The City of Vancouver, and our Federal Gov’t, have made clear their opinion that fossil fuels are slated for phase-out in our society, because of world-wide concern over climate change. And their determination to help make it happen. Only our BC Provincial Gov’t continues to press the case for expanding production and investment in export of fossil fuels in the form of liquid natural gas and coal.
Voices in surprising places are rising to agree on the dim future of fossil fuels – including some whose large organizations currently depend on fossil fuels.
E. Hunter Harrison, CP Rail CEO (writes Ross Marowits in the Canadian Press), has spoken recently about the future of his business – hauling stuff. He thinks that hauling coal and oil will be a diminishing part of CP’s future, citing climate change as the fundamental driver of change and concern.
People need to get their heads around the idea that fossil fuels are “probably dead,” the CEO of Canadian Pacific Railway said Wednesday.
“I’m not maybe as green as I should be but I happen to think the climate is changing (and) they’re not going to fool me anymore,” Hunter Harrison told a J.P. Morgan transportation conference in New York.
The veteran rail executive said the transition to alternative fuels will be long, but new investments in traditional energy sources will dry up because of environmental hurdles.
P.S. Thanks, Mr. Harrison, for working to close the Arbutus Corridor sale. This transportation corridor will be treasured by the people of Vancouver for many decades to come.
Meanwhile, Energy UK (“the Voice of the Energy Industry”), a top lobby group, has flipped its position and now is campaigning for low-carbon alternatives in electricity generation. Terry Macalister writes in the Guardian about the change at Energy UK, whose members include some 80+ companies in the electricity and gas industries.
“The UK’s biggest energy lobbying group has shifted its position on green energy and will start campaigning for low-carbon alternatives for the first time, in what environmental campaigners are describing as a watershed moment.
Lawrence Slade, the chief executive of Energy UK, which represents the big six providers and has been regarded as a defender of fossil fuels, said the shift was urgent in order not to be left behind.
“No one wants to be running the next Nokia,” he said, referring to the mobile phone company that was overtaken by forward-looking rivals. “I want to drive change and move away from accepted (old-style) thinking.” . . .
. . . Energy UK now officially supports the government’s phasing out of coal-fired power stations and is critical of ministers over the way they have cut subsidies to wind and solar power so deeply and suddenly.”
This change is discussed in greater depth in Energy UK’s Feb 23, 2016 summary report “Pathways for the GB Electricity Sector to 2030”. Energy UK calls for increased focus on the demand side (energy efficiency) and decentralized production (such as by solar PV). The report is a bit fuzzy on growth in overall electrical demand, despite electrification in motor vehicle transport and space heating.
What caught my attention were the strong hints about massive investment and entrepreneurial opportunities awaiting those with courage and vision as we move to a low-carbon or no-carbon economy with more diversity in generation technology.
Electricity storage is widely regarded to be the single most important technological breakthrough likely to happen over the period to 2030 and a complete ‘game changer’ in the way that the power system operates. . . .
. . . Many agreed with the sense that the energy sector is about to go through the same sort of technology-led revolution that has been witnessed in telecommunications and banking in recent years. A number of interviewees highlighted that with storage, smart meters, time of use tariffs and half-hourly metering in place, the value of electricity exported back into the grid could change significantly, as well as the need for investment in the transmission and distribution grid to support and manage more complex energy flows at all levels in the system.
I read in the Globe’s Report on Business recently that Hydro Quebec has sunk $100M into research on electrical storage. I am not aware of any other Canadian public utility conducting R&D into such potentially highly rewarding fields. Canada needs to get off its butt with respect to R&D, innovation and increase its patent applications. Fossil fuels and other natural resources are a curse in that respect, and have made us lazy, like rich kids living off an inheritance.
HQ’s $100M may not be nearly enough considering all the research now being put into battery and capacitor electrical storage internationally. With wind and solar coming down so far in price so quickly they are now competing with coal and gas-fired electricity, and with the turning point at Paris guiding us away fro fossil fuels, timing will be everything.
Energy storage is important due to the intermittency of wind and solar power, and batteries and/or large-scale capacitors look very promising. But there are other ways to address this issue. The wind is always blowing somewhere. A national smart grid using high-voltage direct current lines will enable clean renewable power to be transferred within a province, or to the other side of the continent at the speed of light with very little loss through resistance. HVDC loses in the order of 3% of its power for every 1,000 km. It is possible for BC to export power to eastern Canada and have 90+% of it arrive intact.
Further, BC Hydro can offer the power at below-peak rates at 4:00 a.m. to blend with the peak morning drawdowns for Toronto, Montreal and even NYC ratepayers. That can be reversed and even exported to LA via Western Canada in the eastern off-peak hours with lower rates. The sharing of electricity and resulting savings from lower off-peak rates will provide an opportunity to offset the building of expensive new power plants everywhere, speed the transition to renewables, and help designate large sites across the country for industrial users to locate and use abundant emission-free power. I would love to see low-emission steel and cement become a Canadian invention.
