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Transitions: Life Beyond the Oil Patch

The following infomation about the shift to new energies is excerpted from 
Chapter 17 – Transition: Life Beyond the Oil Patch of AEI's award-winning bookTurning the Corner: Energy Solutions for the 21st Century.

A major energy revolution is just around the corner, and, with adequate assistance, guidance, and a bit of luck, it will arrive in time to stave off a potentially disastrous energy crisis. The slow transition from our historic reliance on nonrenewable fossil fuels to renewable, decentralized, and carbon-free energy has already begun. It will require a panoply of new alternative energy systems, coupled with strong public demand for clean and green power, to wean ourselves from polluting fossil fuels. This transition to alternative energy won't be quick or easy, but the well-being of every future generation of Americans will rely on the decisions we act on today.

The United States was blessed with good geology and endowed with vast primordial reserves of coal, oil, and natural gas, but after more than 100 years of heavy consumption, that scenario has markedly changed. These fossil fuels account for the vast bulk of global energy supply, but they formed over millions of years and are finite and nonrenewable. There are still substantial coal reserves buried in the continental US, but the environmental and health costs associated with using this carbon-rich energy source as a primary fuel are prohibitive. Once-abundant petroleum and natural gas fields are being rapidly depleted and becoming increasingly expensive to produce. The US once led the world in oil output, but is now a densely drilled, mature producing region in which oil production has been declining for 30 years. As recently as 1950, the United States was producing half the world's oil, but now its proven reserves amount to only 3% of global petroleum assets. Indicative of declining domestic production in the US, during the 1950s, oil producers discovered about 50 barrels of oil for every barrel invested in drilling and pumping. Today, the world finds only one new barrel of oil for every four it consumes.

As we begin the 21st century, a large number of the giant older fields that anchor the world's hydrocarbon production base (including the North Sea — a key non-OPEC producing region), have now started to decline. Petroleum geologists have warned for 50 years that global oil production would "peak" and begin its inevitable decline within a decade or two of the year 2000. As the inevitable apex of world petroleum production looms ever closer, policies encouraging conservation, more efficient energy use, and the development of alternative energy sources are urgently needed. A major obstacle is that renewable energy systems can generate only a fraction of the power now being produced by fossil fuels. Hard choices will have to be made by government, industry, and the American public if the US economy is going to survive the inevitable transition from a world swimming in inexpensive oil to one without enough to meet global demand.

The long, potentially disruptive journey to carbon-free energy has already begun with incremental baby steps such as the scattered implementation of wind, solar, biomass gasification, geothermal, and other renewable energy systems. Energy-producing technologies that draw on renewable sources avoid the severe environmental impacts of the fossil fuel cycle. Wind power has really taken wing in the last decade, boasting double-digit growth. Western Europe has installed the bulk of the world's wind turbines so far, but, between 1990 and 2000, global generating capacity posted an impressive average growth rate of 24% per year. In Japan, five companies that generate electricity from wind have formed an industry association to encourage and promote wind-power generation in that country. Japan is the world's fourth largest energy consumer and second largest energy importer after the United States. The island nation lacks significant domestic sources of energy and must import substantial amounts of crude oil, natural gas, and other energy resources, such as uranium.

For decades, proponents of renewable energy systems such as wind and solar power have been fighting an uphill battle against an entrenched fossil-fuel industry. Like David versus Goliath, oil companies and electric utilities that have billions of dollars already invested in infrastructure and inventory have been unwilling to switch to buying from alternative energy providers, which are not yet cost-competitive on the open market. Fossil fuels are cheaper only when environmental and health costs are ignored, but an energy market that considered the total cost to society of our energy choices would greatly encourage the deployment of renewable energy technologies. Big Oil can read the writing on the wall and is transforming itself into a more diversified energy business. Although real profits with renewable energy are some way down the road, corporations that sell hydrocarbons know that a long-range strategy that includes environmental policies is good for business.

There are many optimists who believe that America can quit guzzling oil and natural gas and switch to clean and renewable sources of energy like solar and wind power without disrupting our high material living standard. One thing is for sure, the 21st century will be a world with many different energy systems combined to help us make the transition to sustainable energy use. Back in 1994, British scientist and statesman Sir Crispin Tickell wrote, "We have done remarkably little to reduce our dependence on a fuel [oil] which is a limited resource and for which there is no comprehensive substitute in prospect." It's time we did something about that. If not now, when? If not us, who?