Oil well in southeast Saskatchewan, with flared gas.

If all else is uncertain, how can growing demand for energy be guaranteed? A review of Vaclav Smil’s Natural Gas.

Near the end of his 2015 book Natural Gas: Fuel for the 21st Century, Vaclav Smil makes two statements which are curious in juxtaposition.

On page 211, he writes:

I will adhere to my steadfast refusal to engage in any long-term forecasting, but I will restate some basic contours of coming development before I review a long array of uncertainties ….”

And in the next paragraph:

Given the scale of existing energy demand and the inevitability of its further growth, it is quite impossible that during the twenty-first century, natural gas could come to occupy such a dominant position in the global primary energy supply as wood did in the preindustrial era or as coal did until the middle of the twentieth century.”

If you think that second statement sounds like a long-term forecast, that makes two of us. But apparently to Smil it is not a forecast to say that the growth of energy demand is inevitable, and it’s not a forecast to state with certainty that natural gas cannot become the dominant energy source during the twenty-first century – these are simply “basic contours of coming development.” Let’s investigate.

An oddly indiscriminate name

Natural Gas is a general survey of the sources and uses of what Smil calls the fuel with “an oddly indiscriminate name”. It begins much as it ends: with a strongly-stated forecast (or “basic contour”, if you prefer) about the scale of natural gas and other fossil fuel usage relative to other energy sources.

why dwell on the resources of a fossil fuel and why extol its advantages at a time when renewable fuels and decentralized electricity generation converting solar radiation and wind are poised to take over the global energy supply. That may be a fashionable narrative – but it is wrong, and there will be no rapid takeover by the new renewables. We are a fossil-fueled civilization, and we will continue to be one for decades to come as the pace of grand energy transition to new forms of energy is inherently slow.” – Vaclav Smil, preface to Natural Gas

And in the next paragraph:

Share of new renewables in the global commercial primary energy supply will keep on increasing, but a more consequential energy transition of the coming decades will be from coal and crude oil to natural gas.”

In support of his view that a transition away from fossil fuel reliance will take at least several decades, Smil looks at major energy source transitions over the past two hundred years. These transitions have indeed been multi-decadal or multi-generational processes.

Obvious absence of any acceleration in successive transitions is significant: moving from coal to oil has been no faster than moving from traditional biofuels to coal – and substituting coal and oil by natural gas has been measurably slower than the two preceding shifts.” – Natural Gas, page 154

It would seem obvious that global trade and communications were far less developed 150 years ago, and that would be one major reason why the transition from traditional biofuels to coal proceeded slowly on a global scale. Smil cites another reason why successive transitions have been so slow:

Scale of the requisite transitions is the main reason why natural gas shares of the TPES [Total Primary Energy System] have been slower to rise: replicating a relative rise needs much more energy in a growing system. … going from 5 to 25% of natural gas required nearly eight times more energy than accomplishing the identical coal-to-oil shift.” – Natural Gas, page 155

Open-pit coal mine in south-east Saskatchewan.

Open-pit coal mine in south-east Saskatchewan. June 2014.

Today only – you’ll love our low, low prices!

There is another obvious reason why transitions from coal to oil, and from oil to natural gas, could have been expected to move slowly throughout the last 100 years: there have been abundant supplies of easily accessible, and therefore cheap, coal and oil. When a new energy source was brought online, the result was a further increase in total energy consumption, instead of any rapid shift in the relative share of different sources.

The role of price in influencing demand is easy to ignore when the price is low. But that’s not a condition we can count on for the coming decades.

Returning to Smil’s “basic contour” that total energy demand will inevitably rise, that would imply that energy prices will inevitably remain relatively low – because there is effective demand for a product only to the extent that people can afford to buy it.

Remarkably, however, even as he states confidently that demand must grow, Smil notes the major uncertainty about the investment needed simply to maintain existing levels of supply:

if the first decade of the twenty-first century was a trendsetter, then all fossil energy sources will cost substantially more, both to develop new capacities and to maintain production of established projects at least at today’s levels. … The IEA estimates that between 2014 and 2035, the total investment in energy supply will have to reach just over $40 trillion if the world is to meet the expected demand, with some 60% destined to maintain existing output and 40% to supply the rising requirements. The likelihood of meeting this need will be determined by many other interrelated factors.” – Natural Gas, page 212

What is happening here? Both Smil and the IEA are cognizant of the uncertain effects of rising prices on supply, while graphing demand steadily upward as if price has no effect. This is not how economies function in the real world, of course.

Likewise, we cannot assume that because total energy demand kept rising throughout the twentieth century, it must continue to rise through the twenty-first century. On the contrary, if energy supplies are difficult to access and therefore much more costly, then we should also expect demand to grow much more slowly, to stop growing, or to fall.

Falling demand, in turn, would have a major impact on the possibility of a rapid change in the relative share of demand met by different sources. In very simple terms, if we increased total supply of renewable energy rapidly (as we are doing now), but the total energy demand were dropping rapidly, then the relative share of renewables in the energy market could increase even more rapidly.

Smil’s failure to consider such a scenario (indeed, his peremptory dismissal of the possibility of such a scenario) is one of the major weaknesses of his approach. Acceptance of business-as-usual as a reliable baseline may strike some people as conservative. But there is nothing cautious about ignoring one of the fundamental factors of economics, and nothing safe in assuming that the historically rare condition of abundant cheap energy must somehow continue indefinitely.

In closing, just a few words about the implications of Smil’s work as it relates to the threat of climate change. In Natural Gas, he provides much valuable background on the relative amounts of carbon emissions produced by all of our major energy sources. He explains why natural gas is the best of the fossil fuels in terms of energy output relative to carbon emissions (while noting that leaks of natural gas – methane – could in fact outweigh the savings in carbon emissions). He explains that the carbon intensity of our economies has dropped as we have gradually moved from coal to oil to natural gas.

But he also makes it clear that this relative decarbonisation has been far too slow to stave off the threat of climate change.

If he turns out to be right that total energy demand will keep rising, that there will only be a slow transition from other fossil fuels to natural gas, and that the transition away from all fossil fuels will be slower still, then the chances of avoiding catastrophic climate change will be slim indeed.

Top photo: Oil well in southeast Saskatchewan, with flared gas. June 2014.