Welcome to our Snippets newsletter which as always endeavours to provide coverage of developments in energy and environmental issues, from both here in New Zealand and around the world. We hope you continue to find our fortnightly collection of articles to be of interest in what is a rapidly evolving area.
This week we open with the World Bank 2016 outlook for the world’s energy commodity markets. As expected, the outlook is bleak for coal, with prices likely to continue to tumble downwards by a further 13%, despite having fallen by 60% since 2011. US shale gas and oil production could sharply decline, due to a fall-off in new investments and the rapid decline in production (typically shale drops by some 70% in the first year). The price of oil is expected to average $37 per barrel, which is a decline of 27% on 2015, but higher than the recent lows of $30 per barrel. Overall, the price of oil is expected to remain subdued due to a glut in production and flat demand.
So what is the international oil industry doing to resolve this? Not a lot, except to keep pumping and shipping to already saturated markets. Worldwide demand for oil is presently running at 94.5 million barrels per day, with production at 96.5 million barrels per day – or 2 million barrels more than required. This has seen the price of West Texas Intermediate crude drop from US$105 per barrel in July 2014 to US$30 in recent months. With Saudi Arabia determined to bring the US shale industry to its knees, the race to the bottom sees no sign of ending soon, with all parties continuing to pump at full capacity.
Whilst the low price of oil might be good for consumers and motorists, it isn’t such good news for oil producing nations heavily dependent on it for export earnings. For example, Russia, the world’s third largest oil producer is already feelings its impact, with its economy contracting further in 2015. Sub-Saharan Africa will certainly be affected. Nigeria, its largest economy, could be knocked to its knees with unemployment expect to skyrocket. Another is Angola, with its economy grinding to a halt and subsidies being slashed, fuelling popular anger and the sense that the petro-boom advantaged only the elite is over, leaving everyone else worse off.
One thing that is certain is that the transition to a clean technology and renewable future is well underway, with at least $16.5 trillion earmarked for investment. A recent S&P report predicts the sector will ‘take-off’ as it responds to the dual incentives of a renewed focus on climate policies and the rapidly falling price of clean technologies.
Much of these investments are likely to be in large scale renewable generation and in smaller ‘micro-grids’. Micro-grids are systems set up to power specific locations – localised areas, not whole communities. Micro-grids are often integrations of PV/wind generation, battery storage and load management systems, all optimised to meet local requirements, without any reliance on being tied to a grid. The Indonesian island of Sumba serves as a good example of micro-grids in practice, bringing electricity to its 650,000 people without the need for an electricity network grid.
All of these developments are reliant on some form of energy storage. The “Western” developed countries grid-connected systems utilise storage, in the form of hydro water in dams or gas, for peaking plants. Grid stability is met by providing spinning reserve, where large generation plants are synchronised with the grid, possibly generating little, if at all, but capable of being ramped up at short-notice. Renewables however generate intermittently and therefore require electricity storage for their optimisation. We examine some of the array of energy storage systems being developed from Lithium-Ion battery storage such as from Tesla, compressed air storage systems, giant flywheels, liquid air (compressing air 700 times into a cold liquid), etc. It is comforting to realise that the storage of large scale electricity is going to be a practical reality.
We now turn our attention to food, and water. How will the world feed 9 billion people? The WWF has, in conjunction with some large food industry partners, launched a new initiative, the “Markets Institute to Advance Sustainable Food Production”. Realising that no one company can solve the world’s food scarcity problem alone, some large businesses have made it their mission to change how food is grown, procured, shipped and distributed so that natural resources will be sustained to grow food for future generations. They will encourage small holder farmer producers to change to more sustainable cropping methods and products, and make up the farmers short term financial shortfall with subsidies, then provide a market for the goods afterwards. The Markets Institute will also work at eliminating waste and illegal operations.
But we cannot farm food without water, and water scarcity is also a huge problem. In fact, about 2/3 of the world live with severe water scarcity for at least one month every year, and 500 million live where the consumption is double the annual rainfall. These are not just “out of the way” places – but places like
the UK USA and Australia. Scarcity of water in largely populated areas will led to more social problems and conflict, and possibly more “refugees”. How can the world solve the water scarcity problem?
We next have three unrelated, but thought provoking articles. The first investigates the connection between air pollution and dementia. With huge pollution problems around, little thought has previously been given to the toxicity of this on the human body. There is now some evidence that the pollution toxins may be able to get to your brain via the nasal nerve, or get into the blood via the lungs and deep tissue. There is some reasonable evidence these toxins can cause dementia, the likelihood of which may be magnified when there are other stressors present on the body (poverty, violence etc). An interesting read.
Next we look at the fashion industry and how “green” their products
are. Some fashion houses look green but really aren’t – but some others are trying to behave sustainably. This article also gives some good definitions of fashion terminology.
Our final article discusses carbon fibre composites, used in everything from aeroplanes to electronics – there is now a way to recycle this strong, light product, with minimal energy input, and zero waste, with faster manufacture than traditional methods. Maybe this is the product of the future?
Thanks for taking the time to read this issue and we look forward to catching up with you again. If you have any items of interest you would like to submit, then please feel free to forward them.