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5
0
0
100
Tight
CBM
Shale
Sour
Total LNG 1000 km
200
300
400
500
600
700 800 900 Pipeline Resources (tcm)
LNG
5
Transportation cost ($2008 per MBtu)
10
Deepwater
10 Arctic
15
Conventional
The cost of exploiting gas resources. Source: IEA
15
Produced
Production cost ($2008 per MBtu)
17
0
Estimated size of gas resources in trillion m3 and the production cost range.
Pulling in the same direction >> China and India have aggressive growth plans for nuclear energy, but identification of long-term solutions for nuclear waste is an important constraint on its growth potential. Solar power is expected to account for 2.3% of the world’s total power demand by 2020. On a global scale, there will be no shortage of “primary energy” in the next decade. However, there are huge geographical differences in availability, and exploration and processing capacities are likely to be bottlenecks that could lead to energy shortages.
Renewables provide more energy from domestic resources, and hence reduce the need for imported energy. Part of the reason for both the EU Renewables Directive and the U.S. Energy Independence and Security Act is to reduce dependence on imported energy through the development of domestic renewable sources. Another reason is to build strong local suppliers that can compete in the global arena. Similar initiatives can be seen in China, India, and Singapore. However,
current renewable energy sources usually deliver energy at a higher price than traditional carbon-based sources. Thus, there is the risk of being tempted to protect domestic industries by offering traditional energy at a more competitive price, rather than switching to renewable sources. The winners in this scenario will be those who can balance the transition to renewables, while simultaneously maintiaing a strong GDP growth. Several countries have shown that this is possible.
Towards a low carbon future The period from 2010 – 2020 may be the start of a transition towards a low carbon economy. However, the transition is off to a tough start. The financial crisis of 2008 and 2009 has rocked the general public’s belief in business and governments, and the failure to reach a concrete global agreement in Copenhagen in 2009 on reductions in emissions further eroded this confidence. There are, nevertheless, several positive signs. The renewable directive from the European Union, makes a mandatory commitment for its member states to cut CO2 emissions by 20 % by 2020. The comprehensive American energy-climate bill, currently called the ”American Power Act”, aims to reduce the nationwide GHG emissions by 17 % below the 2005 level, through a combination of carbon pricing, promotion of CCS, and financial and employment incentives for nuclear and renewable energies.
Leading companies are showing the way In their report “Vision 2050”, The World Business Council for Sustainable Development describes various ways in which the world can cut its CO2 emissions by 50 % before 2050. The report has been endorsed by the CEOs of 29 leading companies. However the report presents very few solutions for the coming decade, considering instead the 2050 perspective. A survey among leading Nordic companies has shown that the majority of the companies have energy / environment
World oil production
100
Uncertainties and disruptors
mill. barrels/d
80
Unconventional oil 60
Natural gas liquids Crude oil (to be found)
40
Crude oil (to be developed) 20 0
/ sustainability as part of their business agenda and strategy. Best-in-class companies create significant value by adapting the way in which they conduct business, and 70 % of the companies have achieved cost reduction through focusing on energy efficiency, optimising transport etc., with a direct impact on CO2 emissions.
Crude oil (currently producing) Total crude oil 1990 1995 2000 2005 2010 2015 2020
Peak oil production will occur after 2020 (in New Policies Scenario). Source: OECD/IEA 2010
•• Increase in frequency and intensity of extreme weather events and subsequent damage to property and lives •• Changes in seasonal rains that seriously disturb agriculture that depends on being directly rain-fed (no irrigation is available) •• Ocean acidification as a result of increasing atmospheric CO2 concentrations •• Cool winters over several years in NE USA and Europe due to changing winds and ocean currents connected to the Arctic •• Temporary cooling due to volcanic eruptions (e.g. Pinatubo 1991) provide false sense of security from longer-term climate change