oil is too expensive
oil is too expensive
The tractors used to plough the land and harvest grains are running on fossil energy; so are trucks that bring fresh foods to the shops in the cities, and that buses, trains and cars we use to bring home our groceries. Our houses are kept cosily warm (or cooled) by energy. Everything we do - be that passive consumption or active production - involves energy. Thanks to its high energy density and liquid form that is ideal for transport oil has become the energy carrier of choice for mobile applications (cars, planes, etc.), coal thanks to low extraction cost for bandwidth electricity generation. The establishment of pipeline networks and fine distribution allows for natural gas to be deployed for different purposes. All in all, quite an astonishing infrastructure, from a purely technical and organisational point of view.
However, there are 2 major problems with fossil fuels:
Fossil fuel is biomass (plants and dead animals) that have been transformed into oil and gas through thousands of years of pressure and temperature under the surface of the earth. Supply of fossil energy is therefore not indefinite. Market prices are determined by supply and demand. While demand has and still is rising steadily (and is expected to rise further with economic development), supply is running thinner.
In order to satisfy demand under a business-as-usual scenario, we would have to find and develop the equivalent of 6 Saudi Arabia's until 2030 (refer to the IEA World Energy Outlook reports for details). Common sense suggest that the chances of finding those 6 Saudi Arabia is small, and geological evidence is even clearer. "Peak oil" - the point in time when oil production will plateau and start to decline due to geo-physical constraints - is happening. The only disputed issue is when exactly peak oil is happening. New frontier technologies (ultra-deep drilling several kilometres under sea-level, drilling in the arctic, fracking) might delay the inevitable for some time, but those new exploration technologies all have one thing in common: they are highly capital intensive and expensive (regardless and before the controversy regarding environmental safety). Whit demand remaining high and supplies starting to stall or fall, prices will go up. When and how much prices of fossil fuels will rise is subject to speculation, but what is clear is that the days of cheap oil are over.
Which means that investment in renewable energy are economically more viable already today.
A world based on different energy supply source is not only possible, but also cheaper than a continued subsidisation of the current aging and out-dated non-renewable energy system.
The rise of oil, gas, coal and nuclear fuel prices since 1985. Note that all energy carriers - including uranium - increase and fall in tandem.
Peak oil scenarios according to the different actors (EIA, IEA, academic reseach, and industry representatives (Exxon, BP). If a simple median model is applied, 2018 would be the year of peak global oil production. When peok oil occurs, demand will outstrip supply, further increasing global energy prices.
Regression analysis of fossil and nuclear fuel prices into the future. If past trends are to continue, a barrel of oil would cost more than Usd 250 by 2030