Is the Energy Transition Even Possible?

I recently read a startling quote by no less than Daniel Yergen in his 2011 book, The Quest: Energy, Security, and the Remaking of the Modern World, which shed light on the real challenges that the energy transition represents: 

“Can today’s $65 trillion world economy be sure it will have the energy it needs to be a $130 trillion economy in two decades? And to what degree can such an economy, which depends on carbon fuels for 80 percent of its energy, move to other diverse energy sources?”

We take it for granted that economic growth equates with the overall betterment of humanity. One of the central drivers of this growth has historically been cheap, reliable access to energy. The portability that the use of fossil fuels brought to the world has been the primary reason the world has been able to sustain economic growth and see a consistent decade-over-decade increase in the average standard of living around the globe. 

Considering that the world’s population has recently passed 8 billion people, the question that everyone seems almost afraid to ask is: Is the energy transition even possible? And if so, how much social and economic disruption could it lead to? Do we face a future where we need to destroy the only home we have? Or do we have to accept that large portions of the world’s future generations will have to sacrifice the fundamental goal that every parent holds: that their children’s future will be better and brighter than their own life has been? 

The challenge is quite simple. When a person could only rely on wood as a source of heat and fuel, the energy required to transport the wood from where it was to where it was needed only allowed effective movement over very short distances as the energy cost of moving the wood far outweighed the benefit. In other terms, the energy density of the wood was not high enough to allow for significant progress. The advent of charcoal and later the use of coal as a fuel led to the energy density going up sufficiently that the Industrial Revolution was born, allowing the concentration of energy in places where the benefit could be multiplied in the form of mechanical energy. The incorporation of oil into the mix, initially for lamp oil and later as a fuel for transport, heat, and energy, saw another step forward in energy density and, as a result, a significant step forward in human development. We sometimes forget in this story that wind and flowing water were used for centuries long before the Industrial Revolution came along. We have harnessed solar power in many ways, including drying food out for transport and better storage. Even rudimentary geothermal power has been used in limited areas to provide warmth in the winter. But the same challenges facing modern renewable energies today greatly limited their ability over past centuries to drive human development: their restricted areas of applicability, seasonality, and difficulty in transporting their energy benefits.

If we put the above in a simple thought experiment with a wish for a better future with several goals: 

• We want a future world where our children’s and grandchildren’s average standard of living is better than ours  

• We especially want this for those today who do not have a good quality of life, to raise their quality of life even faster than the average

• We believe that a world where access to healthcare, emergency response to disasters and education for all is a fundamental human right

• We want a future where the Earth is habitable for humans and for all forms of life

• We want to protect wild spaces, oceans, and the beauty of nature

• We sadly do not have a magic wand to make our dreams come true

Is this practical or even possible?

I believe the answer is yes, but only if we stop ignoring that hydrocarbons, particularly natural gas, play a fundamental role in making this future even remotely possible. Today, the energy density, portability, and availability of oil and gas cannot be matched. Even if the world had the money to develop all the clean energy we need over the next 20 years, which as Daniel Yergin pointed out, is not the amount we need today but likely two times that amount, the costs required will further drive a divide between rich and poor. 

The answer is “yes,” if we do the boring, hard work of figuring out where shutting down sources of highly contaminating energy makes more sense than fixing them, where investing in improving efficiency makes sense, where cleaning and reducing emissions makes sense, where rehabilitating lost forests and other carbon sinks make sense, where applying complementary conventional and renewable energies make sense. Of course, none of these ideas will fix the problem. Still, each can provide 10 or 20 percent of the solution without simply ignoring the belief that lesser developed areas deserve access to cheap affordable energy just like the more developed parts of the world have enjoyed over the last century. 

Let’s look at two examples of how much of a difference something as dull as improved efficiency can make. From 1975 to 2019, average fuel efficiency in US cars went from 13 to over 23 miles per gallon, an increase of 77 percent. But in reality, most of that increase came from 1975 to 1991 as legislation was brought into place due to the 1970s oil crisis, which drove innovation. In Mexico, average losses on the national electricity grid have reached as high as 20 percent. Recent efforts from CFE to complete maintenance activities have helped lower this number to close to 16 percent today. 

This is just an example of how smart and dedicated efforts can have a real impact. These changes are not as noteworthy as vote-catching announcements to cancel all oil and gas activity that virtually guarantee the remote areas will struggle to grow in the short and even medium term. It is concerted and coordinated efforts that may not win at the election polls that will make the difference. They will allow us to build the world we all want for the future, and all energy sources, renewables, cleaner forms of fossil fuels, especially natural gas, and innovation all have their roles to play.