Is the sun setting on fossil fuels?
- Radiators would have to run 10 degrees cooler under changes to homes needed for Britain to hit net zero, the public has been warned. The Government has said it wants 600,000 heat pumps replacing gas boilers every year by 2028 to help decarbonise the country’s home heating, which accounts for 10 per cent of the UK’s greenhouse gas emissions.
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- The fiddling with temperature data is the biggest science scandal ever. New data shows that the “vanishing” of polar ice is not the result of runaway global warming.
Peter Sellers doing Michael Caine 'not alot of people know that' Parkinson 70s.
Fossil fuels are the currently the world’s primary energy source. Is it economically feasible for us to continue to rely heavily on oil, coal, and natural gas? Fossil fuels affect the earth in many negative ways, and the associated economic impact can be astronomical.
The market impacts of outdoor air pollution alone are projected to increase to 1% of global GDP by 2060, dominated by health expenditures and labor productivity losses (OECD n.d.). As shown in Figure 1, China and India in particular will experience significant loss of life and productivity if the current models prove accurate. Particulate pollution, comprised of liquid droplets and very tiny particles that get into the air and can enter the lungs, is especially dangerous to aging populations. Some health issues related to particulates are aggravated asthma, reduced lung function, non-fatal heart attacks, irregular heartbeat, and premature death in those with heart or lung disease. In 2016, the World Bank estimated the annual cost of combined indoor and outdoor air pollution to be $5 billion USD (Worland 2016), affecting developing countries most severely.
Figure 1. Adapted from “The Economic Consequences of Outdoor Air Pollution” by OECD.org (n.d.) Retrieved June 2, 2018 from http://www.oecd.org/environment/indicators-modelling-outlooks/the-economic-consequences-of-outdoor-air-pollution-9789264257474-en.htm
The impact to agriculture caused by climate change will be likewise significant. These impacts can be divided into market and non-market costs; market costs can be quantified in dollars, but non-market costs are more difficult to assess, as there’s no market for things like coral reefs. Drs. Timothy Bralower and David Bice (n.d.), Professors of Geosciences at Penn State University, estimate that a worldwide increase in temperature of 4°C. would cause damages amounting to 4% of global GDP. As demonstrated in Figure 2, the increase is exponential, meaning the rate of increase in damages increases at increasing magnitudes of warming. Agriculturally, while the short term effects of temperature increases less than 3° C. are expected to be mainly positive, primarily negative impacts occur above that level. Additional costs will be incurred as grazing and farming operations need to move to other locations to accommodate changing local weather conditions.
Figure 2. Adapted from “The Economic Costs of Climate Change” by Timothy Bralower & David Bice (n.d.). Retrieved May 30, 2018 fromhttps://www.e-education.psu.edu/earth103/node/717
Costs associated with climate change caused by burning fossil fuels continue to soar, with a 52% increase in extreme weather events between 1990 and 2016, as shown in Figure 3. The worldwide economic losses engendered by these events doubled during that same time period. And, although technology continues to provide greater yields in crops globally, extreme weather events such as floods and droughts have caused significant yield reductions in some years. Insurance companies closely watch these developments, as the more frequent occurrence of extreme weather events impacts their ability to effectively ensure people against such events. This will eventually result in higher premiums and greater costs to the economy.
Figure 3. Adapted from “Infographic: The Soaring Costs of Climate Change” by N. McCarthy & F. Richter (2017). Retrieved May 30, 2018 from https://www.statista.com/chart/11673/the-soaring-costs-of-climate-change/
Climate change is also impacting the Arctic. The Arctic is warming faster than any other region on earth, primarily due to greenhouse gas emissions from human activity. Sea ice on the Arctic Ocean could disappear in summers by the 2030’s. Cumulative net costs of Arctic warming between 2010 and 2100 could be between $7 trillion and $90 trillion USD (Doyle 2017).
Environmental disasters are another costly negative impact of our reliance on fossil fuels. Extracting these fuels can be a dangerous endeavor, exemplified by the 2010 Deepwater Horizon oil spill in 2010. Costs associated with this disaster topped $65 billion USD (Bousso 2018). Coal mining and natural gas transportation hazards include suffocation, gas poisoning, gas explosions, and roof collapses. Fracking, a method of extracting shale gas by drilling into the earth and directing a high pressure water mixture to release the gas, has been implicated in earthquakes and tremors, and contaminates ground water.
