Since 2011, the decision to investment in renewable energy has been a popular topic of discussion. For a long time, corporate exposed an interested in sustainability for public relations than profit. However, faced with decreasing exhaustible nonrenewable resources and climate change from the use of fossil energy, investors and companies are looking to sustainable investments.
What will be left of Earth’s non-renewable resources?
Most non-renewable resources listed above in the dataset will be depleted in the next ~40 years. Of course, this is if the production continues at the current rates. If we look at the image below, if production continues to grow at the current rates we can see a greater impact. Note: the growth percentage for the fossil fuels used was the mean annual consumption growth based on 10 years 1999-2009 (Oil 1%, Natural Gas 2%, and Coal 4%). According to BP, global oil consumption grew 8% in 2014, while natural gas and coal consumption each increased by 4%.
Looking specifically at the four major nonrenewable energy: oil, natural gas, coal, uranium (nuclear energy), we can identify that out of all fossil fuels coal will last the longest. But for how long?
Developing renewable energy has become a good means to counteract climate change and alternative to fossil energy consumption. However, renewable energy requires abundant financial support. Let’s look at wind energy industry, the country’s fastest growing energy sector. The wind energy industry has grown since the Production Tax Credit (PTC) in the 1990s. The final extension of the PTC and ITC occurred in the FY16 Omnibus Appropriations Bill, passed on December 18, 2015, included a five-year extension and phase-down of the PTC. Due to this policy certainty, wind energy can grow to supply 10% of U.S. electricity by 2020 and support additional jobs. Wind power employs just over 100,000 Americans according to new data released by the U.S. Department of Energy (DOE), more than nuclear, natural gas, coal, or hydroelectric power plants.
The bulk of the opponents to the growth of the wind energy industry are generators of forms of energy, who believe that by subsidizing wind, the government is increasing supply to the market and in result impacting the prices for electricity. However, it is important to note that all forms of energy receive government support. For the United States to continue to be a leader in the production and supply of energy, U.S. energy companies must be diversified and invest in both renewable and nonrenewable fuels.
Sources
- Institute For Energy Research, Global Consumption of Fossil Fuels Continues to Increase http://instituteforenergyresearch.org/analysis/global-consumption-of-fossil-fuels-continues-to-increase/
- Subsidies in carbon finance for promoting renewable energy development http://www.sciencedirect.com/science/article/pii/S0959652616312264
- Wind Power Developers Race Clock to Secure Subsidy http://www.nytimes.com/2013/12/26/business/energy-environment/wind-power-developers-race-clock-to-secure-subsidy.html?pagewanted=2&_r=0
- Have we reached the tipping point for investing in renewable energy? https://www.theguardian.com/sustainable-business/2016/feb/13/renewable-energy-investment-fossil-fuel-divestment-investor-summit-climate-change
[Group 3, Week 1 Response]
ReplyDeleteSubsidies for Renewable Energy is a controversial issue. First, economists would argue that if lower cost materials are available then we should invest in these until the price reaches a point where renewable energy is on par. This will occur when either the price of traditional energy increases, or better technology is used for renewable energy, making renewable energy competitively priced with fossil fuels. Second, if the government subsidizes the creation of energy, taxpayers are now doubly disadvantaged, paying more for less-economical renewable energy and also paying more in taxes, resulting in some dead weight loss. The only issue with the pure economic view, is making sure we are taking into account the real cost of pollution as this will not show up on a company’s balance sheet. Tough to say where the balance is.
As to depletion, this assumes that technology won’t increase to allow the extraction from new sources or better efficiency in consuming. For example, fracking and horizontal drilling has allowed for Natural Gas extraction to occur. The finding of the Marcellus Shale has made the US the “Saudi Arabia” of Natural Gas, and was unknown to exist or unavailable for sourcing just 20 years ago. How many other sources are out there we don’t know of? Perhaps by the time we need to “reach” for these harder-to-get-to sources, the price will increase to incent renewable fuels (ideally simultaneously with more efficient renewable power generation).
