FOSSIL FUELS

In January 2020, the new administration declared war on fossil fuels. They canceled pipelines, drilling and mining leases, and promoted an aggressive conversion to renewable energy sources. Prior to that, for the first time in decades, the US gained energy independence as a result of significant expansions in the exploration and production of fossil fuels. As a result of this new policy, there was a dramatic reduction in fossil fuels leading to a dependency on imported energy and a significant/record-breaking increase in prices. I don’t believe this policy is rational or based on a knowledge of the facts involved. It is politically motivated to support the movement against climate change. I think it is time to look at the facts and make a more rational assessment of the situation.

I am not a climate change denier. I’ve seen firsthand as well as the media reports on the impacts of climate change (e.g., dead coral reefs, receding glaciers, frequent severe weather events, droughts, etc.). So, I agree actions must be taken to prevent it from getting worse and possibly reversing it. But an immediate, dramatic reduction in the use of fossil fuels – both in the US and worldwide – is not practical. We just need to look at the facts.

Greenhouse gas emissions have been identified as the major cause of climate change. I don’t dispute that and believe that there has been a significant increase in greenhouse gas emissions since the onset of the Industrial Revolution – over 150 years ago. Carbon dioxide is the primary greenhouse gas emission through human activity and accounts for about 80% of all the US greenhouse gas emissions. Carbon dioxide enters the atmosphere through burning fossil fuels (coal, natural gas, oil), solid waste, trees and other biological material and also as a result of certain chemical reactions (e.g., manufacture of cement). Other greenhouse gases include methane, nitrous oxide and fluorinated hydrocarbons which come from a variety of agricultural and industrial processes. Over 60% of the carbon dioxide emissions come from transportation (e.g., cars and trucks) and electric power generation. I understand that burning fossil fuels is the largest source of greenhouse gas emissions and therefore deserves to be a priority in addressing the problem. But about 30% of greenhouse gas emissions come from other sources – not fossil fuels. So that is significant and also deserves attention.

So, let’s start by looking at some facts about fossil fuels.

Coal: Coal production and consumption in the US has been reducing dramatically for more than a decade – down about 50% from its peak in 2005. The US also exports about 15% of its coal production – primarily to countries in Asia. Over 90% of the coal produced in the US is consumed by the electric power industry. The rest has industrial and commercial uses – e.g., metal and cement production.

Oil: The US is the largest producer of crude oil in the world – followed by Russia, Saudi Arabia, Canada and Iraq. Together they comprise over 50% of the world’s crude oil production. The US is also the world’s largest consumer of oil – followed by China, India and Japan. The US consumes about 20% of the world’s oil production – which means that 80% is consumed by other countries – so any plan to reduce oil production and use must involve other countries. After a decade of increasing oil production in the US – facilitated in a large part by the use of new, more efficient techniques such as “fracking”– there was a significant reduction in the production of oil in the US in January 2020 (about 25%) as a result of the new Administration declaring “war” on the fossil fuel industry.

U.S. Crude Oil Production – Historical Chart

Crude oil has a lot of uses:

· ~ 65% used for transportation (gasoline, diesel, jet fuel)

· ~ 14% used for fuel oils (e.g., heating oil)

· ~21% used for petroleum products (propane, asphalt, petro-chemical feedstocks/plastics)

In the industrial sector, the petrochemical industry uses petroleum as a raw material (a feedstock) to make products such as plastics, polyurethane, solvents, lubricants and hundreds of other intermediate and end-user goods.

Natural Gas –The US is the largest producer of natural gas in the world (about 25% of the world’s production) followed by Russia with Iran a distant third. It is also the largest consumer of natural gas, but since production has increased significantly in the past decade, the US is now a net exporter of natural gas.

Natural gas has a number of important uses:

· ~ 31-34% used for electric power generation

· ~ 30-34% for cooking and heating (residential, industrial, commercial)

· ~18% exported (e.g., Liquified Natural Gas/LNG)

· ~ 8% Other (e.g., plastics, fertilizer)

The market price of natural gas, similar to crude oil, is very volatile and has been increasing in recent years.

Electric Vehicles

As part of the movement to combat climate change, there has been a great deal of advocacy to change quickly to electric vehicles and aggressively expand the capacity of renewable energy sources. So, let’s take a look at that.

Electric vehicles may be attractive – especially long-term – but is not practical to change over most, if not all, of motor vehicles in the world to electric. As of 2020, it was estimated that only about 1% of cars on the road globally were electric. And at this point, Europe and China lead the US. Most cars stay on the road 10-20 years before being replaced. So, even if there were a major commitment to convert to electric vehicles, we have a very long way to go. And this doesn’t account for the vast number of motor vehicles other than cars – e.g., trucks, buses, heavy equipment, military vehicles, etc. And in the case of many of these large vehicles, electric may never be practical. But even in the case of cars, there are number of important limitations and considerations that will limit the rate at which we convert to electric vehicles. First, the infrastructure is not in place to support electric vehicles. Currently, even in the US, the number of charging stations available is a small fraction of the number of gas pumps that we take for granted. And the current state of charging station technology can require hours to charge a car and may never be as quick as filling up the gas tank. Even when fully charged, most electric vehicles have a significantly lower range than gas-powered vehicles. They may be fun to drive, but they are currently a lot more expensive than most gas-powered vehicles and have a significant safety risk – battery fires. Over time, as the technology progresses, most of these problems may be overcome. But until then, I don’t think most people will convert to electric vehicles. I think that hybrid vehicles are more practical – less expensive and with a longer range than all-electric vehicles. And they are much more efficient than conventional gas-powered vehicles. That’s why I bought one! It is unreasonable to assume that there will be a significant conversion to electric vehicles anytime soon – and many may never convert (such as large trucks and heavy equipment). Cars, SUVs, and light trucks which use gasoline, together account for only about 40% of petroleum consumption. So, even when electric vehicles become more commonplace, there will still be a high demand for petroleum. But a significant increase in electric vehicles – as well as other electric products such as tools, lawnmowers, tractors, ATVs, etc. – will significantly increase the demand for electricity. This will require increased capacity for electric power generation and distribution – requiring a significant investment in the electric power infrastructure. So, let’s look at that.

