Paris Climate Summit: Coal Oil and Gas
Climate change is an uncomfortable to topic for many people. Some are frustrated by the lack of real action while others remain to be convinced by the science. Whether or not you subscribe to the view, that our global society is causing the world’s climate to change, is potentially irrelevant because a group of powerful decision makers are gathering in Paris in a few days to try to do something about it.
The leaders of 196 countries are meeting in Paris on the 30th November 2015 to make a new legally binding agreement on how the world will address climate change. The formal name is the United Nations Framework Convention on Climate Change.
There will be many fine words and legally binding agreements, but what can these people actual do? One of their key work streams will be tackling the root cause of climate change, which these leaders have agreed is carbon dioxide (CO2) emissions from the use of carbon rich fossil fuels.
Much of the fine words will be expressed in private, mere mortals like you and me are not allowed in. We will find out afterwards what has been discussed and decided.
We can make some educated guesses about their deliberations. The International Energy Agency (IEA) is a source of robust data. The latest report shows the various sources of carbon dioxide emissions.
The logical approach to addressing this problem would be to use the Pareto principle and take the biggest first. The most significant contribution to CO2 emissions is the burning of coal for heat and electricity generation. Expect the summit to produce a plan to change power generation away from coal in future. This will need a mix of traditional power generation, nuclear and renewables. If you were in the business of building coal-fired power stations a diversification strategy would be prudent. Interestingly the UK government has just announced a doubling of spending on energy research with a major commitment to small modular nuclear reactors.
Get our daily investorintel update
Making changes to electricity and heat generation will be quite a challenge for the generators, however electricity made from burning coal is indistinguishable from electricity made by wind, solar or nuclear power. As consumers we won’t notice any difference provided the lights stay on.
Looking at the data, oil will be the secondary focus for the summit.
When considering possible actions to reduce emissions from oil we need to know what it is actually used for. Before looking at the data, many people I talk to think that oil is mainly used for chemicals and plastics.
In fact three quarters of the oil we get out of the ground is burnt in engines to move us – and our goods around. Nearly two thirds of the CO2 emissions are due to road transport. Expect to hear decisions about more electric cars and trucks on our roads in the future.
This prompts the question – are electric cars really good enough to replace diesel and petrol (gasoline) cars? Let’s make a direct comparison between diesel and electric cars using the best lithium batteries available. The following chart shows how far you can travel in a car when the space for the 70-litre fuel tank is filled with either lithium batteries or fuels of various kinds.
You’ll realise that to travel any distance with lithium batteries a lot more than the standard 70 litres of space used for the fuel tank will be needed. Electric cars powered by batteries alone won’t get you very far before they need to recharge. This might not be a problem for short urban commutes but not for longer distance travel.
We hear a lot about battery power, could the electric cars of the future be a different design?
Diesel and gasoline pack a powerful amount of energy into a small space. Electric cars are efficient and responsive. Using the diesel or gasoline liquid fuel to power an on-board generator that produces electricity to power the wheels directly could be the best of both worlds. Liquid fuel engines driving generators can run more efficiently. This design also removes much of the mechanical drive train, reducing weight and contributing to greater fuel efficiency.
Our society is built around road transport. Any change here will impact all of us directly. Could you do without your car? – Perhaps; but could you do without the trucks that keep our stores supplied with the food and supplies we all need every single day of our lives?
The decision makers at the Paris Climate Summit will take in to account that we need road transport for the foreseeable future and oil derived fuels are an intimate part of the supply chain. The best we can hope for in the near future are more efficient cars and trucks that reduce the CO2 emissions. The coal industry might be about to give way to gas, nuclear and renewables but oil will be with us on the highway of the future for some time to come.
Adrian Nixon is a Senior Editor at InvestorIntel. He began his career as a scientist and is a Chartered Chemist and Member of the Royal ... <Read more about Adrian Nixon>