The Future of Energy and the Interconnected Challenges of the 21st Century

Guest post by Francois Cellier

Francois Cellier is senior researcher at the ETH in Zurich, Switzerland. He is known for many contributions in the field of modelling and perhaps the readers of this blog know him for his work with "The Oil Drum". Cellier was present at the meeting on Energy of the Club of Rome in Basel on which I reported earlier on "Cassandra's Legacy". Here, he presents a more detailed report. As a personal comment on this post, I note that Francois may appear very pessimistic when, at the end of his post, he ask the question "Are we merely a club of old men (and a few women) crying on each other's shoulders?" I think Francois' intention is not to imply that it was a meeting of old men as, instead, there were several young people attending and giving contributions. The point is, I think, is that we must never feel too old to believe that we can make a difference! 

The Future of Energy and the Interconnected Challenges of the 21^st Century

François E. Cellier
Department of Computer Science
ETH Zurich
CH-8092 Zurich
Switzerland

Email: FCellier@Inf.ETHZ.CH
URL: http://www.inf.ethz.ch/~fcellier/



The Club of Rome, in collaboration with the Dept. of Environment and Energy of the City of Basel, Switzerland, recently convened a two-day international conference entitled The Future of Energy and the Interconnected Challenges of the 21^st Century. The meeting was held October 17 and 18, 2011, at the Hôtel des Trois Rois in Basel. The conference -by invitation only- brought together a group of about 30 scientists from around the globe to discuss issues relating to resource depletion (Peak Oil) and climate change. Also present was a delegation of the Basel City government including the mayor and the minister for energy as well as several members of parliament.

This report summarizes some of the outcomes of our discussions.

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In Basel, the Club of Rome was given a warm welcome. Basel is by far the most environmentally conscious city of Switzerland. To illustrate my point: Basel reduced its per capita energy consumption between 1991 and 2010 from 5.4 kW to 4.0 kW, a reduction by a whopping 26%. This is a highly impressive figure. The average energy consumption in Switzerland is currently at 5.4 kW, down from 5.5 kW 10 years ago.

Basel has both topographic and political advantages over other cities and regions in the country. On the one hand, Basel-City is the smallest of our Cantons. It essentially consists of the city only. Thus, population density is very high, and public transportation systems are excellent.

While the average number of cars per 1000 inhabitants in the country currently lies at 514 cars, there are only 320 cars per 1000 inhabitants in Basel. Most of the houses in the inner city were built long before the advent of cars, and consequently, they rarely come with garages. There are a good number of public parking garages in the city center, but they are expensive and time-limited, and the residents usually have no parking lots anywhere close to their homes. Thus, in many cases, owning a car in Basel creates more of a problem than being of benefit. About 60% of the workforce comes to work by public transport, and only 30% come to work using private cars. The remaining 10% either walk, or ride to work by bike. Real estate is very expensive due to the limited space available, and therefore, there are few gas stations in the city. Car owners usually fill their vehicles outside the city limits, and as a result, their fuel consumption is not counted in the energy statistics of the city, which to some extent, distorts the picture.

In addition, Basel has political advantages. As in most high-income countries in the Western world, our city governments tend to be a bit more progressive, a bit more energy- and environmentally conscious than municipalities in the countryside. This is true for throughout Switzerland. In contrast to Basel, however, which is a city-state, other metropolitan areas are surrounded by a hinterland that is often more conservative and exerts considerable influence on the city and cantonal politics. The Basel-city government is able to pass any local legislation that suits them without facing opposition. The more conservative neighboring Basel-Countryside is a separate Canton and has no say on city regulations.

Yet, while these advantages may explain the lower energy consumption in Basel as compared to the Swiss average, they fail to explain the rapid decrease in energy consumption over the past 20 years. To this end, a number of different incentive schemes have been introduced step-by-step.

