Wind and solar power are growing rapidly and are forecast to supply about 1% of global energy demand by 2030, but fossil fuels will continue to dominate until then and beyond, executives with ExxonMobil International Ltd. and Royal Dutch Shell plc said last week.
Robert C. Olsen, who is production director of ExxonMobil International, said the energy major is projecting that wind and solar energy will grow on average about 10.5% a year through 2030, compared with 1.6% average annual growth for natural gas, oil and coal combined. Olsen shared Exxon's projections at the Offshore Europe energy conference in Aberdeen, Scotland.
"It will be the conventional energy sources -- oil, natural gas and coal -- that will need to meet the bulk of the world's energy requirements over the coming decades," Olsen said. Globally, he noted that there is an abundance of fossil fuels: 3 trillion bbl of conventional, recoverable oil across the globe; 1 trillion bbl since the energy industry ramped up more than 100 years ago.
Assuaging some shareholder and environmental activist concerns, Olsen said ExxonMobil plans to invest more to reduce its carbon footprint.
Olsen reiterated the new mantra at Exxon: global warming has taken place and carbon dioxide (CO2) emissions have impacted global warming. However, Exxon supports a "uniform and predictable cost for carbon" to allow market forces to do their part in cutting emissions. Exxon to date has invested in about 85 cogeneration operations worldwide to reduce CO2 emissions, and it has sequestered 1 million metric tons/year of CO2 since 1998 by burying it in the North Sea Sleipner natural gas field.
"This approach holds great promise in becoming a major contributor to reduced emissions over the coming decades," Olsen said.
Shell Chairman Jorman Ollila agreed with Exxon's assessment about the future of fossil fuels.
"Fossil fuels will remain the dominant source of energy for decades to come," he told the Aberdeen attendees. "So in our battle against greenhouse gas emissions, reducing CO2 in the fossil fuels chain, especially with regard to coal, will be crucial."
Ollila, who took over the top spot at Shell in June 2006, said, "Accelerating energy demand growth, lagging supplies of 'easy oil' and rising CO2 emissions all need to be addressed in an integrated way." He offered several ways to address these challenges, including improving energy efficiency, sequestering CO2 and boosting the growth of renewable energy.
Speaking of the "hard truths," Ollila said the first challenge is that global energy demand is "not just growing, but that demand growth is accelerating," with "six to more than nine billion people worldwide by 2050, and higher levels of prosperity, with China and India in particular entering the energy-intensive phase of their development. Energy use in 2050 may be twice as high as it is today, or higher still."
Another challenge is "that the growth rate of supplies of 'easy oil' will struggle to keep up with accelerating demand. Just when energy demand is surging, many oil provinces are going into decline." And the "third hard truth is that continued fossil fuel dominance in combination with a disproportionately high use of coal will cause higher CO2 emissions, possibly to levels scientists consider irresponsible."
Ollila said he was painting "a pretty grim picture. And it would be easy to be discouraged." However, Shell will focus on "solution pathways" that both enhance energy security and help management emissions.
"Billions of energy consumers make tens of billions of small decisions each day to either use or save energy," said Ollila, who is also CEO of Shell. "In many cases, as research by Shell and others shows, people opt for what is most convenient. But there is another side to human nature. I have seen it at work many times. This is the desire to overcome obstacles and improve our performance. And we must improve our performance...for our own sake and that of future generations."
Ollila said "governments may have to stimulate behavioral change through education, incentives, taxes and regulations." Industry, he said, will "offer solutions that help people to save energy in a convenient way."
One "candidate" for better energy performance is in the electricity generation and distribution sector, he said.
'"While thermodynamics imposes limits, the world would benefit from a higher churning rate of coal-fired power plants," said Ollila. "New plants tend to have higher combustion temperatures to burn coal more efficiently...efficiency typically goes up to more than 40%. Moreover, if you equip new power plants with gasification technology, you can further improve their efficiency."
However, building new plants and introducing new technologies "comes at a price," he said. "So societies will have to strike a balance between higher capital and operating costs on the one hand and on the other hand greater energy security and fewer emissions, and therefore lower environmental and health costs."
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