Ignore The Green Puffery: Fossil Fuels Are Here To Stay

The easy thinking flies smoothly off the keyboard: “Fossil Fuels are Done”; “End of the Oil Era”; “The Inevitable Death of Natural Gas”; “The Demise of King Coal”; On and on, a parade of abstractions unconnected to the empirical world but sounding good, nevertheless.

Preying on everyone’s wish for a clean, healthy environment, special interest groups push their rhetoric far beyond the reality of what is happening in energy and what will continue to happen in the coming decades.

Far from being dead, dying, or moribund, fossil fuels are steadily expanding their contribution and keeping billions of people alive all over the world. More people, living longer, living better through fossil fuels.

The hard data tells the tale, and these data are readily available in the latest World Energy Outlook (WEO) by the International Energy Agency (IEA).

And by “hard data,” I mean absolute numbers, not the growth percentages frequently used to exaggerate the relevance of non-fossil sources like wind and solar.

Here is the reality:

• Over 81% of global energy demand is met by fossil fuels, which provide the equivalent of 11,595 million tons of oil (Mtoe)
• 64% of electricity generation comes from fossil fuels, including 38% from coal and 23% from natural gas
• Liquid fuels from oil provide some 95% of global transportation—moving people, raw materials, finished products, and agricultural goods.

More than one writer has hyperbolically averred that the COVID-19 crisis has “forever” changed energy demand and the recent trajectory of onward and upward will never return.

But the coronavirus notwithstanding, energy demand will resurge and continue to increase for decades to come.

China’s gasoline and diesel consumption are already back to pre-virus levels and daily coal burn at power plants is on the rise as factories reopen.

India’s fuel demand “is set to reach pre-coronavirus levels in June,” stated Indian Oil Minister Dharmendra Pradhan. Meanwhile, the IEA recently affirmed its projection that peak oil demand is “nowhere in sight.”

Finally, Fatih Birol, Executive Director of the IEA, puts the situation in perspective: “American business consultants using Zoom will not compensate for 150 million new urban residents in India and Africa traveling, working in factories and buying products transported by trucks.”

This is the shape of things to come.

Here are some numbers from the latest IEA “Current Policies Scenario” regarding the future role of fossil fuels:

• In 2030, fossil fuels will provide 79% of global energy demand and 13,398 Mtoe
• In 2040, fossil fuels will provide 78% of global energy demand and 14,952 Mtoe

For the record, even in the more ambitious “Stated Policies Scenario” of the IEA, fossil fuels still steadily increase, albeit at a slightly lower rate.

Nevertheless, in this alternative scenario, in 2030, 77% of energy demand is met by fossil fuels, and in 2040, the number is over 74%.

It is no surprise that these data receive little or no play in the media. It is much more exciting to write “man bites dog” stories than simply compose the same old, same old, pieces on continuity.

Stability and normality do not generate clickbait and obviously do not fit the agenda of those seeking dramatic change, however infeasible it may be.

Given this penchant toward hyperbole, it is easy to lose perspective on the role fossil fuels play and will continue to play, in virtually every society across the world.

The short-term perspectives of the media belie this fundamental fact, but Demography always wins in the end.

Well over 80 million people will be added to the global population this year—upwards of a quarter-million today alone or a new Philadelphia every week. By 2025, the global population will have increased by over 400 million.

If these people were a country, it would be the third-largest nation on earth. President Obama was correct in his assessment of needing “all of the above” even though his policies belied the mantra.

Consider oil—the overwhelming fuel for automobiles, tractors, trucks, airplanes, ships, etc. Demand was about 100 million b/d in 2019 and by 2025 is projected to reach over 105 million.

These increases in oil consumption will be the pattern for years to come. The IEA has stated, “there is no peak demand on the horizon.”

In the next two decades, billions of people will seek to enter the global middle class. The transportation sector will drive more than half of liquid fuel demand and trucks alone will consume 30 million b/d by 2050.

Petrochemical demand will add 7 million b/d. Few people other than Mark Mills recognize that even a 100x growth in the number of electric vehicles to 400 million on the roads by 2040 would displace only 5% of global oil demand.

Oil is here to stay.

And now electricity—an area where assumptions about the death of fossil fuels follow the Mark Twain pattern of being “greatly exaggerated.”

Electricity is the lifeblood of modern society and global demand for electric power has increased over 125% in the last 30 years, from 11,731 terawatt-hours (TWh) in 1990 to 26,603 TWh now.

Yet, despite this incredible progress, over one billion people do not have any electricity whatsoever and another two billion have severely limited access—e.g. two or three days a week or several hours a day.

Electricity poverty is rampant and for three billion people food is cooked on fires fueled by biomass—e.g., wood or dung.

Estimates are that over four million people die prematurely each year from diseases related to indoor air pollution.

Given the energy density of fossil fuels, they are the only sources that can scale up to meet this latent demand and pull billions out of electricity poverty.

Fossil fuels, especially coal, have already been the savior of billions of lives by providing electricity for clean water, sanitation, cooking, refrigeration, communication, and illumination.

China’s dramatic surge of electricity from coal is the best example and why the IEA called coal-based electrification an “economic miracle.”

Coal-based electricity was the foundation of this great leap forward not only for China but countries stretching back to the industrial revolution in England.

More recently, global coal generating capacity grew every single year between 2000 and 2019, nearly doubling from 1,066 GW to 2,079 GW. Further, about 500 GW of new coal capacity is either being built or planned.

The Current Policies Scenario of the IEA projects that in 2030, 11,464 TWh of electricity will be produced by coal—a 13% increase.

To be sure, the construction of coal plants is slowing down throughout much of the world, but the plants that have been put in place over the last decade, as well as those that will be become operational in the next decade, will form a modern, highly efficient core coal fleet that will last throughout the lifetime of many readers of this article.

In other parts of the world, natural gas, coal’s power generation counterpart, is on the dramatic upswing. Gas currently accounts for 6,118 TWh of electricity and by 2030 is projected to account for 8,086 TWh—an increase of 32%.

In other words, by the end of the present decade, the combined total electricity generation of coal and gas will be over 19,550 TWh—the equivalent of four times the electric power production of the United States—plus Russia.

Some critics may complain that I use the Current Policies Scenario of the IEA rather than the Stated Policy Scenario.

A point well is taken, but it is dangerous to deal with political hypotheses stretching out 10,20 or 30 years when the architects of those hypotheses will be long gone and never have to answer for their unfounded exuberance.

In fact, the IEA itself cautions that the Stated Policy Scenario merely describes “the direction in which today’s policy ambitions would take the energy sector.”

Regardless, in the interest of fair play, let us note that even in the Stated Policy Scenario coal generation will still increase by 2030 and pretty much plateau by 2040 but certainly not decline.

Growth of natural gas-based generation in this Scenario will still be dramatic, increasing from 6,118 TWh now to 7,529 TWh (+23%) by 2030 and 8,899 TWh (+45%) by 2040.

Although these data do not fit the preferred storyline of many pundits, it is abundantly clear that fossil fuels have been, are now, and will remain, the primary component of energy systems throughout the world.

Note: The IEA also presents a “Sustainable Development Scenario” that some may embrace as feasible. Not me. If one feels that in just 20 years, we can reduce fossil fuel consumption more than 30% while adding 1.5 billion people to the population without condemning several billion children, women and men to permanent energy poverty, our interpretations of the global energy situation are so far apart any interaction is meaningless.

Dr. Frank Clemente is Professor Emeritus of Social Science at Penn State University where he was the Director of the Environmental Policy Center.

Image by Nicole Köhler via Pixabay

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