Oil and Alternative Energy Sources: The Most Widespread Myths (Part 1)
The development of alternative energy sources and the use of new technologies in the production of traditional energy carriers have led to major changes in the global energy industry. The changes have opened up new perspectives and given rise to hopes and new predictions. At the same time, misconceptions and myths about former energy sources and further energy development have also emerged.
Myth #1
U.S. oil companies want to export oil - which means the U.S. has more oil than it needs for domestic needs.
In fact, We are talking about the desire of extractive companies to sell oil at the highest possible price. When selling oil in the United States, the profits of the producing companies are limited to the prices at which the refining companies are willing to buy oil from them.
If the ban on oil exports to the U.S. is lifted, producing companies will have an opportunity to sell oil at higher prices in other countries. It should also be taken into account that refineries are optimized for certain types of oil. For example, if refineries in Europe are short of Light Sweet crude, because Light Sweet crude previously supplied to these refineries from Libya is still not available, some European refineries could pay a higher price for Light Sweet crude from the Bakken field than local companies in the United States. That said, even taking into account the cost of supplying the oil, Producers can earn more from oil exports than from oil sales inside the U.S..
U.S. oil consumption in 2013 was 18.9 million barrels oil and petroleum products per day. At the same time the volume of oil imports was 6.2 million barrels per day. This suggests that the U.S. is, and is likely to continue to be, a major oil importer.
Moreover, if U.S. oil production and consumption remain constant, U.S. oil exports will lead to the need to increase oil imports. Imported oil may be of a different grade than exported oil. It may be a matter of importing heavy, high-sulfur oil while exporting light, low-sulfur oil. If the ban on U.S. oil exports is lifted, refiners in America who specialize in light, low-sulfur crude may also have to raise purchase prices to compete with foreign refineries that are willing to buy oil at a higher price.
One way or another, the desire to export oil at the current stage in itself does not reflect the overall picture of U.S. oil production. Rather, the willingness and ability to export light sulfur oil suggests that the world has accumulated a large number of refineries that are adapted to light, low-sulfur oil. This has happened because over the years heavy, high-sulfur crudes have dominated the world economy. Perhaps if oil production from shale formations continues to grow, the share of light sulfur oil in the world will begin to rise.
Myth #2
The economy doesn't need much energy.
Humans need a certain type of food to provide the energy they need to perform various tasks. In this respect, the world economy works in a similar way: it needs energy of a certain type to perform various tasks.
One of the key objectives of the economy is food production. In developing countries, food production, storage, and transportation play a very large role in the economy. In traditional societies, most of the energy comes from manual labor, the use of animal labor, and the burning of biomass.
In case any country with a developing economy decides to replace traditional energy sources with more modern energy carriers, the whole structure of the economy will change. This can be seen in the increasing use of energy sources other than biomass burning at the beginning of the 19th century.
The industrial revolution in Britain began at the end of the eighteenth century. It came from the extensive use of coal, which in turn made it possible to produce metals, glass, and cement on a much larger scale than before.
Without coal, many large cities in fairly cold climates, particularly London, faced the problem of deforestation. With coal, industrial processes that required a significant amount of energy became possible, but deforestation was no longer a problem. In addition, industrial processes with high energy consumption also became cheaper for the economy, since it was no longer necessary to cut down trees, make charcoal, and transport it over long distances (since most of the forests in the immediate vicinity of cities had already been cut down). The availability of charcoal made it possible to apply new technologies more actively.
The first steam engine was patented as early as 1608. The first commercial steam engine was in 1712. However, the active use of the steam engine required trains and wagons made of metal, which began to move on metal rails. Coal was needed to produce enough metal.
Also thanks to coal it became possible to use concrete and metal in industrial quantities to build hydroelectric power plants, which increased the amount of electricity available. It also became possible to manufacture devices similar to conventional incandescent light bulbs (in which metal and glass were used). The production of wires for transmitting electricity began in large quantities, which led to an increase in working hours.
The use of coal has also led to serious changes in agriculture. Steel plows and mowers that could be pulled by horses began to be made in large quantities. The number of people needed for farming declined. More people began to work in cities, in factories.
The world economy today is very different from what it was in 1820, largely because of increased energy consumption. Mankind possesses large cities, food and raw materials are transported long distances from the place of production to settlements and industrial centers. Plumbing and sanitation have greatly reduced the risks of disease in places where people live. Transportation that uses petroleum products or electricity has removed the need for animal-drawn vehicles (using animals).
If humanity were to try to leave the current high energy economy model and move to a system that would use biofuels, this transition would require dramatic changes.
Myth #3
The world economy could easily switch to renewable energy sources.
In Chart 1, the only renewable energy sources are hydroelectricity and biofuels. It is also worth noting that as energy consumption has grown, so has the population.
Energy consumption in 1820 can be seen as an initial stage. At this stage, energy was sufficient only to produce food, heat homes, produce clothing, and meet the needs of the simplest industrial processes. This relatively modest level of world economic development required just over 20 gigajoules of energy per capita.
At the current stage of development of the world economy total volume of biofuels as one of the main sources of energy, to which it is supposedly possible to easily and painlessly transfer the world economy, and hydroelectric power (graph №3) is about 11 gigajoules of energy. To reach the level of energy consumption per capita shown in 1820, it will be necessary either to introduce an additional energy source (e.g., coal) into the energy mix or to wait a very, very long time until renewable energy sources, including hydropower, can be substantially increased.
In addition, if we talk about renewable energy sourcesThe potential amount of energy generation would be even lower if we did not use traditional fossil fuels. Modern hydropower plants use coal, so this option will have to be ruled out. Modern biofuels, such as bioethanol, which is produced from corn, and biodiesel, which is produced from rapeseed, will also have to be excluded from the list of renewable energy sources, which can be used if conventional fossil fuels are completely abandoned. Large-scale production of bioethanol and biodiesel is possible only with a developed agriculture and transportation of fuel, which in turn depends on oil, petroleum products and the ability to produce metal in sufficient quantities.
It is worth adding that Wind and solar power are already included in the "biofuels" in Diagram 3. The volume of energy generation with their help is still very small. According to BP, in 2012 the share of wind power in global energy generation was 1%, solar power - only 0.2%. In addition, they will also have to be crossed out, since they require traditional fossil energy sources for production and transportation.
It must be taken into account that even if the volume of biofuel generation, without its modern types, can reach the 1820 figure, there is another big factor. The world's population today is about seven times what it was two hundred years ago. That is, in today's population values, biofuels could provide 1/7 of the energy consumption per capita compared to 1820. And even this figure could hardly be achieved. In the early 19th century, the number of horses used for transportation was much higher than today.