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The peak oil debate — lessons from Europe?
Roger Herrera For Petroleum News
The debate on the timing of when the world’s oil production will reach its peak has not been resolved. This is proving to be a frustration to many countries and international businesses whose plans demand a reasonable expectation of secure oil supplies at an acceptable price. When should an electricity generating company elect to change its fuel from oil or gas to coal or even some renewable energy form? When should a merchant banker lighten up a multi billion-dollar oil stock portfolio? When should an average citizen sell his SUV for a small, more efficient automobile? All those decisions are made easier if one has accurate foreknowledge of when the peak in oil production will occur.
Unfortunately the answer is in dispute, but the nations that constitute the European Union have taken the attitude that peak oil is inevitable and if it doesn’t happen for 20 or 30 years, so much the better because that leaves more time to plan and make the necessary changes in the region’s energy mix. In contrast, in America, which uses twice as much energy per capita as Europe and consumes about 25 percent of the world’s oil, there seems little concern about future oil supplies. We are fighting a war and $2 a gallon gasoline is a worry, but nuclear power is not acceptable, new refineries cannot be built, natural gas is OK, but is already in decline, and wind power should not be considered in my backyard. America has little to worry about The truth of the matter is that if one considers this issue in a selfish, nationalistic fashion, America has little to worry about for a long time to come. Simple conservation could eke out our oil for decades. We have untold coal and if we continue to ignore CO2 emissions, peak oil might not be a major economic problem irrespective of when it occurs. The same is not true in Africa, Asia or Europe. The rest of the world is very worried about peak oil.
Asia, the world’s most populous continent, is in the middle of head-spinning annual growth and China is now the second biggest user of oil and the second largest generator of electricity. Both China and India are building new coal-fired electricity generating stations as fast as they can despite the obvious pollution associated with burning coal. They are also constructing new nuclear power stations and an energy mix is more important to them than environmental concerns. Japan and South Korea, both Kyoto Protocol signatories, are also building nuclear plants, but they can afford the expensive environmental benefits that nuclear represents.
In Africa, any rise in the price of oil for whatever reason, will be yet another disaster for a region barely out of the wood and dung fuel age. Africa does have lots of sunlight and renewable energy must be part of its future if its population is ever to thrive. European Energy Policy largely absent A European Energy Policy is largely absent from the European Constitution despite attempts to formalize an energy plan in that document for the whole region. The British were not willing to reduce their control of their North Sea oil and gas and it was largely British opposition that gutted the energy section of the Constitution. But one thing which is common to all European countries is the firm embrace of the Kyoto Treaty, which makes CO2 public enemy number one. The French have shamed the rest of the world with their unwavering commitment to nuclear electricity. It supplies 75 percent of their needs, but they, together with Finland, are the only Europeans who are willing to educate or ignore public opinion on building new nuclear facilities for the future.
The rest of Europe will not accept nuclear as a clean energy source and uses the unconvincing argument that the finite nature of uranium ore makes it an unacceptable choice. Germany, in particular, has disavowed nuclear because of the marriage of convenience of most of its political parties with the minority Green Party. The Green Party has demanded the phase out of nuclear power stations as part of its deal with the dominant parties and has persuaded the parliament to embrace wind power as its future clean energy source. Germany embraces wind power Today Germany produces a third of all the wind power in the world, but wind, nevertheless, constitutes a mere 6 percent of its electricity needs. The new generation of wind turbines are a massive 600 feet tall and while earlier versions bring back thoughts of Don Quixote in some landscapes, the latest generation monsters are very intrusive. Germany is seriously planning to grow renewable biomass as fuel sources on 15 to 20 percent of the agricultural land in the country. At the moment none of these clean, renewable energy forms are economically competitive with hydrocarbons and they are effectively subsidized, but people in Europe seem to be willing to pay the price. Gasoline in Britain presently costs between $5.80 and $6.00 per American gallon — a cost which is accepted despite the fact that most of it is composed of tax!
One cannot dismiss all the European energy plans as unsuitable for America. An obvious difference between our two continents is the laudable efficiency of public transportation in most of Europe. It makes ours look sad, and one day we will have to face up to the reality that car ownership is not a right, and that trains and busses can be made to be efficient and convenient. If Europe makes a success of its renewable energy forms, the United States can benefit from their experience, so having Europe lead the way with renewables is no bad thing.
We have been debating an Energy Bill in Congress since 1992 without a successful conclusion. Thus we have no energy blueprint to map out our future in this country. The peaking of world oil production was not part of that debate, or, more accurately, was not taken seriously in that debate. Perhaps its newly recognized importance may eventually result in a better, more realistic, Energy Bill.
Europe and America go separate ways on many issues from climate change to Middle Eastern policy, but we are marketplace competitors for oil and gas. We should therefore understand what Europe will do for its energy future. It is relevant to ours.
Editor’s note: Roger Herrera attended a Berlin workshop meeting of The Association for the Study of Peak Oil May 25-26. See his initial impressions in the May 30 issue of Petroleum News.
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