And yet regardless of these issues, and in spite of global green energy activism, the percentage share of oil in global energy hasn’t changed much in 65 years, hovering around 30% (BP.com 2018). Why is this so?
One primary reason is simple: fossil fuels are very efficient. They are energy-dense, meaning a small amount of fuel will provide a large amount of energy. Europe’s switch from wood to coal gave rise to the Industrial Revolution due to the sudden increase in available energy (University of Arkansas Sustainability Blog 2017).
Another reason is that oil, coal, and natural gas are convenient. We know how to extract, transport, and store them; technologies for those activities continue to improve. Green alternatives such as wind and solar power are still being developed, and the cost of that development is a barrier to global adoption of those energies. Of particular concern is the limited ability to store and transport green energy, meaning that it’s mainly viable only in the location where it’s been collected (Rozenblat n.d.).
And, of course, the low cost of fossil fuel energy is a main reason these fuels remain the primary sources of global energy. As demand for fossil fuels slows somewhat, our supply of them is increasing – this supply and demand equation means lower prices for oil, coal, and natural gas, demonstrated in Figure 4.
Figure 4. Adapted from”Oil Prices Are Low. So Why Hasn’t Oil Production Fallen?” by Paulina Restrepo-Echavarria & Maria Aria (n.d.). Retrieved June 5, 2018 from https://www.stlouisfed.org/on-the-economy/2017/august/oil-prices-low-why-hasnt-oil-production-fallen
Another reason for fossil fuel primacy is they provide readily available and reliable energy to developing countries. That energy enables the production of goods, which can then be transported to market using trucks, boats, and planes – all powered by fossil fuels. This ability to enter global markets will account for much growth in poorer countries, and better lives for their inhabitants. This growth will create even greater demand for energy.
Figure 5 indicates the relationship between energy consumption per capita and GDP per capita for 99 countries, for each year between 1971 and 2010. The scatterplot moves to the right as countries become richer, but the slope is the same.
Figure 5. Adapted from “Energy and Economic Growth: The Animated GIF” by David Stern (2014). Retrieved June 8, 2018 from http://stochastictrend.blogspot.com/2014/06/energy-and-economic-growth-animated-gif.html
Will sustainable technologies trump affordable and accessible fossil fuels? Many commentators think not. The Energy Information Administration’s 2016 outlook indicated that fossil fuels will supply over 75 percent of the world’s fuel consumption through 2040 (IER 2016.) This forecast was echoed by BP (2016) While the demand for solid fuels including coal will decline steeply, Figure 6 shows that demand for oil and natural gas will remain strong and steady.
Figure 6. Adapted from “Fossil Fuels To Remain Dominant– UK Energy Projections” by Paul Homewood (2018). Retrieved May 30, 2018 from https://notalotofpeopleknowthat.wordpress.com/2018/01/12/fossil-fuels-to-remain-dominant-uk-energy-projections/
It appears that our addiction to cheap energy will continue unabated for the next few decades. While there are a great many social and environmental benefits to sustainable energy, the marketplace will determine the dominant fuel in the end. We will most likely continue our reliance on oil, coal, and natural gas until green energy technologies evolve to become economically competitive. Despite the many serious and negative consequences of our love affair with fossil fuels, the invisible hand of the market will still ensure that dirty energy trumps renewable fuel.
Outline
I. Negative Economic Impacts of Fossil Fuels
A. Air Pollution
1. Cost of Health Care, Lost Productivity
B. Climate Change
1. Threat to agriculture
2. Extreme weather patterns
3. Melting icecaps
C. Fracking
1. Linked to Earthquakes
2. Toxic contamination of drinking water
D. Environmental Disaster
1. Oil spills
2. Coal mine explosions
3. Gas pipeline explosions
II. Economic Benefits of Fossil Fuels
A. Low cost
1. Comparison between fossil and sustainable fuels
B. Easily transportable
2. Comparison of mobility of energy sources
C. Necessary for Developing Countries
1. Ease of Market Entry
2. Increased GDP
III. Forecasts
Annotated Bibliograhpy
Bousso, R. (2018). BP Deepwater Horizon costs balloon to $65 billion. [online] Available at: https://www.reuters.com/article/us-bp-deepwatrhorizon/bp-deepwater-horizon-costs-balloon-to-65-billion-idUSKBN1F50NL
This report details the burgeoning costs of clean up following the Deepwater Horizon oil spill in 2010. BP’s initial $2 billion cash payout estimate grew to over $3 billion, and clean up costs coupled with legal fees topped $63 billion. The article is relevant to my topic as it demonstrates the potentially astronomical cost of fossil fuel disasters.
