How long is a long time?

Current government policy on energy technology is based on a curious mismatch of ideas about time

Ideas of 'a long time' vary according to context in the Low Carbon Kid's analysis of the government's Energy Market Outlook published two days ago.

There is enough uranium ore in the world to meet currently projected demand for up to 85 years, according to current estimates from the Euratom Supply Agency.

Renewable energy will, by contrast and by definition, last forever. Oh yes, and it's free.

Technologies which use renewable energies as a fuel source will therefore have application forever.

In other words, investing now in developing new renewable energy technologies would produce expertise that would provide a strong foundation for industries that could last for centuries, rather than, by contrast with nuclear technology, one century.

Technologies' lifetimes

Technologies have their lifetimes.

Steam power has lasted roughly 250 years. The internal combustion engine may last (it first appeared in 1850) 200 years.

Nuclear power looks set to last for 150 years at the most.

Water power (mechanical) has been around for at least 2000 years and will probably never go away.

Electricity as a clean means of conducting energy may also be around now as long as we are.

Renewable technologies generating electricity and heat will obviously improve and change with innovation, but they will be around also as long as we are, it's safe to assume.

What the government says

In the long-run we believe increased prices and global demand will help maintain reliable uranium supplies, thus not representing a constraint on any new nuclear build in the UK.
This is not a long run in my books. It is a medium term run as it is looking not 85 years but 15 years into the future.

The report begins by saying
In the short term, the main concern is the extent to which
we can be confident that energy can be delivered when and
where it is needed, i.e. reliability.
In the medium term, the focus is on the availability of
infrastructure, the planning process and supply chain issues
such as the availability, both within the UK and
internationally, of raw materials, machine components and
project management and engineering skills.
In the longer term, there is a wider range of options open to market participants, including significant capital investment and the development of new technology. Given this, the key concern in this time-frame is likely to be the availability of primary sources of energy.
In this discussion, short term is therefore about up to 12 years (2020); medium term seems to be the same actually, as over the same period the same concerns apply, but might extend a further 10 years as the Grid infrastructure is updated; and long term is any time beyond this.

Governments usually can't see beyond the electoral term of office. They are therefore bound by the need to balance the books - they can't spend too much public money.

Nuclear power stations in general take twice as long to build as coal power stations - ten as opposed to five years.

It's therefore curious that nuclear stations are being backed by ministers as they neither address the short term issues or the very long term issues.

New build nuclear power stations will be up and running around 2020. They would last until around 2095, then the fuel runs out. And anyway they will be worn out.

Before then, there is plenty of time to implement 15% of our generating needs from renewables that are currently proven - wind power, ground source heat pumps, solar thermal, and solar electric.

In the medium term government policy should signal to the markets that they should invest In the newer technologies - marine current turbines, wave power, tidal power and more advanced solar photovoltaic generation.

In particular the more predicatable sources - marine currents, tides, geothermal, heat pumps - should be prioritised.

So that after 2020 these are increasingly phased in.

in the medium
term the electricity generating industry faces a substantial
challenge in ensuring delivery of the new generating
capacity that will be needed if demand continues to rise. [p 37]

All the more reason for speeding up the planning process.

[And we haven't even mentioned the very very very very long time that nuclear waste poses a threat for]. If Stonehenge had nen a nuclear reactor it would be well glowing still.
> Energy Market Outlook

Peak oil begins here

The screw is tightening.

As the main oil supply countries' own consumption of oil is rising, so they are exporting less. Oil prices are starting to rise. New sources are hard to get at.

Read on....

Six of the largest oil suppliers to the US are poised to cut their global exports by nearly 2 million barrels a day by 2012, ramping up pressure on supply and price, and intensifying the focus on one of the last great deposits open to private investment: Canada's oil sands.

The projected cut, amounting to 7% by Mexico, Saudi Arabia, Venezuela, Nigeria, Algeria and Russia, reflects the growing struggle in these countries to grow production and manage their own soaring rates of oil consumption, says Jeff Rubin, chief market strategist and chief economist, at CIBC World Markets, who will discuss his latest findings at the firm's Industrials Conference in New York City.

The trend of oil producing countries becoming major oil consumers extends beyond the top US suppliers, says Mr. Rubin.

When similar conditions are factored in among the other major oil producers including OPEC, the supply crunch deepens to 3 million barrels a day, or an 8% cut in global exports.

"Soaring domestic demand is cannibalizing export capacity, and will increasingly do so as productions plateaus or declines in many of these countries."

Last year, OPEC members, along with independent producers Russia and Mexico, consumed over 12 million barrels of oil a day, roughly 60% more than China and slightly more than all of Western Europe says Mr. Rubin.

As a group, they now are second only to the U.S. in terms of market size.

Much of the demand in these countries is driven by heavily subsidized prices that keep a barrel of oil down to a cost of between US$10 and US$20.

"The cheap supply is fuelling some of the fastest growth in domestic demand anywhere in the world," says Mr. Rubin.

Russia, now the world's largest oil producer, has filled the oil supply gap in recent years. However, internal demand there is growing at about twice the pace of production, and is claiming all of the country's production gains.

Mexico faces even great obstacles in maintaining its export levels.

Production in the giant Cantarell field, home to half of the country's 3.5 million barrels per day of crude production, is already in the throes of rapid depletion. With production diminishing and internal demand growing, the country's export capacity looks to be lethally challenged.

Mexico's crude exports have already been falling since 2004 and could well become insignificant by 2012 - a loss of some 1.5 million barrels per day to world markets.

Mr. Rubin says diminished global supplies and resulting higher prices will lead the markets to rely more on higher cost unconventional deposits, like the Canadian oil sands which he believes will surpass deep water wells as the single largest source of new oil exports by decade end.

"Canada's oil sands will become increasingly coveted as they represent one of the last great reserves of supply open to private investment," says Mr. Rubin.

He estimates they represent anywhere from 50-70% of the world's oil reserves open to private investment, depending on one's view of the investment climate in Nigeria and Kazakhstan.

"For multinational oil firms, the world is rapidly shrinking," say Mr. Rubin.

"Increasingly they are shut out of the backyards of all the state-owned oil patches and then have to bid against those state firms in places still open for investment.

"Canada remains one of those few places where governments have been content to take their share of economic rents through royalties and not be concerned about the ownership per se."

Mr. Rubin's remarks were made at today's CIBC World Markets Industrial Conference where more than 50 big oil addicts - firms spanning the aerospace, defense, industrial services, chemicals, building products, steel, industrial multi-industry and industrial diversified sectors - are gathered to try and borrow more dosh from institutional investors.