Observer Research Foundation Mumbai

Ideas and Action for a Better India

The Pursuit of Energy

By Ameya Pimpalkhare

In the early 1990s, Kuwait along with the United Arab Emirates were blamed to wage an economic warfare against Iraq by over producing oil. They were held responsible for driving the oil prices; Iraq stated they would respond to the same. This soon resulted in a brutal annexation of Kuwait with an intention of removing it from the map. This would have put Iraq in a position to gain control over the Persian Gulf which at the time held two thirds of the world’s oil reserves. Having a huge armed force and added oil power, Iraq could project its influence and strength far beyond the Middle East rewriting the equations of world politics. These tensions resulted into the First Gulf war where Iraq was demeaned of its atrocious behaviour. Iraqis opened valves of the Kuwait’s Sea Island Oil Terminal releasing more than six million barrels of oil into the Persian Gulf, the largest oil spill in history, to protect themselves from an expected invasion by U.S. Marines. With a barbaric attitude of, ‘if we won’t get Kuwait, we would try and destroy it’, Iraqi soldiers set aflame eight hundred oil wells resulting in six million barrels of oil burning each day – a quantity more than China’s daily oil imports. It took about a year to put off these fires.

Almost all the countries in the Middle East region (which sell about 66 percent of oil in world markets), are constantly suffering from unrest. Most of the big developing countries around the world are wholly dependent on the oil this region sells. A small conflict in some of these countries result in big changes in the oil price now and again. These changes further make other economies experience turbulences in their national budgets. Such buyers seem vulnerable due to renewed uncertainty and insecurity about energy and are constantly in the anticipation of deeper crisis.

On the other side, the powerful earthquake in Japan in 2011 was one of the most disruptive in the recent times with immense damage to infrastructure. It also resulted in a big blow to the power supply of the country by knocking down the Fukushima Daiichi nuclear complex. The repercussions of this were even worse with power scarcity and rolling blackouts which displayed nothing but the vulnerability of the modern society to the sudden shortage of energy supply. The destructive aftermath was not limited locally but hit the global economy with loss of industrial production in Japan. North America and Europe were hit because of interruptions in global supply chains and reduced automobile and electronics production. This accident raised questions globally on nuclear power, which is considered essential to help meet power needs of the growing world economy. Germany in fact has taken a strong decision of shutting down all of its nuclear power plants by 2020.

“High energy consumption has always been a pre-requisite of political power” – Admiral Hyman Rickover, the greatest engineer of all times as described by President Jimmy Carter.

These narrations clearly highlight a fundamental reality – how important energy is to the world. There is a constant quest for energy on which we completely rely, for the position and rewards it offers alongwith the security it provides. There are these questions constantly out there – How would the modern world cope with rising energy demands? How the concerns about climate change and effects on environment be taken care of? How different would be the energy world of tomorrow? What would be the technologies and costs involved? How would every nation achieve its energy security?

The fear of running out of energy is been troubling people from a long time. The United Kingdom was the first fully industrialised country in the world. But for it to reach that point was at the cost of burning massive amounts of coal. In 1881, Lord Kelvin warned about Britain’s days of greatness being numbered because the coal stores of the world were exhausting, and not slowly. Even in those times, he mentions the relevance of windmills and wind motors fore-sighting that technology in the future.

The use of not only coal, but also oil and natural gas has been on an uprise since. In 1850 fossil fuels supplied about 5 percent of the world’s energy and the rest was being provided by men and animals; whereas by 1960 the Fossil Fuel Age had dawned, where coal, oil and natural gas were catering to 95 percent of the world’s energy. It was then predicted that with such exploitation of these resources, they would run out sometime soon by 2020. But it did not turn out that bleak, oil production is five times greater and with advancements in the drilling technology, previously inaccessible sources of oil and gas can now be reached. But would these progressions be enough not only to cater to our present $65 trillion global economy but soon to become $130 trillion global economy in just two decades? Will fuel be sufficient to power a world of almost one billion automobiles to a world of more than two billion automobiles?

This need of energy is made complex with the risk of insecurity which arises from vulnerability, the very threat of interruption and crisis. This can be corroborated with the usually unexpected energy supply disruptions post World War II. One very recent example being Russia getting hold of Crimea, giving them better access to the Black Sea, which holds an estimated 200-250 billion cubic meters of natural gas. In today’s digitalised world, there is also the risk of getting control over power providing systems in cities, trying to shut them off, causing blackouts, immobilising society. There are many such related risks and dangers and it is a need to expect them, prepare for them and ensure the resilience to respond to them, so as not to have to conclude that the consistent preparation was insufficient.

Enormous steps have been taken to address the traditional pollution concerns. Global warming, climate change, melting ice caps, increasing sea levels, etc. have been major political issues and are closely related to the future of energy. There is a need for new age energy, a mix that relies heavily on renewables and alternative sources. Innovation would be a critical across the energy spectrum. Every energy related technology can be and should be made disruptive in a sense to make it fit in the bigger picture. The conventional and unconventional sources of energy are strongly contesting in this new energy age and there needs to be more of this. This transition would soon be of great significance for the wider economy, for geopolitics and for the position of nations. Upcoming economies like China, Brazil and India are changing the global energy equations by becoming new customers of enormous energy requirements.

Renewable sources (like solar energy, wind energy, biomass energy, tidal energy, etc.); rapid expansions of liquefied natural gas and upcoming energy innovation like the shale gas (which can be a hundred year supply); nuclear fission and nuclear fusion are being looked at as sources to powering the world; and all such bases are dramatically changing the current and upcoming energy scenario. Decentralised energy production through renewables and the effect it can have on the existing centralised energy production which is via fossil fuels, is now visible in the bigger picture with some nations providing incentives and subsidies for the uptake of such alternative sources. But the industry of renewables is that of innovation, entrepreneurship, political wars, controversies, sometimes disappointment and despair, recovery and luck.

Taking into account all of the above birthplaces of energy and its carriers, the one very vital energy source is ‘energy conservation’ or ‘energy efficiency’; which most people do not think of as a source. It is hard to intellectualise and hard to organize and yet it can make the biggest contribution of all to the balance of energy in the coming years.

The world cannot operate without the colossal existing age of electricity and yet it is taken for granted by the developed world. For developing countries, a shortage of electricity takes a toll on people’s lives and on economic growth. The new age digital toys, right from personal computers to audio-video devices to smart phones and tables, all requiring increasing amounts of electricity and meeting those needs is a challenge in itself and needs tough decisions about the fuel choice to keep them powered.

In the years to come, the energy arena of the world would surely see surprises which will shake the current accord, change perspectives, alter both policies and investments and affect international relations. These may come out of different world associations or wars and terrorism or sudden changes in economies; or may come out of accidents or of nature’s rage; or may come of unpredicted technological discoveries that release new opportunities.

But of one thing there is a genuine certainty – the world’s hunger for energy in the coming years will grow enormously. The numbers and amounts are astounding. Whatever the mix, energy and its challenges will be defining our future.

Edited excerpts from ‘Introduction’ to the book ‘The Quest – Energy Security and the Remaking of the Modern World’ by Dan Yergin.

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This entry was posted on 08/01/2015 by in ORF Mumbai and tagged , , , , , .
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