THE EDITOR’S PERSPECTIVE
costs growing like
those of education
by Bob Tippee, Editor
What applies to university education applies
just as well to frantic energy regulation.
“Families and taxpayers can’t just keep paying more and more and more into an undisciplined system where costs just keep on going
up and up and up,” said US President Barack
Obama in a July 24 speech in Galesburg, Ill.
He was talking about the costs of attending
college. And he was right. A college education
is diminishingly affordable. The system increasingly relies on unevenly distributed grants and
scholarships that are unlikely to keep pace with
costs growing at rates the president estimated
Indeed, families and taxpayers can’t support
such a system indefinitely.
Obama’s speech was about his intentions
for the “cornerstones” of the middle class,
which he listed as: “Job security, with good
wages and durable industries. A good educa-
tion. A home to call your own. Affordable health
care when you get sick. A secure retirement
even if you’re not rich. Reducing poverty. Re-
ducing inequality. Growing opportunity.”
That all sounds appealing. But as Obama
outlined parameters for what he’d do FOR the
middle class, he also hinted at what he’d con-
tinue to do TO the middle class on energy.
Among other goals of his administration,
the president said in Galesburg, “We need to
combat climate change.”
The policy elements of that program are
clear: destroying the economics of coal use
through regulation, raising the costs of oil and
natural gas to reduce consumption of them—
especially of oil—and escorting noncommercial
energy into the market with subsidies and
This is not a program friendly to the middle
class. It’s a program certain to raise the costs
of energy and to require increased taxation.
And, with one energy mistake after another
made to combat change in a climate destined
to change no matter what the government
does, it’s a program out of control.
The costs will prove unsustainable. Like
education, energy regulation is fast becoming an undisciplined system that families and
taxpayers can’t afford.
From the Subscribers Only area of
Energy consumption to escalate
by Sam Fletcher, Senior Writer
World energy consumption will jump 56% in the next 30 years, driven by growing
demand in developing countries, the US Energy Information Administration recently
reported in its International Energy Outlook 2013.
Rising prosperity in China and India will be a major driver. “These two countries
combined account for half the world’s total increase in energy use through 2040,” said
EIA Administrator Adam Sieminski. “This will have a profound effect on the development of world energy markets.” World energy consumption is expected to jump to 820
quadrillion btu (quads) in 2040 from 524 quads in 2010.
The EIA projects increased consumption of all fuel sources through 2040. Fossil
fuels are expected to continue supplying much of the energy used worldwide. Renewable energy and nuclear power are the world’s fastest-growing energy sources, each
increasing 2.5%/year, EIA said.
Fossil fuels to lead
Fossil fuels have a major head start in global energy markets and are projected still
to supply almost 80% of world energy through 2040. Petroleum and other liquids
remain the largest supply source of energy, but liquid fuels’ market share is projected
to decline to 28% by 2040 from 34% in 2010.
Natural gas is the fastest growing fossil fuel, with global consumption projected
to increase 1.7%/year, creating an international market for gas similar to the world
oil market. Discovery and development of tight gas, shale gas, and coalbed methane
support a bigger market share for gas.
Coal consumption is projected to grow faster than liquid fuels consumption past 2030
because of China’s growing demand for coal and “tepid growth” in liquid fuels demand,
which EIA attributes to sustained high oil prices and slow economic growth among member countries of the Organization for Economic Cooperation and Development (OECD).
The spot market price of North Sea Brent crude averaged $112/bbl in 2012 and is
projected by EIA to average $105/bbl this year and decrease to $100/bbl in 2014. The
price of Brent is expected to increase in the long term, however, with the world price
at $106/bbl in 2020 and $163/bbl in 2040, as measured in 2011 dollars.
Despite current policies and regulations limiting use of fossil fuel, energy-related
carbon dioxide emissions around the world are projected to rise to 36 billion tonnes
in 2020 from 31 billion tonnes in 2010, hitting 45 billion tonnes in 2040, a 46% jump
over 30 years, EIA said.
Wind, water, and atoms
Wind and hydropower will account for almost 80% of EIA’s projected increase in renewable electricity generation by 2040. The contribution of wind energy, in particular,
has grown rapidly over the past decade and is projected to continue into the future. Of
the 5. 4 trillion kw-hr of renewable generation to be added in 30 years, EIA expects hydroelectric power will contribute 52% with wind making up the other 28%, indicating
a rapid increase in wind power. Most of the growth in hydroelectric generation (82%)
will be in countries outside the OECD, while more than half of the increase in wind
generation (52%) will be among OECD members.
EIA figures electricity generated by nuclear power plants will increase to 5. 5 trillion kw-hrs in 2040 from 2. 6 trillion kw-hr. EIA officials assume concern over energy security and
greenhouse gas emissions will support development of new nuclear generating capacity.
But shortly after the Fukushima Daiichi nuclear disaster in Japan in 2011, the
German government vowed to shut down within 10 years its nuclear capability which
then produced almost 20% of Germany’s energy. That has led German utilities to burn
more coal, increasing carbon dioxide emissions for 2 consecutive years. In late July,
directors of Siemens AG, Europe’s largest engineering company, said they would fire
Chief Executive Officer Peter Loscher because his expansion into green energy and
expensive acquisitions have cut profits.
In the US where nuclear power has been laggard at best, four reactors have closed
this year—a record for the industry. The US also is behind Europe in development of
wind power from offshore facilities because of public concerns about turbines located
close to the coast. Some say offshore turbines would spoil coastal vistas as much as
offshore rigs and production platforms.