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Reasons for optimism – energy

Summary:
Until quite recently there was a fairly common view that energy would become scarce and more expensive in future. The talk was of “peak oil,” in the belief that not many reserve supplies were there in the ground to be exploited. This would allegedly have made it too expensive for oil companies to research and develop new sources of supply. The mistake was to think of the price of oil in terms of the supply of it, rather than looking at the demand. Even before the pandemic the development of energy alternatives was bearing on the price of oil. The development of hydraulic fracturing (fracking) led to large quantities of natural gas being commercially exploitable. This, together with US fracked oil, put limits on international oil price rises and led to the US becoming self-sufficient in

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Until quite recently there was a fairly common view that energy would become scarce and more expensive in future. The talk was of “peak oil,” in the belief that not many reserve supplies were there in the ground to be exploited. This would allegedly have made it too expensive for oil companies to research and develop new sources of supply. The mistake was to think of the price of oil in terms of the supply of it, rather than looking at the demand.

Even before the pandemic the development of energy alternatives was bearing on the price of oil. The development of hydraulic fracturing (fracking) led to large quantities of natural gas being commercially exploitable. This, together with US fracked oil, put limits on international oil price rises and led to the US becoming self-sufficient in energy and a net exporter of it once the law was changed to allow this.

The quite rapid drop in the price of non-fossil-fuel energy sources such as photovoltaic solar and wind energy has made them viable competitors in an increasing number of instances. This has combined with governmental decisions to phase out pollution- and carbon-emitting fuels in favour of electric power derived from renewables as far as possible. Natural gas is the temporary bridge during the switchover. Although a fossil fuel, it is far less polluting than coal, and less so than oil. This enables the UK government to commit to targets for reduced emissions more ambitious than would otherwise have been possible.

Energy will be cleaner and more abundant in future, and it will be cheaper. Newer and more efficient photovoltaic panels produce more energy for a given area than their predecessors did, and they are falling in price at a steep rate. The world has almost certainly already passed “peak oil,” but not because we reached the limit of future supplies of it. The limit was reached in the form of declining demand. It was headed that way before the pandemic caused dramatic reductions in travel and the demand for fuel. 

There will be abundant energy in future, but very little of it will be derived from coal or oil. In several months now in the UK, the percentage of electric power produced from coal is zero. Three principal sources, solar, wind and nuclear will produce the vast bulk of UK energy needs. The outlook is indeed optimistic. It is that there will be enough clean, cheap energy to meet our needs.

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