A mini-series on the future of energy
By Dave Wilkin, P. Eng., M.Eng. and Tim Lutton, BSc., MBA
Our previous articles explored the big-system factors driving the global energy-ecosystem: growth, reserves, technology, and geopolitics. We now describe one possible, really bad scenario that shows how they are interconnected, with potentially disastrous consequences. If we haven’t got your attention yet, perhaps this scenario might do the trick.
Let’s consider this scenario
Let’s say that by the 2030’s, China’s ‘belt and road’ multi-trillion $ initiative has boosted economic development and growth in Asia, Africa and beyond. This ensures the More Energy scenario plays out, pushing up energy demand by 50 per cent, swamping all efficiency gains and costly greener energy technologies.
Concurrently, the unsustainable technology-driven US tight shale oil boom is over, as recoverable reserves fall into steep decline and costs soar. US energy exports and their energy independence has ended. Meanwhile, continuing Canadian political ineptness has prevented any new pipelines from reaching our tidewaters, so Canada is unable to sell to the increasingly energy hungry foreign markets. Faced with declining domestic reserves, the US now looks north to our vast oil sands reserves. With no new global customers, and a weakened economy from years of flawed energy policy, Canada has no other option but to sell its incremental oil to the US, and at below world prices. But years of underinvestment has hollowed out Canada’s oil sector; scaling up production to meet new US demand takes far too long. Alberta has had enough of Ottawa’s bungled energy policies, triggering serious actions to separate from Canada and join the US so that it can reinvigorate its energy resource sector and sell more product to the US and beyond.
Heavy oil rich Venezuela, plagued with continuing bad governance and increasing meddling by Russia, can’t get its energy exports back on track either. Europe, Asia and a now rising Africa, all unable to transition to meaningful alternative energy sources, have become completely captive to Middle Eastern and Russian oil and gas. When Middle East reserves turn-out to be less than previously reported, these growing demands finally push them into decline, driving world energy prices through the roof. Russia, with decades of unencumbered oil and gas reserves remaining, is thrilled.
The continued receding of Arctic ice cover opens new shipping lanes, and combined with rising energy prices, brings new (unconventional) energy exploration and development in the most environmentally sensitive regions on earth. A more energy worried China now kicks its “Polar Silk Road” into high gear, in partnership with energy superpower Russia; environmental risks be damned. Serious conflicts with the US and other Arctic bordering nations follows, all playing out on our ignored northern doorstep.
The many energy insecure nations in Europe and Asia, having closed their remaining nuclear plants and unable to move to still costly renewable energy fast enough, now face serious long -erm energy security risks. Most turn to increased coal consumption to meet affordable energy needs. Carbon capture and storage remains far too expensive for most nations, and the small amount deployed is insignificant in the face of high carbon energy demand growth.
Higher temperatures and energy costs negatively impact the poorest, most populous and least able to adapt countries, driving unrest and creating a wave of global migration. This destabilizes the receiving developed countries and further weakens the developing countries. It also pushes CO2 emissions higher, as countries receiving the migrants have much higher carbon energy intensities per capita.
As oil and gas prices move higher, so too do the products and services dependent on them, including critical petrochemical products, such as plastics and fertilizers. With these reinforcing feedback loops now firmly entrenched, a tipping point is crossed, and the entire global economic system becomes unstable. Having delayed the spending necessary to build a diverse, sustainable future energy infrastructure, time has run out. Burdened from decades of unsustainable growing debt, and addiction to continual growth, the world economies sink into a deep recession. With few good options and little mutual trust left, a global economic collapse soon follows. Canada is not spared.
This is a worst-case scenario, unlikely perhaps but not impossible. The question is what do we need to do now, to make sure this scenario never occurs? Our next and final article in the series examines a better path forward for Canada. Watch for it!
Previous articles in this series –
A mini-series on the future of energy, by Dave Wilkin and Tim Lutton
The Energy big picture, by Dave Wilkin and Tim Lutton
Growth, the global energy driver ~ by Dave Wilkin and Tim Lutton
The Geopolitics of Energy ~ by Dave Wilkin and Tim Lutton
The greener technologies offer no silver bullet ~ by Dave Wilkin and Tim Lutton
Dave Wilkin is a Professional Engineer who lives in Huntsville. He is an electrical engineer with a career spanning 35 years in IT, banking and consulting.
Tim Lutton worked in the natural gas and LNG industry for 32 years; with Imperial Oil in Canada, and ExxonMobil in the USA, Australia and Qatar and now lives in Huntsville.
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Ray Vowels says
Just a lot more gloom and doom as I see it. I’m waiting for next week to see what they come up with that will fix the problem.