Lastly, power density is an issue with renewable fuels. 1 nuclear plant can produce 50x the amount of power in the same space of land. Furthermore, if we start displacing land to create renewable power, does the displacement of food production create a net loss.
Neutral articles are hard to find on this subject. Here are two. I take the stats with a grain of salt, but they are probably in the ball park:
This article is an opinion piece, but provides a good summary on power density: https://www.forbes.com/2010/05/11/renewables-energy-oil-economy-opinions-contributors-robert-bryce.html#
Good discussion on wind energy (note the comment how wind energy not economical compared to NG, for now – I’m sure this will change): http://windenergyfoundation.org/about-wind-energy/economics/
An interesting first post, but I think there are a couple of areas it could be strengthened:
ReplyDelete1) In-line Citation/Referencing: Since you only listed sources at the end I can’t tell where which pieces of information came from where, or what was your original research. Are the graphs you have included your own work or were they produced by another author? Since you didn’t include a source or methodological notes on the graphs, I (as the reader) can’t tell what they are presenting.
2) The resource depletion graph, which is basically a graph of Reserve to Production ratios are useful metrics for comparing firms but you should remember what they are not showing as well. Even if technology did not advance (which it will), new mineral resources will be identified, confirmed, and included in the official estimates of confirmed reserves. This is especially true when increases commodity prices will increase the incentive for firms to identify and confirm new mineral reserves. Presenting a graph that indicates we will run out of a given resource in X years based solely upon the confirmed reserves is highly misleading.
3) The resource depletion graphs appears to be saying have already run out of a great number of resources. For instance, in the upper graph, copper, gold, lead, silver, tin, and zinc all have depletion dates in the past (assuming static consumption rates). I think this indicates a problem with the dataset you are using, as we still mine all of these minerals from primary sources.
4) In 2015 U.S. utility-scale wind capacity grew 5% while utility-scale solar grew 41% according to the EIA Electric Power Annual Table 1.1. Omitting citations from your post means the reader can’t understand what source you utilized to support a statement. (Source: https://www.eia.gov/electricity/annual/html/epa_01_01.html).
5) In your introduction you focused “since 2011.” You might want to broaden your historical focus since resource depletion has an ongoing debate for much longer than that. Amory Lovins’ early works and The Club of Rome’s “The Limits of Growth” were all published in the 1970s, and Thomas Malthus’ “Essay on the Principle of Population” (which focused on the then perceived limits of agricultural production) was published in 1798.
I’d like to see you position more clearly articulated, or at least more clearly focused and/or narrowed. I get that your position is pro-renewable subsidies, but which kind and how? There are so many possibilities. More importantly, your position would be stronger if (in the future) you clearly outlined the alternatives. Why might market outcomes not be good ones? What are some of the problems associated with big subsidies (see, for example, the Economist article in the Blog List item “Renewables are Sowing the Seeds of their Own Destruction”)
ReplyDeleteYour narrative about running out of non-renewable resources ignores prices. Surely as quantities become scarce, prices will increase and demand will decrease. Does it really make sense to ask how fast we’ll run out at current rates (or current growth rates), especially given that prices NOW are super-low? Note that the narrative I hear from the fossil industry and commentators is one of peak DEMAND, not (as has been the case in the past) peak SUPPLY. In lots of cases the “uncoupling” of energy demand from economic growth has been quite extraordinary. The “utility death spiral” --- the poor business forecasts for electrical utilities --- is just as much a statement about falling electricity demand as it is competition from renewables.
Please proof read. Example: “For a long time, corporate exposed an interested in sustainability for public relations than profit.”
Grading Rubric (badly formatted because comments don’t allow formatting)
Possible “grades:” Excellent (E), Very Good (VG), Good (G), Could be Better(CBB)
Takes a clear position: VG
Substantiates the position: CBB
Informs the casual reader: G
Clarity/quality of exposition: CBB