1. At present, most homes in Switzerland continue to be heated by oil, while Basel is actively promoting the connection of private homes to a centralized district heating network. Centralized district heating is much more efficient than individual oil heating, because much of the heat used by the district heating network is waste heat from the waste incineration plant and other industrial plants in the region, which essentially is available for free. Any additional heat that needs to be generated by burning fuel is produced with higher efficiency, because industrial oil burners can be operated cost-effectively at higher temperatures than single-dwelling oil burners. In Basel, the percentage of central oil heating systems in private homes has decreased significantly, and the electrical resistance heaters advocated in some areas of Switzerland no longer exist at all.
2. Then there was introduced an "energy levy" of some 5% that is being used for energy modernization programs and for upgrading older, less energy-efficient buildings, for subsidies of solar thermal installations, and generally for subsidies of investments in renewable energy systems of all kinds.
3. In addition, inhabitants of Basel pay an additional 5 Cents incentive tax per kWh of consumed electricity. This tax is reimbursed to all households and companies in the city as a lump-sum payment of CHF 75 per year and is also being used to reduce payroll taxes of companies located in the City-State.
4. Finally, Basel was the first city in Switzerland to introduce cost-covering feed-in tariffs for solar. These stipulate that the public electricity company must buy all electricity generated by photovoltaic systems and CHP (combined heat and power) plants at a standardized cost of production. Home owners offer their roofs to the local electricity company and to private investors, such as solar co-operatives, virtually for free. At the current time, the costs for this arrangement remain slightly above the market price for conventionally generated electricity. The electricity company is allowed to pass on the incurred costs to its customer base, leading to an increase in price of approximately 0.4 Cents per kWh. At present, Basel has already more than 3 MW of installed photovoltaic power. The Basel feed-in tariff model is expected to be adopted shortly throughout Switzerland. Similar legislation is in place in Germany and has, in past years, led to a veritable explosion in installed photovoltaic power.

The price of photovoltaic systems is dropping rapidly. One kg of silicon for a photovoltaic system cost as much as $500 on the spot market in 2008. The price has meanwhile dropped to $40 and may soon be as low as $5-10. This decrease is caused less by cheaper raw materials than by increasing efficiency in the production of crystalline silicon. Modern fluidized-bed reactors are considerably more energy-efficient than the previously used Siemens process, and as a result, the EROEI of photovoltaic systems is improving. Grid parity may be reached by 2012.

If you are interested in reading the exposé by Basel parliamentarian Rudolf Rechsteiner on these and related topics, you can find it here.

The Swiss National Parliament recently passed legislation pertaining to the fact that no additional permits for new nuclear power stations will be issued in the future, and the five currently operational nuclear power stations will need to be phased out over the coming 20 years. At this time, Switzerland generates approximately 35% of its total electricity through nuclear power. Yet, extrapolating from recent experiences in Germany and recognizing that photovoltaic systems can be deployed rapidly, Basel parliamentarians at the meeting were optimistic that the loss of nuclear power will be able to be compensated for by an increase in photovoltaic systems and other renewables in a timely manner. Additional pump storage reservoirs may be required for load balancing and other reasons, but the loss of nuclear power does not necessarily lead to electricity shortages in Switzerland.

The attendees at the meeting concurred that the supply of conventional oil will soon no longer be able to meet demand, i.e., Peak Oil, if it hasn't occurred already, is imminent. Switzerland, which consumes about 2/3 of its total energy in the form of fossil fuels, will need to reduce its energy consumption. Yet, even the gradual loss of fossil fuels must not necessarily lead to a catastrophic breakdown (at least not immediately). About half of our oil consumption is caused by central oil heating systems, and a huge potential exists for improving the energy efficiency of our buildings. Technology is already available that allows us to construct buildings that are energy neutral, i.e., that generate as much energy as they consume. Historic structures, of which there are many in Switzerland, may not lend themselves to easy upgrading; nevertheless, a lot can be accomplished to reduce our dependence on fossil fuels for space heating.

Undoubtedly, in the near future, we will no longer be able to take our SUVs to the nearest gas station whenever it suits us, but Switzerland features one of the densest public transportation networks on the entire planet. While other Western countries in the 20^th century systematically dismantled their public transportation systems (under the constant and growing influence of the oil companies), Switzerland consistently modernized and enlarged its public transportation network. In the future, we may need to limit the use of our cars to shorter trips, e.g. to the nearest train station. A reduction in available gas may thus represent more of a discomfort and nuisance than a true disaster.