Bob Slater says
WOW! Sad day when we need to destroy our life style, our country .. when Canada’s contribution to climate change or global warming .. whatever is the ‘catch’ phrase of the day … is only 1.5% of the total to the ‘catch’ phrase.! Folks do some research ..and ..read and ..understand and don’t be fooled by those who promote ..YOU ..paying carbon tax($$) … that no matter how you want to slice it …is nothing more than a new revenue ($$$) tool for the FEDS! SOMEONE out there …please tell me how ME paying all this carbon tax is going to stop the ‘catch’ phrase of the day? I enjoy my lifestyle .. DRIVING, RV’ing boating, ATV’ing, lawn tractor, ice auger, etc etc! What are we all to do? .. move to city, live in a condo, bicycle everywhere, walk and forget about EVERYTHING .. that requires a combustion engine? Folks ..consider the impact and consequence of all the carbon tax and what is happening with money collected? Nothing more than a NEW revenue tool!
Hugh Holland says
Good work guys. Doom and gloom? Absolutely. Impossible? Absolutely not. The roof on our greenhouse (CO2 in the atmosphere) has been getting thicker for decades. White polar ice reflects heat. Black water absorbs heat. When all the polar ice is melted, there will be nothing left to retard the snowballing effect. There will be no turning back. Like serious health problems, the cure cannot begin until the patient acknowledges the problem.
Success or failure will depend on electing leaders with a realistic understanding and a well-balanced set of solutions. The idea of continuing a responsible level of oil and gas production by cleaner methods may seem counter-intuitive, but that is the only way to avoid piling an energy crisis on top of a climate crisis.
It is like trying to stretch and share the finite supply of this year’s food between those with lots of food and those with no food, until both can grow enough of next year’s food. Growing the new food too slowly, will kill them all. Eating or just deciding to cut off the old food too quickly, will kill them all. We have a collective moral responsibility to find a sustainable balance; to be fair to all concerned.
Rob Millman says
This article reminds me so much of “An Inconvenient Truth”. One wonders what might have happened if Al Gore had been given the Presidency he won; only to have it stolen by Jeb Bush and the chad conspiracy in Florida.
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My continuing memory from that excellent picture is the huge scales, with gold bars in one tray, and the Earth in the other tray. When we destroy the Earth, it’s inevitable that economies (represented by the gold bars) have nothing from which to draw sustenance.
Tom Holinshead says
Consumer self control, imperative needs only.
Tom Holinshead-5th generation local Agricultural Professional (150 years of regenerative farming) sadly this gives me no voice whatsoever……
Jim Boyes says
Bob,
You and a lot of other folks are concerned about threatened post fossil fuels lifestyle.
All the protesters are comfortable in their lives which very much depend on fuels and chemicals derived from fossil energy. They obviously haven’t thought it through.
With the cost of housing in the big cities thousands have been forced to commute to less expensive and desirable distant locations to live. It all takes energy, mostly gasoline and electric cars won’t help in the numbers required at affordable prices.
In my opinion the protesting and activism is well organized and part of the constant pressure being applied by nefarious interests who’s plan is to keep Canada from successfully exploiting our energy riches and benefit by them. Its ok for the Americans and so many others to profit handsomely by energy exploitation but not Canada? The school children and other useful idiots especially our schools who have blindly jumped onto the environmental band wagon are hastening their own doom.
Where is the major expose of the sources of funding for all this opposition to Canadian success? Alberta is conducting some inquiries and I believe it needs to get to the bottom it. We’re being played big time.
As things are progressing (intended pun) Canadians are being played for fools and sheep volunteering for slaughter.
Trudeau is engaging in wholesale giveaway bribery of voters making promises he can’t pay for without borrowing the money. The latest is offering low income and immigrant families $2,000 each which has to be used for camping! Where will this stupidity end?
People living in other than major population centers need to wake up and recognize the crap-storm heading our way if this environmental hysteria becomes entrenched and actually makes it into policy.
Poor Canada!
Susan Godfrey says
Once again, thank you Hugh for being the voice of reason. I think you’ve shone a light on the real and present threat we face..illustrating how we, as world/earth citizens have to take full responsibility (regardless how any one of us feels about climate change) for choosing how to proceed. Voting is a first step…I hope we will all exercise our right, and privilege, to do so on October 21.
Dave Wilkin says
Sadly, politicians around the world are incapable of dealing with what’s eventually coming. Unlike “climate disaster”, which is not certain, depletion of affordable oil & gas reserves is a certainty, and it’s likely within our children’s lifetime. As we wrote in our article on global growth, it seems mankind is on the growth treadmill (until it breaks).
Long term planning and investments is something few people do, or can afford to do, so no surprises I guess.
Hugh Holland says
Better check your facts Jim. It is Andrew Scheer who is offering money to pay for kids recreation, or Trudeau.
John McCaig says
Sorry about the correct facts, Hugh. Jim is right – Liberal platform says $ 2,000 for city and immigrant kids to go camping. Scheer offers tax credit for sports and cultural registrations.
Hugh Holland says
I stand corrected John. You and Jim are both correct. Properly managed, these are both good programs. Anything to help kids realize there is more to life than digital devices and social media is a good thing.