by 12 million barrels, carbon has only grown by 8 and has remained stable for a few years. And this has a positive effect on the weight of carbon in the mix.

And finally, energy production today is more diversified and secure. The U.S., third in 2008,  is now the top oil producer and the top gas producer as well from second ten years ago. OECD countries generate 30 percent of their energy in-house, a level that has remained stable over the last 10 years. This is an excellent result considering the lower energy potential of these countries and the maturity of their oil production areas.

In short, we have written a much more positive novel that we had planned. Travelers in the days of Verne and Wells were right about a world without poetry and dominated by dehumanizing technology. But it’s a freer, fairer and more peaceful world than they inhabited or had ever imagined. And that we could have imagined even ten years ago.

A U-turn?

Then all is well? If our traveler were to jump forward ten years, what kind of world would he find? Have the dynamics of recent years set a virtuous trajectory? Nothing can be taken for granted and everything could be quickly overturned. In fact, the last few years have been characterized by a new phenomenon which could have serious consequences for human development and for an effective fight against climate change: the growing aversion to investments in fossil fuels. This process undermines the foundations of the energy system, which requires constantly available, high-density energy sources.

Dense and constant energy is guaranteed today by fossil fuels, hydroelectricity and nuclear energy, which cover 99 percent of requirements. Fossil fuels provide the majority, covering more than 80 percent of consumption, and can only be replaced with intermittent forms of energy (such as solar and wind power) for certain kinds of use, e.g., the production of electricity during the 4 to 5 hours daily of maximum sunshine and wind strength.  There is no actual substitute for the remaining 20 hours of electricity generation to allow the production of chemical materials, to fuel the most energy-intensive industries such as cement, steel, air, sea and heavy goods transport. Also limited, despite the emphasis, is the degree of substitution in automotive transport, considering the high cost of batteries, which in poor countries exceeds the cost of the entire car, reduced vehicle autonomy and charging times.

The limitations presented by new renewables derive structurally from their low energy density, which requires vast expanses of panels or rotors to produce the amount of energy required, from intermittent generation and low efficiency of batteries that are expensive and also characterized by low density energy. New materials or original technological solutions are needed to improve their performance and make them effective alternatives to fossils.

Just as technology has allowed us to reverse the trends expected in the last decade, it also prevents us from exceeding a certain dimension and speed of replacement. Rather than an actual substitution, what we are seeing today is the development of a model of solar and wind power integration with the primary energy produced by continuous sources. This is why the general aversion to fossil fuels is extremely dangerous: if these were no longer available, the entire energy system would lose continuity, reliability and collapse, with knock-on effects on the production of all other sources such as the functionality and stability of the electricity grid which is ensured by the availability of continuous sources as are the production and transport of materials used for renewable sources. For poor countries it would be impossible to continue developing as they have done over the last thirty years, this despite the fact that a billion people still have no access to electricity and a further billion have limited and intermittent availability. Finally, the energy potential needed to fuel research into new technologies would also be lost.

Conclusion

The history of the last ten years has taught us that technology, and therefore human ingenuity, are the most effective tools at our disposal to escape a nefarious future.

And that CO2 emissions can be reduced massively and easily by replacing coal with hydrocarbon gases very quickly.

Aversion to the fossil fuels that feed 4/5 of the global energy system could lead to a convergence of instability, high energy prices and higher emissions, taking us back to the negative conditions we feared a decade ago and (paradoxically) slowing down the process of change.

Our brain uses 20 percent of the energy while weighing just 3 percent of the body. It requires constant, reliable and efficient energy. Our economic system also requires a lot of constant and efficient energy. A necessary premise to give birth to new ideas and continue moving towards a cleaner, more beneficial and richer world. For everyone.