Unfortunately, these assumptions only hold true if we postulate that the rest of the world will be able to cope equally well with the consequences of diminishing oil reserves, which is anything but certain. Peak Oil means Peak Food. Even now Switzerland is unable to feed its population of 8 million people. We currently import about 60% of our food.

While world population will likely peak long before 2050, it is by no means a given that the Swiss population will have peaked by then as well. If Switzerland continues to outperform its neighbors economically, the already enormous pressures caused by immigration will continue to increase. A recent survey in Germany revealed that 10% of all Germans questioned expressed the opinion that they would consider moving to Switzerland – not because they like Switzerland better than Germany, but for purely economic reasons … and Germany is among the richest nations in Europe.

How will we feed additional immigrants if even now our arable land has shrunk drastically due to increased urbanization? How will we keep our own industrial base operational even with sufficient locally generated energy if the economies of the nations around us are faltering due to energy shortages? For these and other reasons, Peak Oil may still turn into a disaster for Switzerland.

In addition, concerning the issue of anthropogenic climate change, most attendees expressed a much more pessimistic outlook. Certainly the energy crisis will bite us long before climate change takes its toll. However, energy issues can be dealt with after the fact in a reactive mode, even if it is uncomfortable, while the "sins" committed today with respect to the continuing emission of greenhouse gases are expected to lead to irreparable damage fifty years from now. For this reason, anthropogenic climate change represents a challenge that needs to be dealt with pro-actively in the here and now, and there is no discernible political will to do so. Despite being cognizant of the fact that inactivity now may lead to a veritable catastrophe 50 years down the road, elected officials still opt for the coming long-term disaster over short-term inconvenience. Large segments of the population are lacking awareness of the coming disaster, and politicians are prepared to ignore it because unpopular decisions taken by them now will jeopardize their future reelection due to their constituents' poor comprehension of the issues at hand.

Some of the exposés presented were outright alarming. According to Ian Dunlop, a senior member of ASPO Australia and a member of the Club of Rome, unless we start reducing the CO₂ emissions right now at a rate of 9% per year, we will be unable to stay within the 2^oC increase in temperature considered safe by the IPCC. As this clearly will not happen, we are almost certain to end up with a rise of at least 4^oC within the 21^st century. Yet, an average increase of 4^oC worldwide translates to a rise of 6^oC in central Europe, and an increase of 8-12^oC in the Arctic.

The melting of the glaciers will dry up rivers and the disappearance of the Greenland ice will lead to a rise of the sea levels by 7 meters. Coastal areas, including a large number of major cities, which are presently home to roughly a third of the world population, will be flooded. Coastal regions will be devastated by hurricanes of unseen proportions, while regions further inland will experience increased desertification. Such change may lead to a die-off scenario where the total world population would shrink rapidly.

According to Dunlop, measures to drastically decrease CO₂ emissions would need to be taken within the next 5-6 years to prevent disaster. Thereafter it will be too late. The massive technological and social changes needed to accomplish these goals may entail a war-like setting where everyone is cooperating because there are no alternatives. Yet, as the effects of climate change will not affect us in major ways for another 30-40 years (some effects are already in evidence, as shown by the escalating number of extreme events around the world over the past decade in particular that have already claimed many lives), there is no political will whatsoever to tackle the problem, even if this should mean the end of the world as we know it.

CO₂ emissions are inextricably linked to the burning of fossil fuels. For this reason, Peak Oil and anthropogenic climate change are not two separate issues. They must be addressed together. Mankind may choose to ignore one or the other, but cannot do so without risking serious consequences.

Our Western democracies served us well for the past centuries. They offered us freedom and prosperity to a degree never seen before. They also turned out to be more robust than the alternative model embraced by Eastern Europe in the 20^th century. While countries that had implemented communist social systems were slow to change, our market economies proved to be highly adaptive to a changing environment.