Ken, Rachel Notley and Brad Wall join Christy Clark in wanting to continue the fossil business as usual. Notley hurredly introduced emissions limits and a carbon pricing scheme, but then immediately turned around and pled for approval of pipelines, while failing to acknowledge her emissions cap on the tar sands will still exceed the highest level of production achieved to date and pump even more gases into the atmosphere than ever before. And there is no recognition that emissions do not stop once the raw product is loaded onto a ship, or the embedded emissions in all the imported products we consume. Emissions do not require passports and freely cross boundaries, so our national calculation needs to be revised to include the consumption side of the ledger.
Moreover, neither Notley or Wall want to acknowledge the massive potential for solar on the southern Prairies, and vast wind power capability of the eastern slopes of the Rockies and northern Prairies. Exporting clean power is a no brainer with a national smart grid. As the US breadbasket dries up, the Prairies could foster a much stronger agricultural sector too not just for export, but to build our national food security. Then there are tech and innovation labs than can be established at their universities and business campuses. And financial and consulting services. Both the Alberta and Saskatchewan economies need to be diversified away from fossil fuels, which represents less than10% of the nation’s GDP. They need a diversification commission or something similar to define this evolutionary process and to develop strategies to bring it to fruition.
Not sure that everyone believes that peak demand is here or will be reached soon. It may be a way off, say 2040, especially gasoline within the entire transportation system. http://energyfuse.org/its-too-early-to-assume-peak-oil-demand-heres-why/ and then taper off slowly only and not drop like a rock.
Energy storage is critical, and batteries have severe limitations still. We will first see many second cars be electric due to range constraints and inconvenience when re-charging on longer trips. As such heavy users like cars used for longer distance, trucks, trains, ships or airplanes will see gasoline (or related) use for many more decades.
Cheaper electric cars will be more mainstream by say 2030 but even today they make up not even 1% of new cars, and once a car is purchased it will last 20 to 25+ years. So even if by 2030 25-40% of new cars are electric, and with more folks owning cars in Asia, S-America and Africa oil will be used for a long long time.
Weakening demand in China was a major factor in today’s oversupply of oil. However, China is also building renewables at an increasing pace to help offset the pollution-related death and illness rates from its coal-fired electrical plants, so demand may remain at current levels for a long time. China’s production of renewables has been so heavy that it single-handily brought down prices by orders of magnitude. Germany started the process, but China kicked it up several notches.
There is a glut of oil and gas in the US from fracking. Geologist and independent analyst Arthur Berman figures the US will need to sell one million barrels a day to rid itself of its glut. Last month’s sales were about 100,000 bpd. Berman estimates the glut is exacerbated by the Middle East and Russia keeping their spigots open. There is much doubt Saudi Arabia and Russia will be able to increase their supply above current levels, but Iran is now entering the oil auction markets, and therein prices may hit the 20s again, and low prices will not lower demand.
However, the introduction of carbon pricing, legislated emissions reductions, and affordable renewables worldwide are bound to lower demand for oil, perhaps on an incremental basis at first. Lower demand with an oversupply will really drag down the price.
I question any long term oil production forecast, like the one you linked to. The author probably confuses the entire resource with the small fraction that is technically and economically brought to market. He also does not acknowledge that the cheapest conventional oil supplies have peaked, including SA which started to waver in 2005 and is now on an undulating plateau of production, a natural supply curve phenomenon before the real decline sets in. Reports that looked at SA more closely discovered that Ghawar, the largest oil supergiant field in the world (in production for 60 years), went in to a steep decline in 2012 and they started injecting seawater and CO2 to try to maintain pressure without success. But national production was quickly underpinned by bringing a secondary field online. That is not reassuring because most of the secondaries are in decline too.
http://peakoilbarrel.com/wp-content/uploads/2014/05/Saudi-Arabia.png
Russia peaked in 2014 at 10.9 mbd. Alberta conventional oil and gas peaked a decade ago, and now they are into their expensive unconventional reserves (tar sands) that require much higher prices to exploit. Two of the five shale US plays are or are about to peak around 2020, and shale has extraordinarily steep decline rates. Moreover, many of the frackers are going bankrupt due to the higher costs and low prices. The North sea peaked in 1999 at 6.4 million barrels a day. Norway peaked in 2002 at 3.2 mbd. The list goes on.
All this leads to price volatility, and it’s foolish in my view for any jurisdiction to rely on unstable resource prices so heavily that they suffer from a damaging lack of diversity in their economies. And it’s equally foolish to believe anyone who predicts production, demand or price data for fossil fuels beyond 2020 without doing some background research, and questioning their sources.