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The Energy Problem - pptfun


									The Energy Problem
     Dimensions of the Energy Problem

   1930-1970: international economic and
    strategic problem
   1970s: security problem: Arab Embargo and
    the Iranian Revolution
   1990s: environmental problem: acid rain, coal
    burning, climate change
     The Issue Today is Changing

1.   Security concerns more pronounced
2.   Concern about climate and the environment
     more global and more urgent
        Some Factors Are Not Changing
   Laws of supply and demand still apply
   Oil supplies are not about to run out – although the cost of
    production will increase two to three-fold as the supply of
    cheap oil disappears
   There is one world oil market and thus complete
    independence is an unattainable goal
   The US has 250 years of coal, but limited reserves of oil and
    conventional gas
   Approximately 75% of the world’s oil reserves are located in
    the Middle East and 42% of the world’s gas is in Russia and
   Prices of energy commodities are extremely volatile
            But Others Are Changing

   Technologies for oil and gas production have improved
    immensely in the last twenty years
   Governments, not the major oil companies, own the
    vast majority of the world’s oil
   China, and to a lesser extent, India are becoming major
    players in all aspects of the energy market
   Natural gas is emerging as an internationally traded
          The Energy Security Problem

   Do you believe that over the next twenty years the
    Middle east will be more or less stable than over the
    previous twenty years?
   Do you believe that alternative providers of oil, such as
    Nigeria, Central Asia states, Russia, and Venezuela, are
    significantly more dependable?
   If world oil demand is to increase from 84 m/b/d to
    110 m/b/d over the next twenty five years, where will
    the additional 26 m/b/d come from?
         The Environmental Problems:
                 Two Views
   Some worry about the environmental effects of energy
    sources: air pollution from burning fossil fuels,
    accidents and proliferation from nuclear power plants,
    land use from hydroelectric facilities and renewable
   Others worry that environment constraints – both
    regulatory and political – are limiting our energy
    options: moratoria on oil and gas exploration and
    production; siting issues; and air, water, wetland, waste,
    and antiquities regulations
  Alternatives – No Silver Bullet
  OPTION             CHALLENGE
Oil             Must find ways to use oil more
                efficiently, especially in the
                transportation sectors

Natural gas     Will require investment in an
                unstable economic environment
                (Russia) or in unstable
                geopolitical environments (Iran,
                West Africa, and the Middle East)

Coal            Will require new technologies to
                reduce conventional and
                unconventional air emissions
                  Alternatives (con)

   Renewable Energy Options      Must identify sufficient land,
                                   sites and locations
                                  Must integrate into the
                                   existing electricity network
                                   (wind and solar)
                                  Must develop a complex
                                   infrastructure and new more
                                   efficient production processes
                                   (biomass, ethanol, and
                 Alternatives (con)
   Nuclear                         Must develop public trust

   Energy Efficiency               Must reduce market failures
                                     and barriers and convince
                                     millions of households and
                                     businesses to make

                                    Must design production
   Hydrogen                         technologies that require less

Source: John Holdren, adapted by author
   Historically, it has taken about 50 years to significantly
    change energy systems
   This time around the task is more complicated. There
    are more people in the world, there are more
    economies competing for energy sources and the value
    of the existing investment in existing infrastructure is
    much larger
   This transformation will occur in a world in which the
    availability of options will be constrained by the threat
    of climate change
                      Six Questions
1.   How do you attract sufficient investment in a market
     characterized by extremely volatile fuel prices?
2.   Investments in improved energy efficiency have three
     attractive characteristics – they are the least expensive, they
     have enormous potential, and they enjoy political
     popularity. Why have we done such a poor job in capturing
     this potential? What might be done going forward?
3.   Given concerns about the environment, nuclear
     proliferation, and energy security, is reconsideration of
     nuclear power a realistic option? Is it reasonable to expect
     that 100 new nuclear power generating stations will be
     build by 2026?
                    Questions (con)
4.   To reduce the US’s reliance on imported oil, motor vehicle
     efficiency must improve significantly and substantial amounts
     of substitute fuel must be developed and commercialized.
     What is the potential for achieving either over the next
     twenty years, and what new infrastructure will be needed to
     process, transport and deliver these substitutes?
5.   Energy projects have environmental footprints, some more
     than others. Is the balance between meeting our energy needs
     and protecting our environment being met? Is government,
     the media or business doing an adequate job of objectively
     communicating the environmental, safety and economic
     risks surrounding energy policies and projects?
                    Questions (con)

6.   Many people believe that designing and implementing a
     new energy vision will require political leadership – one
     willing to take political risks. In today’s world of multi-
     year campaigns, ideological polarization and large budget
     deficits, is such leadership likely to emerge? What
     conditions are necessary for this to occur?

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