Significant price differences between regional natural gas markets have driven many European countries to increase coal consumption while decreasing use of natural gas (Source: BP).

Coal, natural gas, and oil accounted for 87 percent of global primary energy consumption in 2012 as the growth of worldwide energy use continued to slow due to the economic downturn. The relative weight of these energy sources keeps shifting, although the change was ever so slight. Natural gas increased its share of global primary energy consumption from 23.8 to 23.9 percent during 2012, coal rose from 29.7 to 29.9 percent, and oil fell from 33.4 to 33.1 percent. The International Energy Agency predicts that by 2017 coal will replace oil as the dominant primary energy source worldwide.

The shale revolution in the United States is reshaping global oil and gas markets. The United States produced oil at record levels in 2012 and is expected to overtake Russia as the world’s largest producer of oil and natural gas combined in 2013. Consequently, the country is importing decreasing amounts of these two fossil fuels, while using rising levels of its natural gas for power generation. This has led to price discrepancies between the American and European natural gas markets that in turn have prompted Europeans to increase their use of coal for power generation. Coal consumption, however, was dominated by China, which in 2012 for the first time accounted for more than half of the world’s coal use.

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China, coal, Europe, India, natural gas, oil, Russia, shale gas, United States

More than a year-and-a-half after the tsunami and resulting nuclear disaster at Fukushima, Japanese policymakers are trying to figure out what to do about Japan’s power-generation future. In September, the government released a document titled “Revolutionary Energy and Environment Strategy,” which proposes to eliminate all nuclear generation in Japan by 2040. While the general public continues to support a transition away from nuclear power in Japan, business leaders have argued that such a change would increase energy costs, thereby making Japanese companies less competitive in an already increasingly competitive East Asian market.

Japan pays incredibly high rates to import LNG, which has become only worse since Fukushima and is driving up energy prices.

Close to one-third of Japan’s power generation came from nuclear prior to Fukushima, and before the tsunami, there had even been discussion of increasing the share of nuclear to 50 percent with hope that this would help the country reduce its greenhouse gas emissions. Now that much of the population wants to phase-out nuclear by 2040, Japan faces an interesting question of what to do with its power sector in the future.

One solution, and what Japan has largely done in the short-term, is to rely more heavily on fossil fuels. After Fukushima, Japan began importing more natural gas and oil to make up for its loss of nuclear generation, and the share of fossil fuel generation in its electricity mix rose to 73 percent (a level not seen in decades) by early 2012. The problems with this increase, however, are numerous.

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electricity, energy policy, feed-in tariff, japan, natural gas, nuclear, oil, renewable energy, sustainability

The Jamaican economy is highly energy inefficient. In 2008, the country’s energy intensity index ranked 47th in the world, at 8,937 btu per year 2005 U.S. dollar. The energy intensity index shows the energy efficiency of a nation’s economy; the higher it is, the more it costs to convert energy into GDP (Gross Domestic Product). Reasons for this high energy intensity include the energy demands of the bauxite and alumina industry, the inefficient public electricity system with its high transmission and distribution losses, inefficient energy use in the public sector, and low public awareness of the importance of energy conservation.

Worldwatch meets with Jamaica government officials to discuss energy issues. From left: Senior Director of Energy at the Ministry of Energy & Mining Fitzroy Vidal, State Minister Laurence Broderick, Worldwatch Caribbean Project Manager Mark Konold, and Sr. Engineer at Ministry of Energy & Mining, Gerald Lindo

Jamaica depends heavily on imported petroleum, which supplies 91 percent of domestic energy use. Transportation accounts for nearly half (47 percent) of the energy consumed, followed by the bauxite and alumina industry (30 percent), and electricity generation (23 percent). Despite the increase in world oil prices, Jamaica’s energy consumption has grown faster than its economy over the past decade. Given these realities, the Jamaican National Energy Policy for 2009-2030 aims to design and implement cost-saving measures to boost energy efficiency and conservation across the public sector.

In 2011, the Jamaican government set a target of reducing public sector energy consumption 5 percent below the 2010 level by 2015, mainly through public sector efficiency improvements. These include energy audits and building retrofits to replace lighting and air conditioning units, and improving building envelopes by implementing cool roof coatings and window films. Because reducing energy consumption also requires efforts of those who use public buildings, staff are expected to fully engage in the process by following the protocols in place. Education and knowledge dissemination about energy efficiency and conservation are a key component of this project.