However, we never before faced a situation where our decisions literally affected the survival of our civilization 50 years in the future, and it remains to be seen whether our political system is able to effectively deal with such a "stress test," or whether our political structures will force us to helplessly submit to our own destruction and that of our planet.

As it stands, the most cooperative and constructive government in terms of dealing with the brewing "perfect storm" ahead may be the Chinese government. Western governments are, at this point, run by representatives that are mostly lawyers (and in-officially by bankers and CEOs of multinational corporations). By contrast, the Chinese leadership consists primarily of engineers. They do understand models and are perfectly capable of reading and interpreting charts. They do everything in their power to help mitigate the coming disaster (and they can afford to do so, because they don't need to fear for their re-election), but their problems are formidable. The Chinese cannot reduce their per capita energy consumption now, and they will not be able to do so for a good number of years to come. The average Chinese citizen remains very poor, compared to their European or American counterpart. China needs to consume more energy to improve the desperate living conditions of a large segment of its population. China is currently burning lots of coal for electricity generation. They are fully aware that this adds significantly to the world's CO₂ emissions. According to Prof. Wenying Chen of Tsinghua University, China currently does not see a way around it, as the Chinese are unable to generate enough electricity by other means. Yet, the Chinese leadership is willing to listen and is receptive to any suggestion that will help them reduce their CO₂ emissions.

One last note: The Copenhagen meeting demonstrated once again that the top world leadership is incapable of addressing this highly urgent problem, although an immediate prescription for decisively reducing CO₂ emissions may be necessary to save our civilization. It was mentioned that it is much easier to deal with politicians at the local level. City mayors and regional governments may have both the will and the means to positively contribute to a local solution. Good examples are likely to have a signaling effect and may convince governments of neighboring areas to adopt successful strategies seen elsewhere. Basel is a good example of that. However, will such a decentralized approach be sufficiently effective to save our planet in time from destruction?

I am very grateful for having had the opportunity to participate in this meeting. It turned out to be an eye-opener in more ways than just one. Yet, after two days of intensive talks, I am asking myself, what have we accomplished? Where is the outreach? Are we merely a club of old men (and a few women) crying on each other's shoulders over spilled wine? What can we do to make a difference?

Colin Campbell on embedded energy

Colin Campbell is the originator of the concept of "peak oil"(*) with the article that he wrote in 1998 in "Scientific American", together with Jean Laherrere. He is also the founder and honorary chairman of the Association for the Study of Peak Oil (ASPO). He lives in Ireland, in the village of Ballydehob with his wife, Bobbins. Last month, he wrote me a letter that contains several interesting observations on embedded energy and on people's life. With his permission, I am reprinting it - slightly edited - together with my answer.

On Embedded Energy
by Colin Campbell (07 July 2011)

I recall doing my thesis, mapping the geology of Connemara in the 1950s, when I stayed for a while with Jimmy and Bridie Mulroe up in the hills. Perhaps his father or grandfather had built the little cottage out of local stone, but Jimmy, his wife and daughter lived there without electricity or running water, relying on two cows, a few chickens and a potato patch, but they did use a little fossil energy from a peat bog up the hill to cook on an open fire.

Their use of energy was negligible but they laughed and smiled all day long. There was not much in the way of social services, and I remember another family I stayed with who had two old maiden aunts who they looked after and sat on either side of the fireplace. There was no television. In those days you were not supposed to get married unless you could support a family, and there were many old bachelors around.

In short, it was a sustainable society that could survive indefinitely on their local resources.

Now compare that with our house in Ballydehob sixty years later. I count about 80 panes of glass in the windows and pictures on the wall, as well as curtains, cupboards full of manufactured items, bookshelves, all of which contain embedded energy. There is also a fridge, microwave and stove using energy, and this computer is on most of the day as is Bobbins' TV as she watches tennis. We have a Renault Clio and use it to go shopping not to mention holidays. So not only do we have a lot of embedded energy in all these possessions but use a lot of electricity with a monthly bill of about 250 euros a month. I don't earn anything, but get various pensions related to my past overpaid career in the oil-bizz.

