IEA Says $ 5 Trillion needed to Prevent Global Warming

International Energy Agency (IEA) was established in November 1974 in response to the global oil crisis created by the Organization of the Petroleum Exporting Countries (OPEC) oil embargo. Its primary mandate was to promote energy security amongst its member countries by organizing a collective response to future oil embargo's or other disruptions in the oil supply. Over the years the mission has evolved to include holding global warming at 2°C by providing policy recommendations for ways to ensure reliable, clean energy for its 28 member countries (which includes the United States). The IEA has become a tracker of carbon dioxide releases and investment in carbon control technologies. They released their annual progress report to member countries on implementing clean energy and carbon dioxide controls worldwide geared to preventing global temperatures from increasing more than 2°C above pre-industrial levels called the Energy Technology Perspectives 2012 2°C Scenario Report, EDP 2DC for short .

Though filled with cheerful statement about accomplishments in installing solar panels and the growth in wind turbines, the report tells us that the world is not really doing that well at instituting clean energy technologies. The EDP 2DC, states that it is still feasible to prevent the earth’s temperature from rising more than 2 degrees Celsius if “timely and significant government policy action is taken, and a range of clean energy technologies are developed and deployed globally,” but we’re pretty much out of time. The government action required is spending more money, much more money. The money is to be spent for the development and implementation of clean technologies to reduce Energy related CO2 emissions by over 5 billion metric tons before 2020 and continue to fall thereafter to less than half of the current level while world population continues to grow. The IEA estimates that the  additional investment cost of achieving these carbon reductions would cost $5 trillion by 2020, but the countries would save $4 trillion (in future dollars) in fuel not burned from the scenario where the world just marches forward on its current path and doubles it’s fossil fuel use by 2050.

Worldwide CO2 emissions are up 6% from 2009, to over 30 billion metric tons, in 2010. Thirty billion metric tons of CO2 is an increase of 40% above the 1990 levels and it seems impossible that any group of policy recommendations will stop the increase in energy use in the emerging markets from continuing. The IEA estimates that the since 2000, China has more than tripled its installed capacity of coal power plants, while India’s capacity has increased by 50%. Unfortunately, they have not used to most efficient designs and technologies available in those plants. In addition, while the IEA strategy includes doubling the nuclear power capacity by 2025, almost 440 nuclear reactors in operation across the world remained virtually constant over the past decade, with 32 reactors shut down and the same number added to the grid. Overall, nuclear capacity increased by 6%, due to installation of larger reactors and power upgrades in existing reactors.  However, Germany, Belgium, Switzerland and Japan have developed plans to phase out their nuclear reactors in the next decade in response to the damage to the nuclear reactors that occurred in the Japanese tsunami. Finally, while wind and solar power have enjoyed significant growth in the past few years, the world economic climate has forced many nations (notably Germany and Spain) to reduce or eliminate solar incentives and IEA doubts that the growth rate in this area can be sustained. 

The worldwide level of CO2 is higher than the worst-case scenario outlined by climate experts just five years ago, but fortunately temperatures have not (yet) risen as projected by the climate models.  The relationship of climate change to worldwide CO2 levels may not be the one assumed in the climate models, nonetheless, the IEA report assumes the projections of the climate models are the absolute trajectory of global temperatures.  Recently,  the U.S.Environmental Protection Agency (EPA) announced total gross US emissions of CO2 equivalents in 2010 was to 6,822 million metric tons of carbon dioxide gross,and 5,746 million metric tons of CO2 net of the carbon sink of our forests. The peak of CO2 emissions in the US was 2007 and though emissions have increased since 2009, they are still below 2007 levels. This is true for most of the older first world nations whose carbon emission have already peaked or have slowed their growth significantly. Now the developed world is struggling with huge budget deficits, how to implement austerity measures and how to fund the entitlements programs, pensions, health care and other government promises. The emerging nations are sprinting to build power infrastructure in their nations where significant portions of their citizens do not have reliably available electric power or yet have cars. This does not seem to be a scenario where the recommended policies and strategies are likely to be implemented.

The IEA report talks about how technologies from electric vehicles, solar panels, nuclear generators, to wind farms and technologies to sequester carbon can make a decisive difference in limiting global temperature rise to 2°C above pre-industrial levels. EDS 2DC provides policies for nations on how to spend their way to a cleaner energy future. The IEA believes that the technologies with the greatest potential for energy and carbon dioxide (CO2) emissions savings are making the slowest progress: “carbon capture and storage (CCS) is not seeing the necessary rates of investment into full-scale demonstration projects and nearly one-half of new coal-fired power plants are still being built with inefficient technology; vehicle fuel-efficiency improvement is slow; and significant untapped energy-efficiency potential remains in the building and industry sectors.”

