Despite high prices, crude oil production has stayed basically flat for roughly five years. It seems this is the all-time high-water mark, according to Fatih Birol, chief economist for the International Energy Agency. “We think that crude oil production for the world has already peaked in 2006,” he told the Australian Broadcasting Corporation. “I think it would have been better if the governments have started to work on it at least 10 years ago.”
At a European Parliament conference on peak oil, the European Commission’s director-general for transport and mobility policy warned if actions are delayed to reduce oil dependency, “we may be forced to drastically reduce all our mobility.”
Already, rising energy costs are taking their toll around the world, with U.S. economic growth stumbling and raising the spectre of stagflation, as well as, helping to drive up food prices in Latin America, and driving inflation in Europe.
Squeezing Renewables Through Bottlenecks
Renewable energy could, in theory, take over quickly from fossil fuels, according to a draft of a new report on renewable energy by the Intergovernmental Panel on Climate Change. The study says renewables could grow 20-fold in the next four decades—more than enough to meet projected demand. But in reality, the report argues, less than 2.5 percent of that potential will be put into place.
One of the bottlenecks in renewable energy production is the electric grid, argued another recent report, this one by the World Resources Institute. Idaho’s power grid, for example, could soon be overloaded by electricity from wind turbines, so the state’s Public Utilities Commission has suspended permits for all but fairly small turbines, cutting the largest allowable turbine 100-fold, from 10 megawatts down to 100 kilowatts.
Wind energy isn’t going away anytime soon, either, according to a study that estimated the effect of continued global warming on wind patterns over America’s lower 48 states and a portion of northern Mexico. By mid-century, most areas will see barely any change in their windiness, and those that will see a drop weren’t great sites for wind power in the first place, the researchers say.
Feed-ins Choked Off
The sluggish economic recovery is also hurting renewables, with the UK’s feed-in tariff—the subsidy for electricity that renewable energy systems produce and sell back to the grid—falling under the blade of budget cuts. The tariff has led to a surge in home solar installations. Now for larger projects, the government is planning to cut the tariff drastically—although projects installed before the August deadline will be grandfathered in.
To get in under the wire and secure the feed-in tariff, a community group rushed to secure funding to put up a bank of more than 500 solar panels on a brewery’s roof, which will keep the beer cool—and the excess electricity will be sold back to the grid. Although community power companies have been created before, such as a pioneering one in Germany, the effort claims to be the first in the UK. Despite their estimate that it will take investors 20 years to make a return, they have attracted widespread interest.
On the other end of the funding spectrum, money for the $24 billion International Thermonuclear Experimental Reactor in France was under question in the European Parliament. The project aims to develop a new source of energy through fusion of hydrogen atoms—the same process that powers the sun—but it has run far over the original budget.
Also on the chopping block are about $6 billion in annual U.S. subsidies for corn ethanol production. After proposals to cut these subsidies flat-out, a bipartisan group of farm-state senators made a counter-proposal of a gradual phase-out.
The U.S. Energy Information Administration, a key source of data on the country’s energy production and supplies, is also being forced to cut back, canceling many of its data collection efforts, including its annual compilation of national oil and gas reserves. The cuts could also hurt energy efficiency efforts, since the Administration is suspending updates to its widely used National Energy Modeling System, and canceling its Commercial Buildings Energy Consumption Survey.
Feds Push Emissions Cuts, Clean Energy
In other areas, the federal government is expanding efforts on clean energy and efficiency, with the firstscorecards on energy and environmental performance, following the adage “you can’t manage what you don’t measure.” President Obama earlier set goals for 2020 of cutting federal greenhouse gas emissions from buildings and fuels by 28 percent, and indirect emissions (such as from flights) by 13 percent. The new scorecards suggest some progress toward that goal; compared with its 2008 baseline, they found a 2.5 million metric ton reduction in carbon dioxide.
Energy efficiency in buildings could also get a boost with the U.S. Environmental Protection Agency’s “Battle of the Buildings,” a competition to cut energy use drastically and cost-effectively. This year, 245 buildings are vying for the title, compared with just 14 last year.
U.S. government action on clean energy may expand nonetheless, with a new Senate bill proposing to create a new Clean Energy Deployment Administration to help finance renewable energy projects. Sen. Jeff Bingaman said in a statement on the bill, “We need to find a way to pay for [it].”
The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.