Final week I had the chance to speak with over 300 members in an Australian Sensible Power Council webinar. It was organized to use my uncommon timezone alignment with Oz as I spend a number of weeks in New Zealand as a digital nomad. Over 600 signed up, anticipating to hearken to the recording later. That recording is underneath the hyperlink within the opening sentence, by the way in which.
The organizer Steve Blume, former President of the Council, and I believed it will be helpful to reply a lot of the dozens of questions in articles and share with the registrants as effectively. That is the fourth of some articles with responses, which shall be aggregated and shared by the Council as effectively for members. The primary article was on aviation and maritime delivery questions, the second coated biofuels and HVDC and the third handled hydrogen.
The framing of my ready remarks was the Radical Electrification of Transportation. I’ve revealed quite a bit on the topic as I’ve dug by most modes over the previous 15 years.
To summarize my presentation, all floor transportation will electrify. That’s automobiles, vehicles, buses, utility autos, trains, and mining autos. All inland delivery and two-thirds of brief sea delivery will electrify, with solely the longest routes requiring biofuels. Delivery and rail may even drop in tonnage attributable to removing of bulk fossil fuels from masses. Aviation shall be disrupted by electrical regional air mobility, autonomous flight, and digital air site visitors management, and solely trans-oceanic flights would require biofuels in 50 years.
Which means the billions of tons of fossil fuels per 12 months requirement for extraction, processing, refinement, and distribution are going away and being changed by tens of tens of millions of tons of expertise metals akin to lithium and cobalt, in addition to a number of hundred million tons of biofuels for aviation and maritime delivery. That’s all very doable.
The ready remarks skimmed over all of that in half-hour or so, leaving far too little time for questions, and so I’ve chosen to answer most of them in writing.
Oil corporations proceed their quest for exploiting the seabeds for brand spanking new fields of oil and the like. Given the state of affairs introduced right here, are they prone to change into stranded property?
In fact. Peak oil demand is looming this decade. When it happens, the very best value oil and gasoline shall be first off the market. That features Alberta and Venezuela’s heavy and bitter crudes, which can change into more and more costly to course of and refine as hydrogen decarbonizes, quite a lot of unconventional oils like shale and CO2 EOR, and the extra excessive situation fields. As time goes by, the lightest, sweetest crude that’s best to pump and closest to water shall be nearly the one oil left in the marketplace.
A number of oil and gasoline infrastructure shall be stranded property. The Canadian Trans Mountain pipeline growth is prone to see solely 50% utilization at peak and be bankrupt in 2040, for my part. The 5 million kilometers of oil and gasoline pipelines within the USA shall be scrapped or just rust underground.
The price of establishing a working effectively offshore or within the Arctic shall be prohibitive in that market. A number of stranded fossil gas property and collapsing reserve values coming within the subsequent 30 years.
There are lots of individuals who work for O&G Majors who’re passionate concerning the vitality transition however are pissed off by the shortage of strategic route and tempo at which these companies are transitioning. What steering do you have got for these of us on the within to genuinely need to shift their strategic route in the direction of extra sustainable vitality kinds?
Two or three issues. If you’re in an oil and gasoline main that isn’t named Orsted, it’s unlikely that they will change. Latest actions by the fossil gas majors make it clear that they’re paring all pointless bills — clearly the lobbying and PR efforts just like the fraction of 1% of revenues they spend on CCS to delay local weather motion are important bills — and extracting as a lot of their reserves as they’ll earlier than the bitter finish.
Discover an adjoining market agency, presumably one named Orsted, the place your abilities are transferable. If you wish to do one thing beneficial and optimistic, and you’ve got the privilege of having the ability to go away regular employment or an employment alternative in hand. Whereas there’s going to be quite a lot of work in oil, gasoline and coal because it declines, there are lots of people who aren’t you who can do it. You probably have expertise and drive, apply it in areas which can truly transfer the local weather change needle.
If you’re in a gasoline utility, then apply Christenson and Raynor’s steering from The Innovator’s Resolution. First, persuade your Board and regulatory physique that they face an existential menace with utility loss of life spiral, the scenario the place they’ve a declining variety of clients however the identical bills to keep up the complete service community.
Then pivot to the upper revenue resolution, the place the utility turns off the gasoline grid one sub-isolation community at a time, beginning with the very best value to function and keep ones. Because the grid shrinks, revenue margins improve a bit. Present readability and help to your clients for the transition.
Look to Utrecht for the sample.
At what degree of $/MWHr era value (excluding transmission and distribution prices) will fossil gasoline not be capable to compete with renewables, and what’s the impact on the economies of nations wealthy in gasoline reserves?
Properly, that’s already the case in a lot of the world. Energy buy agreements for wind and photo voltaic are effectively underneath these for coal, gasoline and nuclear vegetation. If it wasn’t for day forward reserves, firming and peak electrical energy provide, gasoline vegetation wouldn’t have an financial leg to face on.
It’s solely coal’s hideous adverse externalities of approaching 80 pollution-forced deaths per plant per 12 months, mercury poisoning, acid rain, and large CO2 emission which have led to a lot demand for pure gasoline over the previous 30 years. However that’s coming to a fast finish.
My projection for peak pure gasoline is within the mid-2030s. With continued large construct out of renewables and storage, and with photo voltaic+storage already being cheaper at offering peak electrical energy in quite a lot of locations, pure gasoline demand for era goes to be critically challenged. LNG imports to some international locations like Japan will proceed gone rational finish dates as a result of Japanese vitality coverage is so irrational.
For international locations with a excessive use of pure gasoline for heating, that’s going to break down quickly too. Constructing water and house heating is already significantly better with warmth pumps 99% of the time. 45% of commercial warmth is under 200° Celsius, and present warmth pumps don’t have any drawback offering that. District heating methods are placing in 20 and 30 MW warmth pumps to satisfy their heating wants with low-carbon electrical energy as an alternative of pure gasoline.
For economies ‘wealthy’ in gasoline reserves, that signifies that they may see plummeting export and home gross sales until they drive propping up pure gasoline home consumption over rational financial and local weather coverage, and lots of international locations will for some time.
However an economic system operating on renewables and electrical energy with electrical energy offering warmth and energy is a really excessive effectivity, low-energy value economic system that’s resistant to carbon border changes. It’s a rustic with out the adverse well being impacts of fossil fuels which might be a drain on productiveness.
An electrified economic system will, all else being equal, out compete non-electrified economies. Fuel reliant economies will wither.
And so, one other few questions requested and answered from the Australian viewers. Stayed tune for extra on geopolitics, nuclear vitality and including worth to Australian sources.
I do not like paywalls. You do not like paywalls. Who likes paywalls? Right here at CleanTechnica, we carried out a restricted paywall for some time, however it at all times felt unsuitable — and it was at all times robust to resolve what we must always put behind there. In concept, your most unique and greatest content material goes behind a paywall. However then fewer individuals learn it! We simply do not like paywalls, and so we have determined to ditch ours.
Sadly, the media enterprise continues to be a tricky, cut-throat enterprise with tiny margins. It is a endless Olympic problem to remain above water and even maybe — gasp — develop. So …