The development of carbon sequestion technology is a one of the big leaps of faith, but the implementation of energy saving strategies like insulation, efficient lighting and higher efficiency heating and air conditioning systems, on commercial and residential buildings are seemingly easy improvements because they show a short term and immediate return on investment and are simple to do. Commercial and residential buildings account for 32% of energy use and improved insulation and changes in temperature settings, lighting efficiency and other small choices could reduce world energy use 8-10% yet nations have failed to adopt regulations and implementation strategies to promote this. We have failed to accomplish even the most straight forward of the policy goals while spending huge amounts of money on renewable energy incentives. The IEA continues to pursue a mirage of a future where renewable energy and carbon sequestion will save us. Instead, IEA needs to spend their brain power and resources in developing strategies for living in the world we are going to find ourselves in. 

Energy Consumption in the US 2010

According to the US Energy Information Administration, the statistics branch of the Department of Energy, the US used 98 quadrillion BTU last year. Energy sources are measured in different physical units depending on the type of energy source: barrels of oil, cubic feet of natural gas, tons of coal, kilowatt hours of electricity. In the United States, British thermal units (Btu), a measure of heat energy, is a commonly used unit for comparing different types of energy. In 2010, U.S. primary energy use equaled 98 quadrillion (=E15, or one thousand trillion) Btu. If it helps to visualize this any better, that is equivalent to about 2,471 Mtoe (million tons of oil equivalent) the energy measurement standard used by the International Energy Agency, IEA, the keeper of world statistics. In a world with seven billion people the United States is estimated to have 310 million people, about 4% of the world’s population, 7% of the land mass and use about 14% of the energy (depending on how fast China and India are growing since the world energy data is about two years old).

In the United States the US Energy Information Administration collects and reports the energy statistics in quadrillion BTUs and has recently reported the summary data for 2010. These statistics paint a picture of who we are today. The major energy sources in the United States are petroleum-gas and oil (37%), natural gas (25%), coal (21%), nuclear (9%), and renewable energy primarily biomass and hydro power generation (8%). The United States only produces about 75% of the energy we consume, the shortfall is imported petroleum. The major users are heating of residential and commercial buildings (11%), industry (20%), transportation including cars, trucks, trains, planes and ships (27.4%), and electric power generation (40%).

The slightly complicated chart above shows the types of fuel and the sector that consumes it. Looking at petroleum, you can see that it supplies 37% of our energy needs. Transportation, cars, trucks, trains, planes and ships, uses 71% of petroleum and that petroleum provides 94% of the total energy used in transportation. Industry uses 22% of the total petroleum consumed by the United States to supply 40% of the energy used by industry. Studying all the details of the chart tells you a lot about the United States in 2010. It will also allow you to understand the impact that policies, regulation and scientific advances might have on the country.

For example, 92% of coal mined in the United States is used to generate electricity, regulations like the EPA’s Mercury and Air Toxics Standards and the Cross-State Air Pollution Rule affecting electricity generation are likely to impact coal use, cost of electricity, mining and mining regions. In 2010, of the 1,085.3 million short tons of coal produced in the United States, about 7.5% was exported, so if the number of coal fired electrical plants is decreased, the demand for coal to produce electricity is reduced, the amount of coal mined in the United States will decrease, the number of coal miners and employees of coal companies will decrease, the trains transporting coal and their employees will not be necessary, and the cost of electricity will increase as the electrical power industry builds new generation plants burning other fuels.
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Some primary energy sources, such as nuclear and coal, are entirely used in one sector, electrical generation. Others, like natural gas and renewables, are more evenly distributed across sectors. Similarly, while transportation is almost entirely dependent on petroleum, electric power uses a variety of fuels. Because the United States is the world’s largest oil importer, it may seem surprising that it also exports about 2 million barrels a day of refined petroleum products. It seems were are also an excellent oil refiner on the easily accessed Gulf Coast. Petroleum is used primarily for gasoline for cars (55%), diesel for trucks and heating oil (23%), propane and liquefied petroleum gases used in homes and farms for cooking, heating, and jet fuel (9%). The five biggest sources of net crude oil imported to the United States in 2010 were: Canada (25%), Saudi Arabia (12%), Nigeria (11%), Venezuela (10%), Mexico (9%). Policy decisions about a future Keystone pipeline may change that in the future. U.S. crude oil imports grew rapidly from mid-20th century until the late 1970s, but fell sharply from 1979 to 1985 because of restructuring the economy (manufacturing as a component of the economy was reduced), conservation, and improved efficiency. After 1985, the upward trend resumed, peaking at 10.1 million barrels per day in 2005, and falling to 9.2 million barrels per day in 2010.