BP.com. (2018). Statistical Review of World Energy 2016. [online] Available at: https://www.bp.com/content/dam/bp/pdf/energy-economics/statistical-review-2016/bp-statistical-review-of-world-energy-2016-full-report.pdf
BP’s Statistical Review of World Energy June 2016 gives a broad overview of the world energy market and provides charts and tables for in-depth review. Bob Dudley, BP’s Group Chief Executive, introduced this report by making several intriguing observations, such as the fact that at a little over 30%, the share of oil in global energy is almost exactly the same as 65 years earlier. Other crucial points were the deceleration of demand for oil, coal, and natural gas and a solid growth in supply. This supply and demand equation resulted in lower fossil fuel prices globally. This resource provides data to support my claim that fossil fuels will remain viable in the coming decades, as developing countries reap the benefits of lower energy costs.
Bralower, T. & Bice, D. (n.d.). The Economic Costs of Climate Change. [online] Available at: https://www.e-education.psu.edu/earth103/node/717
This article breaks down the various factors involved in accurately computing costs associated with climate change. Both market and non-market sectors are evaluated, showing that although costs incurred in non-market sectors are almost impossible to quantify, the fact that they will be incurred is important to note.
Doyle, A. (2017, April 24). Arctic ice melt hastening, could cost world economy trillions: Report. Available at: https://globalnews.ca/news/3401464/arctic-ice-melting-economy/
This article summarizes a study by 90 scientists with the goal of encouraging goverments with interests in the Arctic to work towards reducing the greenhouse gases that threaten the stability of permafrost and sea levels.
IER (2016, June 01). Fossil Fuels Will Remain World’s Dominant Fuels Through 2040.Available at: https://instituteforenergyresearch.org/analysis/fossil-fuels-will-remain-worlds-dominant-fuels-2040/
This report lays out the case for continued global dominance of fossil fuels despite emergence of new green technologies.
The Organisation for Economic Co-operation and Development (n.d.).The Economic Consequences of Outdoor Air Pollution. Available at: http://www.oecd.org/env/the-economic-consequences-of-outdoor-air-pollution-9789264257474-en.htm
Not A Lot Synonym
OECD presents an in-depth look at the expected costs of outdoor air pollution, seen through the lens of current global conditions. The report reflects the possible results of inaction in controlling outdoor air pollution.
Rozenblat, L. (n.d.). YOUR GUIDE TO RENEWABLE ENERGY. [online] Available at:http://www.renewable-energysources.com/
The author, a power supply design engineer, presents the levelized energy costs in comparing different energy technologies. These costs include the substantial investments required to implement raw energy such as wind and solar, balanced against traditional, well-developed fossil fuel sources. The cost comparison detailed in this article offers reasonable evidence that oil, coal, and natural gas will not be replaced by green energy in the foreseeable future.
University of Arkansas Sustainability Blog (2017, November 27). 3 Reasons We Are Still Using Fossil Fuels. Available at: https://wordpress.uark.edu/sustain/2016/07/20/3-reasons-we-are-still-using-fossil-fuels/
Http://notalotofpeopleknowthat.com
Although the authors of this blog strongly support the advance of green technology as necessary to preserve the global environment, they recognize the three most compelling reasons that fossil fuels remain dominant – efficiency, convenience, and logistics.
Paul Homewood Climate
Worland, J. (2016, September 09). Air Pollution: World Bank Says Costs Total in Trillions.[online] Available at: http://time.com/4484027/air-pollution-economic-toll-world-bank/
Not Many People Know That
The author outlines the true costs of both indoor and outdoor air pollution, including health, consumption, and lost income.