So we are not at all sustainable, having a lot of embedded energy in the household as well as consumption of oil for the car and gas from which Irish electricity is generated. (We do admittedly have a solar panel that allows an occasional shower when the sun shines, but itself probably has a lot of embedded energy in the panel, pump, piping and its transport to Ballydehob.)

Looking at a national situation such as Britain, one finds a devastating picture. Its oil supply is declining at about 5% a year and will be about gone by 2050. Its gas is declining at 7.5% a year and will be gone even sooner. There is a bit of coal left although the peak of production was in 1914. It has some nuclear power, but I just got a paper from Michael Dittmar in Switzerland showing that world uranium supplies cannot be maintained for long. You can see it at http://xxx.lanl.gov/pdf/1106.3617v1

But the country has a population of 62 million, and no doubt each household has a mass of embedded energy. Manufacturing simply embeds energy, and transport consumes it. So it would seem to suggest that by the end of the Century the country can support no more than a few million living in the style of Jimmy Mulroe of Connemara.

Then we come to money. Jimmy barely used it, but might have occasionally sold a few eggs or done some manual work for which he was paid. In short, in his case money was no more than to facilitate barter. But in Britain everyone receives wages or salaries (in some cases to grossly excessive levels). In addition there is the whole tax edifice, the deductions allowable against it being a form of subsidy. I can tell you of the chairman of a major oil company who paid himself £5 million a year, it was treated as an operating expense, deductible from taxable income, unknowingly paid for by someone else. But I doubt if this person smiled as often as did Jimmy.

Looking at oil, about 30% of the world supply comes from a few Middle East countries, where it costs say $20 a barrel to produce, and much less than that in terms of actual direct cost of feeding the oil workers. So when it is sold for, say, $100 a barrel that represents about 15 million dollars a day of unearned revenue. It in turn makes its way into the world financial system debasing it. Production in other countries is a bit more costly, although again the actual cost of feeding the workers is small.

This all strikes me as a grossly unsustainable situation. I think it confirms the view that when oil prices surged to $147 in 2008 it basically blew the fuse on the entire financial edifice. It was in other words grossly inflationary as at the end of the day money has to represent energy. Inflation soon gives way to deflation when people have less to spend.

Looked at another way: it was not so much that oil prices surged to 147 dollars but the dollar devalued by a corresponding amount, and the dollar devaluation then permeated the other currencies under the global system.

So in other words, this is the collapse of the world we have known. Ireland enjoyed a few years of artificial financial prosperity known as the Celtic Tiger, but has gone bankrupt now with 15% unemployed. It can't do much about it as it is locked into the euro and unable to adjust exchange rates. The EU and IMF are offering bale outs to repay the speculators at the expense of the ordinary people who are now condemned to poverty for years. But ironically it might be a blessing prompting a reversion to the sustainable life of Jimmy Mulroe. The situation in Greece seems even worse, but they may find a solution in default, which in turn may torpedo the euro. That would be no bad thing, prompting a reversion to local currencies and eventually returning to a system of barter avoiding all the financial manipulation.

The wider geopolitical situation is also fascinating. America is evidently also going bankrupt and can no longer afford wasting money on "defence". The country itself has not been remotely threatened since the Mexican-American war of 1836, but the military-industrial complex was highly profitable. Perhaps they need wars to justify it and engaged in them to somehow make money. But it looks as if that game is over. Iraq was a fiasco, killing millions of civilians but failing to get its oil. Afghanistan was an entirely pointless exercise as those poppy farmers were of no threat to anyone: but it was convenient to justify the imagery of world power and hence financial domination.

Then we have the strange attack on Libya by France and Britain. They can't really have cared if Gaddafi was putting down a revolution, the normal behaviour of governments. They don't bother with Syria or genocide in Rwanda. So what was special about Libya ? Guess what ? good old oil. Perhaps Gaddafi was planning to sell it to the Chinese rather than Britain and France. He was also proposing that Africa should revert to the gold standard, which might indirectly undermine the euro and the dollar.

