National Commentary

The Peak Oil Crisis: We Are Starting To Dim.

While waiting to see how the contest between a demand-killing recession and shrinking oil stockpiles plays out, it might be worthwhile to spend a little time reviewing the world’s electricity situation. If there is any form of energy that would be sorely missed by people who had once had it, electricity would be it.

Private cars we could do without, but not our lights and appliances. Most of us here in America have been blessed to have an unlimited amount of electricity for all of our adult lives. There are very few left who can remember a time when it was not universally available.

Although it has received scant coverage in the U.S. media, in many parts of the world, the electric grids are shutting down for long periods each day. In a few places the electricity is now off most of the time. Some of this is due to droughts which have reduced the hydroelectric generating capacity in many parts of the world. Some is due to the price of oil which has simply become too expensive to use in thermoelectric generating stations and in a few places the electricity is out or has been greatly reduced because of civil strife. Iraq, Nigeria, Gaza and Pakistan are the most prominent instances of the latter. Even the climate has contributed to the problem as a wave of unusually cold weather has enveloped the Middle East, Central Asia and Siberia, forcing many to use electric heat as their only means of survival.

Currently, there is some form of power shortage starting in southern China and ranging south to Vietnam and then westward across the subcontinent to Africa. Parts of Bangladesh, India, Nepal, Pakistan, Iran, Iraq, and many places in central and southern Africa have reported shortages. These range from minor inconveniences to cities where the economy is close to shutting down. Problems have been reported in Central and South America and nearly everywhere where oil-fired power plants are used to generate electricity.

Thus far the developed countries have largely avoided problems due to better electrical infrastructures, domestic fuel supplies, or the ability to pay whatever it costs to obtain the necessary fuel. In effect, the rich have outbid the poor who are now suffering the consequences.

The key question is where is all this going? Are these shortages temporary or is the age of electricity, the way it is currently being generated, over for much of the world? The future of the droughts which are reducing much of the world’s food production as well as hydroelectric production is unknowable. In theory increasing temperatures should increase evaporation and produce more rain, but whether this will happen in the right place at the right time cannot be foreseen.

What we do know is that mountain glaciers are disappearing rapidly. To the extent that melt water contributes to hydroelectric potential, particularly in China, and the subcontinent, we can safely say this resource for generating hydroelectricity will diminish steadily in coming years.

From a peak oil perspective, electricity generated by oil and natural gas does not have a future. Already high oil prices are making petroleum products too expensive for electricity generation in much of the world. The substantial increase in the price of petroleum which is bound to come in the next five to ten years will almost certainly reduce or nearly eliminate the use of oil-fired power stations in places without a domestic source of petroleum.

Currently the use of small generators to replace power from national grids is sweeping the underdeveloped world. Businesses using computers simply cannot function without electricity. In many of the world’s largest cities there is an unbearable racket as these un-muffled devices have replaced national grids as the reliable source of power for much of the day. In addition to the noise, the downside of small generators is their high operating costs for they are a very inefficient way to produce electricity. As prices rise and oil shortages grow only the most affluent business and individuals will be able to afford them.

At the root of the electricity problem is the growth of the world’s population and economy. The earth’s population is currently increasing by about 77 million people a year. Throw in a pretty good world economic growth rate and you can see where the problem is coming from.

 China is the most interesting case. Growing at 11 percent a year, Beijing just announced that China’s electric generating capacity is now 700 gigawatts. This may not sound impressive, until you learn that they could be surpassing the U.S. in few years and last year they added more capacity than all of Britain’s power stations combined. Seventy-eight percent of this generating capacity comes from coal. To maintain this rate of growth, China, which used to export 100 million tons a year, has become a net-importer of coal with imports increasing 34 percent last year to 51 million tons. World coal prices increased 73 percent in 2007 because of this demand.

With coal price increases mirroring those of oil, the chances are we won’t be seeing much switching to coal fired stations, unless you have some really big coal fields in your country or are very rich.

If you are poor, you can forget nuclear power and all those advanced solar, wind and wave generators. Their cost is likely to skyrocket and the rich are likely to have a lock on production for decades.

Sad as it may seem, we may have a situation shaping up where the world will shortly be divided into countries that have general access to electricity and those who don’t. If you have a good source of domestic fuel for generation, then you are probably in good shape. If you don’t, you probably won’t be able to afford to import it for the competition will be fierce.

What this means for the billions around the world that will be without it is difficult to contemplate. They can certainly forget electric cars for awhile and it is a good bet their governments will restrict or maybe even eliminate household use. Whatever electricity is still available will be used to pump water, maintain communications, public services, and some amount of industry.

 

 

 

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