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energy efficiency, energy intensity, Inter-American Development Bank, Jamaica, oil

On July 28, the U.S. Environmental Protection Agency (EPA) proposed a package of regulations designed to reduce air pollution from the oil and natural gas industry. One of these regulations, a new source performance standard for volatile organic compounds (VOCs), will require drillers to use a technique called “green completions” on any oil or gas well that they hydraulically fracture. The EPA estimates that this new regulation, which is the United States’ first federal air standard addressing hydraulically fractured wells, will reduce such wells’ emissions of volatile organic compounds (VOCs) by 95 percent.

Green completions also have the co-benefit of capturing methane that would otherwise be vented or flared. Methane is the main constituent of natural gas and a greenhouse gas 25 times more potent than carbon dioxide. Recent estimates of methane emitted during the production, processing, and transport of natural gas have caused some to question the greenhouse gas benefits that could be achieved by switching from coal to gas-fired electricity.

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emissions reductions, EPA, Methane, natural gas, oil, United States

 

By Anders Østervang, First Secretary, Economic Affairs, Danish Embassy

As the world’s population grows and emerging economies expand rapidly, global demand and competition for energy are set to intensify in the decades to come. This will likely drive up prices of the world’s finite oil and other fossil fuel resources, which are concentrated largely in a handful of politically unstable countries. The International Energy Agency projects that global energy demand will increase 34 percent by 2035.

In Denmark, we have decided that we do not want to be in that energy race. We want to insulate ourselves from future peaks in energy prices and disruptions in supply, and to invest our money in green, long-term, sustainable sources of energy. Our government has announced its ambition that Denmark should become fully independent of fossil fuels by 2050, and instead meet its energy needs with renewable energy. A detailed, comprehensive strategy for how to get there, “Energy Strategy 2050”, was launched a few months ago—the first of its kind in the world.

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denmark, embassy series, energy efficiency, green economy, oil, oil dependence, renewable energy

LNG tankers could become a more common sight in the Caribbean.

By Saya Kitasei and Cristina Adkins

As oil prices continue to rise, consumers all over the world are feeling the squeeze. Although Americans may be hurting at the pump and reviving debates about energy security, the U.S. economy’s vulnerability to oil price volatility is small relative to the island nations of the Caribbean, which use oil to generate most of their electricity in addition to fueling their vehicles. In response to recent oil price shocks, some islands are discussing a shift from oil to natural gas to generate electricity (and even to fill up their cars). Since the end of 2008, natural gas prices have stayed very low while oil prices rose steeply, leading many policy-makers in the Caribbean to argue that natural gas is a good bet for their islands’ economic and energy security.

As ReVolt has reported, Worldwatch is currently working with three Caribbean countries, the Dominican Republic, Jamaica, and Haiti, to study the potential for development pathways based around domestic renewable energy and energy efficiency resources.  Should it remain significantly cheaper than oil, natural gas could provide an important additional piece to reducing these islands’ expenditures on energy imports, even though gas, too, would have to be imported, most likely in the form of liquefied natural gas (LNG).

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Caribbean, Dominican Republic, electricity, energy efficiency, Jamaica, LNG, natural gas, oil, renewable energy, Trinidad and Tobago

The Worldwatch Institute has begun implementing a Low Carbon Energy Roadmaps project to help Caribbean Small Island Developing States (SIDS) transition to a low-carbon economy. Undertaking such a transition is an immediate imperative for these states. If they can capitalize on their indigenous, renewable resources they can reduce their oil imports, reduce exposure to volatile prices, and invest any saved money in other areas of their economy. Still, it’s always nice to have someone (or something) else burnish our argument.

In 2005, Venezuelan president Hugo Chavez initiated the Petrocaribe Energy Cooperation Agreement, an arrangement that allowed 12 Caribbean nations, including the Dominican Republic, to purchase oil at a subsidized cost. Nevertheless fuel prices in the D.R. have jumped 50 percent in the last two years.  Gasoline and diesel currently cost around $4.60 and $4.16 per gallon, respectively. Dominican taxi and bus drivers have recently begun taking out their frustration over higher fuel costs on Venezuela, protesting outside the Venezuelan Embassy and demanding more information on the details of the Petrocaribe program. In response, Alfredo Murga, Venezuela’s ambassador to the D.R., pointed out that Dominican authorities set their own fuel prices based on international crude oil markets. In other words, even Petrocaribe does not protect Dominicans from the vagaries of oil prices.  These developments only reinforce Worldwatch’s position: such complete dependence on oil for electricity in addition to vehicle fuel is untenable for the Dominican Republic.