Natural gas is the source of 25% of the energy consumed in the United States and in 2010 was used almost equally for industry, electrical generations and residential and commercial heating. Most, but not all, of the natural gas consumed in the United States is produced in the United States. Some natural gas is imported to the United States in the older Keystone pipelines. Natural gas is also being shipped to the United States as liquefied natural gas (LNG). U.S. natural gas production and consumption were nearly in balance through 1986 though U.S. production of natural gas peaked in 1973. From 1986 to 2006 consumption of natural gas outpaced production, and imports rose. Then in 2006 U.S. production of natural gas began to increase as a result of the development of more efficient and cost effective hydraulic fracturing techniques. In 2010 natural gas production in the United States reached the highest recorded annual total since 1973. Regulation and control of hydraulic fracturing will impact the cost of natural gas production in the United States, the availability of gas and the environmental impact to our natural resources.

In truth I am an old time engineer who learned to look at the world with a slide rule (calculators were just coming in and thought to be cheating). Through numbers I understand the world, policies and see relationships.

World CO2 Emissions and Durban

More than 10,000 ministers, officials, activists and scientists from 194 countries are meeting in Durban in what appears to be a last ditch attempt to extend the Koyoto treaty and to try and to try to tax all the developed nations to pay for climate impacts on poorer nations through the Green Fund for climate assistance. Durban, the 17th annual Conference of the Parties (COP17) to be held since the United Nations' first began to coordinate an attempt to control global warming through carbon dioxide control has reached the final stretch. At this point it appears that the conference will close without any agreement. The European Union refuses to extend without the United States and China committing and neither country appears likely to make any legally binding commitment. The Climate Change movement has lost its urgency. The failure to get any binding international agreement in Durban may be caused by the global economic problems or by the failure of the Global Warming/ Climate Change models to predict temperatures. Levels of greenhouse gases are higher than the worst-case scenario outlined by climate experts just four years ago, but temperatures have not risen as projected by the climate models.

The 1997 Kyoto Protocol bound developed countries to cuts of about 5-6% from 1990 levels in global emissions of greenhouse gases as represented by carbon dioxide by 2012. President George W. Bush rejected Kyoto in 2001, saying it did not impose emissions limits on emerging industrialized nations – chiefly China and India, and now China has surpassed the United States as the world largest emitter of greenhouse gases. China (6.9 billons tons in 2009), the United States (5.2 billion tons 2009), India, the Russian Federation (1.5 billion tons in 2009) and the European Union (3.0 billion tons in 2009) were the largest contributors to global emissions growth to a total of almost 30 billion tons of CO2 in 2009 (the specific breakout for 2010 was unavailable from the International Energy Agency, IEA, but the increase worldwide was about 6% 2010). Canada, who signed the Koyoto pact blew through their CO2 levels exceeding their 2000 levels and joined the United States as among the highest per capita emitters on the planet. Canada had agreed to cut emissions 6% below 1990 levels by 2012 as part of the Kyoto Protocol, but Canada’s emissions (0.7 billion tons in 2009) are now 17 % above 1990 levels, largely because of increased emissions related to the development of the Canadian oil industry. Canada failed to meet its Kyoto targets because they refused to take the large economic hit necessary for a big, cold, northern, sparsely populated, oil and natural gas producing nation to achieve them. There are no meaningful penalties for missing a Kyoto emission target. Even the most cooperative countries are missing their Kyoto targets.

However, Japan has been faithful to their word. Japan's Trade Ministry said on Tuesday emissions of CO2 fell 5.6 % to 1.075 billion tons in the year ended March 2010, bringing the Japanese below their Kyoto goal of 1.186 billion tons a year, when taking into account the volumes of carbon offsets Japan has bought from abroad. However, Japan announced that they are reconsidering plans to cut carbon-dioxide emissions by 25% by 2020 due to closing of a significant portion of its nuclear power generation, and the costs of the carbon-credit programs that cost the county almost $11 billion to purchase the carbon offsets by investing in carbon abatement programs in other countries.

The failure to get a binding international agreement in Durban has the Climate Model believers in a frenzy as CO2 emissions are up 6%, to over 30 billion tons, in 2010 40% above the 1990 level. This level of CO2 is higher than the worst-case scenario outlined by climate experts just four years ago. Securing a commitment from major polluters such as China and India to sign up to a Kyoto II in the future – a move spearheaded by the British and European Union Energy Secretaries appear doomed to failure. The failure to get a binding international agreement in Durban may be caused by the continuing steep rises in annual global CO2 emissions without an accompanying significant rise in global temperatures. Levels of greenhouse gases are higher than the worst-case scenario outlined by climate experts just four years ago, but temperatures have not risen as projected by the climate models. The relationship of climate change to worldwide CO2 levels may not be the one assumed in the climate models. In addition, the difficulty in reducing CO2 levels worldwide can be seen in the diagram above. Canada, Russia, and Japan withdrawing from the Koyoto Treaty and the United States not making a binding commitment despite President Obama’s commitment in Copenhagen to reduce United States emissions of CO2 17% by 2020 has doomed Durban.