The human predicament

Despite Climate Fears, World Economy Runs on Fossil Fuels

Statoil Chief Executive Officer Helge Lund said those advocating for a future without fossils fuels are pining for a future economic era that may never come.

Oil Price,

26 November, 2013

"We have to live with fossil fuels as the dominant part of the energy mix for decades," he said during the launch of Statoil's annual conference.

His comments came as international negotiators wrapped up two weeks of climate talks in Warsaw, Poland. Delegates there managed to reach a last-minute agreement to work toward individual targets for carbon dioxide emission reductions by 2015 but fell short of outlining specific plans for how and when plans would be assessed.

Two weeks ago, the World Meteorological Organization said the level of greenhouse gases in the atmosphere reached a record in 2012, one of the warmest years on record. CO2 from the burning of fossil fuels was the dominate form of emissions and that, the WMO said, was driving the warming effect on the climate.

"If we continue with ‘business as usual,’ global average temperatures may be 4.6 degrees (Centigrade) higher by the end of the century," WMO Secretary-General Michel Jarraud said.

According to the International Energy Agency's World Energy Outlook, however, it may be business as usual for the foreseeable future. While renewables like wind, solar and hydropower are gaining ground, the global economy still relies on fossil fuels as its dominant source of energy.

Statoil's Lund said fossil fuels account for 82 percent of the world's energy mix, the same level that existed in the late 1980s. Even if renewable energy gains ground, they only reduce the amount of fossil fuel in the global mix by 75 percent in 2035, he said.

Cleaner fuels like natural gas may be part of the solution for companies like Statoil. For the Sierra Club, however, it's that mindset that exacerbates the problem. Replacing one fossil fuel with another isn't the solution, the group says. Last week, the Sierra Club organized protests in California, saying gas-fired plants cause air pollution that's already sickened people in the state.

Lund, however, said a carbon-free future is unreasonable. Natural gas has its problems but it may be the cleanest form of fossil fuel available. Energy companies still need to drill, therefore, because the world needs 10 times the gas production capacity available from the Norwegian continental shelf to meet the demands of a low-carbon future, he said. For oil, the world needs perhaps four new Saudi Arabias just to replace the loss of oil production from maturing fields.

Statoil's boss said those in the energy industry do carry a responsibility to reduce their carbon footprint. Wind, solar and hydropower may provide alternatives, he said, but there is no single solution to the crisis.

"Those who argue that we should stop exploring, harvest existing fields and block new opportunities are, at best, preparing for a future that doesn't exist," he said.

By. Daniel J. Graeber of Oilprice.com