Wednesday, 2 March 2011

Could the current situation in Africa combined with the soaring costs for oil as we approach both peak and decline in oil supplies provoke countries to accelerate the development of their renewable energy sources?

Iceland responded to the oil embargoes of the 1970's by converting to domestic resources. Nowadays virtually every building in the entire country is heated by hot water generated by the geothermal energy (90%) that is located close to the surface in this volcanically active region. Geothermal energy also provides 25% of the energy they consume.

Could other countries be shocked into doing a similar thing? Geopolitics is increasingly becoming more focused on energy supplies and relationships between countries are always unstable and uncertain and so countries always want to reduce their import dependency. However, at present, our cravings for oil often shroud this need for more independency. Could all this unrest in Africa be the wakeup call that countries need?

The unrest that has spread through Egypt caused the oil prices to rise even though (because Egypt consumes practically all they produce) they are not a large oil exporter. The reason for this rise in oil prices is associated with the route that oil from the Middle East and Africa often takes. Oil is often transported through the Suez Canal and pipeline and so the present unrest has stopped some companies from trying to transport oil via this region. It is estimated that 5% of the world’s oil is transported through this canal. In terms of the reliability of the oil supply, the situation in Libya is of greater concern as Libya holds oil reserves. Libya is the 12th largest oil exporter and 85% of its oil goes to Europe (Libya provides 22% of Italy’s crude oil and 8.5% of the UK’s).  Even though Saudi Arabia have said that they can produce enough oil to cover the shortfall, surely this situation is worrying countries like the USA who, like many developed countries, are extremely reliant on oil to enable them to sustain their current lifestyle. Is it possible, if the situation escalates, that the USA could be forced to start to look elsewhere to ensure a reliable energy source - could this even provoke them to further develop their renewable energy sources so that they become more independent? The USA has many options in terms of their utilisation of renewable energy sources. Although not on the scale present in Iceland, America does have both the potential and the technology to exploit geothermal energy and use it to heat and cool houses and to provide hot water. Certain regions also have the ideal conditions to exploit other sources like solar or wind energy.

I think that 'shocking' countries into going renewable is an interesting concept and is perhaps one of the only ways in which developed countries will be prepared to sacrifice their current lifestyles for the sake of developing more reliable and sustainable energy sources. This doesn't only have to be a shock in terms of already unstable regions becoming more unstable and therefore compromising the reliability of the energy source but all rising energy prices. Many feel that the current situation will provoke OPEC to declare a substantial rise in the price of a barrel of oil. At present, whilst it is more finically viable to do so, we invest and exploit the fossil fuels. However, events like those unfolding at present combined with the fact that we are getting closer and closer to peak oil mean that prices are going to soar. The control that oil seems to have on the world is worrying - not only in terms of its hold on the economy but think about the amount of wars that have been fought over it. The few episodes of dramatic increases in oil prices in the past 30 years, mainly due to events in the Middle East, have shown how vulnerable the world economy is to the impact of supply restrictions. High oil price inflation contributes to economic recessions and creates the greatest hardship for those least able to bear the additional costs. Energy sources clearly seem to play an important role in a country's economy and so, in a world that is dictated by money this is key, because as soon as renewable sources become the most financially viable option they are likely to be utilised more and more.

To some extent, the process of almost shocking a nation into changing its energy patterns, is being to occur in Israel. After the conflict during the 1970's, to try and initiate peace, the USA encouraged Israel to become more dependent on Egypt for its energy supply ( just over 50% of Israel natural gas supply comes from Egypt) However, due to the current situation, they are being advised to become more independent and are currently investigated ways in which to achieve this. Israel is starting to accelerate is development of the giant offshore gas reserve located off the Mediterranean coast (the field is named after the biblical sea monster Leviathan) and it is estimated to hold 25 trillion cubic feet of natural gas (this may sound like a lot but it is less than 1% of the natural gas reserves in the Middle East). Although this may seem like a good way forward in terms of Israel’s journey to becoming more dependent but the development of this field could provoke further conflict. Neighboring Lebanon, a country in a state of war with Israel since 1973, has made claims that the gas field lies within its maritime border and this disagreement is likely to worsen, already fractious, relations between these two countries. So, to accompany the development of natural gas exploitation, Israel is also planning to further their development of solar and wind energy. Israel has pledged that they will try and generate 10% of the energy they consume from renewable sources by 2020. Solar power, perhaps, holds the most potential and in December, Arava Power began constructing Israel’s first large-scale solar field with many more planned for the near future in the Negev deserts.

Growing acknowledgment of both the serious environmental impacts and climate-changing effects caused by the burning of oil and the other fossil fuels is slowly beginning to drive developed countries to implement new long term energy policies. Surely the combination of the current situation, the approaching peak and decline in oil supplies and the rise in price that will accompany this transition, can only add urgency to the need for greater energy efficiency measures and more rapid development of sustainable energy alternatives.....?

1 comment:

  1. I have just found another example of a country that is being provoked to change its ways because of the current situation in Libya ...... Spain is heavily reliant on oil from Libya and imports 13% of its oil from Libya. Spain has just introduced a new, lower, speed limit and the slowdown is intended to save energy in response to the surge in oil prices sparked by the unrest in Libya and other neighbouring countries. I would watch this space as I think that, if the situation continues to escalate, other countries might follow suit and alter things to try and reduce their dependency on oil from countries like Libya............