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Caribbean, Dominican Republic, electricity, imports, Low-Carbon Energy Roadmap, oil, oil dependence, Petrocaribe, SIDS, Venezuela

At an October 7 Congressional Staff Briefing, panelists discussed a popular question among energy analysts: can oil production meet rising global demand? Participants stressed that the price of oil will necessarily increase as the supply decreases, and that oil security has become an increasing problem for many countries, including the United States. But for many within the energy community, the real question is not about the future of oil, but about how renewable energy can play into our shared energy future.

Robert Hirsch, Senior Advisor at Management Information Services Inc., noted that “world oil production hit a plateau in mid-2004 and stayed in a narrow fluctuation range in spite of the ‘Great Recession.” As of 2010, that plateau will become a decline of 4 percent annually over the next 2–5 years, leading to ‘worldwide crash mitigation,’ or the implementation of large projects at the maximum possible rate to mitigate the peaking oil. However, sufficient research and development will take time, limiting the degree to which this will resolve the coming oil shortage.

U.S. Military use of Solar Panels

Simultaneously, the U.S. Energy Information Administration projects that world liquid fuel demand will surpass 100 million barrels of oil equivalent per day by 2035, up from 84 million barrels a day in 2009. So oil production will go down, oil demand will go up, and there’s not much we can do about it. Or is there?  Instead of focusing on oil depletion, why not work to change U.S. and world oil consumption patterns?

Consider the U.S. military’s transition away from oil. The military, which must be highly mobile on the ground and in the sea and air, is highly reliant on oil. In 2005, the Department of Defense (DOD) consumed approximately 125 million barrels of oil, 74 percent of which was used to power transport vehicles. A military Humvee, for example, has a fuel capacity of 25 gallons and runs at 12 miles per gallon, giving it a range of 300 miles. Just one tank of fuel costs US$939. With 50,000+ humvees in use today, the total cost for fueling these vehicles can be upward of US$46 million annually. In addition, operations in the field, and often entire military camps, are powered by diesel generators that require a continuous and secure supply of fuel.

As oil prices and security risks increase, the U.S. military has become more interested in exploring alternatives. Just recently, 20 U.S. and NATO oil tankers were set afire in Islamabad, the capital of Pakistan, while attempting to cross the Khyber Pass into Afghanistan. The DOD’s total fuel expenditure in 2007 was $13.2 billion, a 41 percent increase from 2005. All of this highlights the need to diversify the energy supply and adopt alternative means, not only for monetary reasons, but also to not waste—and endanger—soldiers during oil transport and protection. Alternative energy would allow the United States to use resources that do not require transport and to use surrounding assets freely without any possible danger. Ray Mabus, the Navy Secretary and former ambassador to Saudi Arabia, stated that he hopes to generate half of all power needed for the U.S. Navy and Marines from renewable energy sources by 2020.

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alternative energy, fossil fuels, Innovation, oil, renewable energy, security, U.S. military

Today is a big day for energy policy and coastal areas in the United States.

What’s really big is the oil slick spreading in the Gulf of Mexico after last week’s BP oil rig explosion.   The Coast Guard has failed to shut an underwater valve from which more than 5,000 barrels of oil have now spewed, allowing the slick to travel within 20 miles of the Louisiana shore and creep closer still (see diagram on the left).

Maps courtesy of NOAA & The Boston Globe

At the same time, the U.S. Department of the Interior approved an offshore wind farm near Cape Cod, Massachusetts today, ending a decade-long stall on the project and making a sizeable splash in the news.  An Interior Department  press release describes the size and significance of the project:

The Cape Wind project would be the first wind farm on the U.S. Outer Continental Shelf, generating enough power to meet 75 percent of the electricity demand for Cape Cod, Martha’s Vineyard and Nantucket Island combined. The project would create several hundred construction jobs and be one of the largest greenhouse gas reduction initiatives in the nation, cutting carbon dioxide emissions from conventional power plants by 700,000 tons annually. That is equivalent to removing 175,000 cars from the road for a year.

The bulk of resistance to Cape Wind has come from residents and even some tribal groups, claiming that the project degrades the historical and cultural value of the area.

Meanwhile offshore drilling plans continue at the federal level, fastening our dependence on fossil fuels and ruining landscapes and wildlife areas elsewhere in the United States. Today the Coast Guard began lighting fire to isolated sections of the Gulf oil spill, and the spilling and burning may continue for days or weeks.  The Coast Guard Rear Admiral Mary Landry admitted in a press conference that they are “possibly 90 days out from securing the source permanently.”

As the Gulf burns, the urgency of transitioning away from non-renewable and polluting energy sources seems clearer than ever. We have the needed renewable energy and energy efficiency technologies ready. Those are the real tools that will preserve the history and cultures we enjoy on this planet.

Cape Wind, fossil fuels, offshore wind, oil