But I digress, what I thought would be interesting to know is how much energy - and specifically oil-base energy - is embedded in a normal household. Every door knob and every pane of glass has embedded energy, which if there were no oil, would have taken many slaves to manufacture.

What do you think ?

best regards

Colin

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Ugo Bardi's answer to Colin Campbell on embedded energy  (10 July 2011)


Well, Colin, what you wrote is, more or less, the core of the question. I am spending much of my time working on this subject: energy and how energy flows through our industrial system. You see, chemical energy is stored in crude oil and in other fossil fuels as the result of ancient geological processes mainly driven by solar energy as, of course, you know very well. Oil is a lot of embedded energy. Now, what is happening is that this energy collected long ago is being gradually dissipated; we extract oil, we burn it, and the final result is heat lost to space (and some nasty greenhouse gases that will give us lots of troubles in the near future).

But the process extracting oil and burning it is more complex than just dissipating thermal energy to interstellar space. That's not a single step process. Energy flows and it is embedded for a while in that thing we call "civilization". To make a long story short, chemical potentials are gradually dissipated in systems which are out of equilibrium - it is an effect of the second law of thermodynamics. The higher is the potential difference between source and sink, the faster the potential is dissipated, creating in the process some dissipative structures; "eddies" in the flow of matter and time. These eddies are where embedded energy is stored: civilization described from a thermodynamical viewpoint. The window panes of your house are such dissipative structures, just as your books, your house and yourself (and Bobbins as well!).

As we gradually run out of fossil fuels, we are reducing the chemical potentials out of which we can drive an energy flux. That means we have to adapt to dissipative structures that embed smaller amounts of energy. This is the problem we are facing with such highly energy embedding structures as cars, air conditioning equipment, refrigerators and McMansions. Some people may be able to gather for themselves a larger share of this embedded energy, just like the oil company chairman you mention, the one who makes £5 million per year. But, on the whole, we cannot trick thermodynamics. Eventually,  we'll have to go back to something more similar to the life of Irish farmers of 50 years ago, whose embedded energy was compatible with the available chemical potentials of that time.

Is it a sad destiny? Perhaps not, as you say in your message; life in a low energy flux, in the old times, may not have been so bad and perhaps people smiled more than they do nowadays. Last week, I was at a conference on energy and during the lunch pause I was sitting near a nice looking lady, not a scientist. In the conversation I said something like, "... and, in the end, a beautiful woman is nothing but a dissipative structure generated for a short time by a difference in chemical potentials...." As I was uttering these words, I told myself that it was not the right line to say. Actually, however, she laughed. She was impressed; go figure! So we may run out of oil and we'll have to adapt to a simpler life. But we won't run out of laughs and of nice looking ladies.



Ugo

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By the way, about the origin of the term "peak oil", Colin Campbell wrote to me that:


Dear Ugo

I think the origin of the term Peak Oil was when I started the ASPO Newsletter in January 2001. It arose from a meeting I had with Dr Welmer, Kehrer and Rimpel of the BGR in Hannover on Dec 14th 2000, following  a lecture I gave at Clausthal University on December 7th. The idea was to form a little association to address the issue, and the initial members expressing interest were
BGR ( German Government Institute, Hannover)
LBST (Ludvig Bukow Systemtechnik, Munich)
NPD (Norwegian Petroleum Institute, Stavanger)
RF (Rogaland Forskning, Stavanger)

It was nothing more than an informal group, but I thought I would try to bring it together by writing a little newsletter, which I sent out as an e-mail attachment to a few people. I searched for a title and fell upon The Association for the Study of Peak Oil  which had the happy acronym ASPO. ( better than ASOP).  The newsletter caught on and eventually had a large readership being reproduced on several websites.

You can see all the newsletters on the ASPO Ireland website.

Later, as you know, Kjell Aleklett took up the idea and organised a workshop in Uppsala, which formalised a little committee to arrange subsequent conferences.  They included the splendid one you organised in Pisa. The 10th is to be in Vienna next year and I look forward to seeing you there.

best regards

Colin