Electric Power Generation

Renewable energy is often promoted as the solution to significantly reducing greenhouse gas emissions from electric power generation. Renewable energy sources include wind, hydroelectric, solar, biomass and geothermal. Together they account for about 20% of the energy sources for electric power generation in the US. Although they are growing, they each have limitations. Hydroelectric, biomass and geothermal are inherently limited to the natural resources that they depend on. So, there’s a lot of advocacy for significantly expanding the capacity of wind and solar power. Although the sources of wind and solar power seem limitless, windmills only turn when there is enough wind – not all the time. And solar panels only operate when the sun shines – not at night, not when it’s cloudy, not when it’s raining or snowing. So, typically less than half the time – and also not practical in many parts of the world. As a result, the power grid cannot depend on wind and solar as part of their fixed capacity. Until there are efficient solutions for energy storage, the power companies must build their capacity on other sources.

So, what are the sources of energy for electric power generation? The three major categories of energy for electricity generation are fossil fuels (coal, natural gas, and petroleum), nuclear energy, and renewable energy sources. Petroleum was the source of less than 1% of U.S. electricity generation in 2021, so it is really not a factor.

Fossil fuels (coal, gas, petroleum) provide more than 60% of the energy sources for electric power generation in the USA. The use of coal has come down dramatically over the past 15 years – and renewable energy sources have increased. But natural gas is now the largest source of energy for electric power generation – and has been increasing because it is less expensive and relatively clean compared to other sources. However, the total electric power generation in the US has not been increasing in the past 10 years – in part due to the efficiencies of new technologies (e.g., LED lighting) and energy-saving measures.

But, as mentioned above, if there is a significant increase in electric vehicles and other electric-powered products, the capacity of electric power generation will have to increase. And since renewables have inherent limitations (as discussed above), this will have to come from other sources as well. If we want to restrict the use of fossil fuels – perhaps to clean-burning and economical natural gas – then the best strategic source for increasing electric power generation is probably nuclear. The latest nuclear power technologies make possible smaller, safer and more efficient power plants than the earlier technologies that provide most of the nuclear power today.

Of course, there is still a significant problem with the disposal of spent nuclear fuel. Long-term, however, we continue to hope that practical fusion power will be developed – perhaps the ultimate solution.

Environmental Action

The “Paris Agreement” is an international treaty on climate change. It was adopted by 196 “Parties” in Paris on December 12, 2015 and went into effect on November 4, 2016. Its goal is to limit global warming to 1.5 degrees Celsius, compared to pre-industrial levels. To achieve this long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate neutral world by mid-century.

Although China is a signatory to the Agreement, they are not required to meet the same level of reductions as other developed countries – even though they are the world’s largest source of greenhouse gas emissions – by far!

So, the battle against climate change will require significant reductions in greenhouse gas emissions by all the major countries in the world. We are a long way from achieving that – and cannot without China. The US, while a major emitter, is the source of only about 10-15% of the world’s greenhouse gas emissions.

So, given these facts, what are some of the implications of this “war” on the fossil fuel industry?

• Even if we aggressively reduce the production and use of fossil fuels, there is still a significant demand for them that will not be replaced – at least in the foreseeable future:

o About 10% of coal production is not used for electric power generation – e.g., the production of steel and cement.

o About 50% of oil production has uses that cannot be easily replaced – e.g., jet fuel, diesel fuel for heavy equipment, heating oil, petro-chemicals, etc.

o About 70% - and probably more – of the uses of natural gas cannot be easily replaced – e.g., heating and cooking, plastics, fertilizer – and probably a lot of electric power generation.

• Electric vehicles have limitations and considerations that will restrict and lengthen the conversion from gas-powered vehicles. So, don’t expect that they will be a solution to greenhouse gas emissions in the foreseeable future.

• Emissions from electric power generation will not be solved by renewable energy sources. Greenhouse gas emissions can be reduced – but only with the help of nuclear power.

• The US cannot solve this problem by itself. In fact, its contribution to greenhouse gas emissions is only a small fraction of the world’s total. So, it will take a concerted effort on the part of all the major industrial countries to make significant progress – especially China.

• Burning fossil fuels is only one source of greenhouse gas emissions. If we don’t tackle the others – that comprise about 30% of the total – we won’t solve the problem.

I’m not a pessimist about fighting climate change, I’m just a realist. Too many in politics and the media advocate aggressive actions without the knowledge or understanding of the facts. We need to get politics out of this and get help from scientists, engineers and economists. This is important for humanity, so let’s get serious and rational about it!

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