“Energy Sustainability for the 21st Century” (2003 conclusions for today)

More than a decade ago, I penned a 175-page overview/primer for the London-based Institute of Economic Affairs (IEA), titled Climate Alarmism Reconsidered. This work was the result of a decade of studying, writing, and debating about climate and energy policy at Enron Corp where I was a full-time employee (1985–2001).

As director of public policy analysis, I was the Enron’s representative to the President’s Council on Sustainable Development (a Clinton/Gore task force). I also was involved with the World Energy Council drafting of Living in One World: Sustainability from an Economic Perspective, published in 2001. My comments, however, were rejected by the rest of the task force with distain; how could I not be alarmed at rising CO2 emissions, they stated. One member actually threatened to resign if my comments were incorporated in the draft.

The above experiences, as well as much tutelage from noted climatologist Gerald North of Texas A&M (an experience I describe here), as well as my own research in the free-market literature, resulted in my IEA effort post-Enron. In a way, it was also my rebuttal to the WEC task force.

The IEA described my effort as “a robust examination and critique of statist solutions to energy and environmental problems.” But is this primer relevant today? Judge for yourself by reviewing the ten conclusions (pp. 14–15) that composed the front Summary.

1. Positive economic and environmental trends suggest that fossil fuels will be increasingly “sustainable” in the 21^st century.
2. Improving trends with oil, gas, and coal will require that the breakthrough “discontinuities” needed for substitute technologies to become competitive will grow over time.
3. Anomalies in the case for catastrophic climate change make the global warming issue a transient political problem for fossil fuels rather than a death warrant.
4. The Kyoto-inspired energy strategy of mass energy conservation and substitutions to preferred renewable energies will fail if their enabling technology does not sufficiently improve to ensure affordability and convenience for consumers. Reduced living standards in the developed world and a continuation of poverty in the developing world are not politically or ethically tolerable in any energy evolution.
5. Currently uneconomical energy technologies are backstop sources for the future. These backstop energies at present include synthetic oil and gas from coal, central-station wind and solar electricity, and renewable and electric vehicles. Nuclear power is a backstop fuel in methane-prone regions of the world given that its cost is double the levelized cost of gas-fired combined-cycle units under today’s technologies.
6. The increasing range of backstop energies increases “energy security” over very long time horizons, although such security can be and has been “overbought” from government policies in the near term.
7. The market share of fossil-fuel energy is likely to increase in the 21^st century if the environmental movement succeeds in discouraging existing and new capacity of the two largest carbon-free energy sources, hydroelectricity and nuclear. This is because of sheer relative size: the current world market share of hydro and nuclear is thirteen times greater than non-hydro renewables.
8. Major discontinuities are as likely (and perhaps more likely) to occur within the fossil-fuel family than outside it. Two promising possibilities for early in the next century are substituting clean diesel for reformulated gasoline and commercially converting natural gas into oil products.
9. The intermittent characteristic of distributed wind and solar could make these energies bridge fuels to conventional energy in non-electrified regions of the world. If so, these distributed technologies would remain as backstop rather than primary energies in the 21^st century in large-scale applications.
10. The range of viable solar applications can be expected to increase over time (especially as space commercialization accelerates later in the 21st century) compared to wind turbines, which will increasingly face siting constraints in an environmentally conscious world.

Of course, what I did not foresee regarding points #6 and #8 was the oil and gas production breakthroughs of recent years, which has made the U.S. the world’s hydrocarbon leader and is now giving the hydrocarbon age an open-ended future.