Energy expert Robert Rapier, the Chief Technology Officer at Merica International, writes and speaks about issues involving energy and the environment. Merica , a privately held energy company, is involved in a wide variety of projects, with a core focus on the localized use of biomass to energy for the benefit of local populations.
In this second of a two-part series on Competitiveness 2.0, one of Global Footprint Network’s strategic programs, the Consumer Energy Report columnist and author of “Power Plays: Energy Options in the Age of Peak Oil” explains below how energy constraints are becoming so central to a nation’s competitiveness.
Q: How does Competitiveness 2.0 fit into the energy debate?
A: Energy is emerging as one of the most immediate constraints for economic growth.
The average consumption of oil in the world—87 million barrels per day (bpd) in 2010 divided by a population of approximately 6.8 billion people—is 4.7 barrels of oil per person per year. In other words, if everyone on Earth was allocated an equal amount of oil, the 2010 allotment would have been 4.7 barrels per person. This is 79 percent lower than average U.S. consumption, and 54 percent lower than average EU consumption.
Perhaps counter-intuitively, developing countries are continuing to rapidly increase their consumption even in the face of much higher energy prices. Developing countries are presently below the average 4.7 barrel allotment, but their consumption is rising. Chinese consumption has risen to 2.5 barrels per person per year, an 80 percent increase in the past 10 years. At that growth rate—and assuming China’s population remains constant—China will reach 4.7 barrels of oil per person in slightly over 10 years.
As oil prices rise, consumption in developed countries is likely to continue to decline in response. But developing countries will continue to increase their consumption, and that will strain the world’s oil production systems and likely drive oil prices ever higher. This is understandable, considering that the majority of the world’s population lives in developing regions, and they seek to raise their standards of living. Developed countries have done that by burning fossil fuels, and developing countries seek the same modern conveniences—dishwashers, televisions, computers, and cars—enjoyed by the developed world and which are currently powered mostly by fossil fuels.
To the extent that the decline in developed countries is a result of the adoption of alternative fuels and improved efficiencies, economic growth in developed countries may be able to continue. But if the decline comes as a result of people simply being unable to afford oil, economic difficulty in developing countries is practically assured.
Q: What are the energy options for countries? Where would you put your effort?
A: Some countries have rich fossil fuel reserves, and will likely to continue to rely on them. Russia and Canada are two examples of oil exporting countries that will have enough oil to fill the needs of their populations for many years. However, environmental pressures will continue to mount in a world in which climate change is a pressing concern. Thus, even countries with rich fossil reserves would be wise to devote funds toward developing alternative energy systems.
Tropical countries – particularly those with ample rainfall – have some opportunities to produce biofuels for their own populations, and in some cases may have excess that can be exported for cash. Sugarcane ethanol is one example of a crop that grows well in tropical climates, has a good energy return, and can provide cash for farmers in developing countries.
The biggest emphasis, however, should be on conservation. We have to squeeze wasteful energy consumption out of the equation. There are a number of techniques for achieving this, but not all countries have yet attacked this issue with the seriousness it deserves.
Q: Where do you see positive examples, where do you see most risks?
A: There are many countries that have adopted aggressive renewable energy programs. In some cases, these programs have been effective, but in others there have been unintended consequences. The expansion of oil palm plantations into the rainforests of SE Asia is an example. This will be the biggest risk; balancing the energy needs of the world against preserving the biodiversity and minimizing competition between food and fuel.