September 19, 2009
It was all Sturm and Drang at the Friday morning presentations at the Global Business Forum.
Participants were jolted awake by the comments made by author and journalist Gwynne Dyer, whose grim message was that the world is heating much faster than scientists anticipated. Without strong and swift action aimed at reversing the trend, said Dyer, the world faces an apocalyptic future of famine, unpredictable weather patterns and drought. And these were just a few of the highlights.
It was enough to have everyone bolting from the room in search of a stiff drink.
But it didn’t end there.
The panel discussion following Dyer’s bleak pronouncements, not to mention Karen A. Harbert’s address over lunch, offered only more uncertainty. Harbert, president and chief executive of the Institute for 21st Century Energy, painted a depressing picture of the situation south of the border on climate change legislation, along with other energy-related initiatives that could act as disincentives for private-sector investment.
The lack of consensus on both the impact of and solutions surrounding climate change recalled an old joke that if all the economists were joined, end to end, around the world, they still wouldn’t reach a conclusion. The same appears to be true in the realm of climate change.
The only area where there was some form of agreement was that, in fact, the climate is changing, but the debate rages on as to the cause. The world, as scientists have been pointing out, goes through heating and cooling cycles over 100,000-year periods. The unanswered question is whether global warming today is part of this normal cycle or the result of human activity that has seen world’s population triple in the postwar period.
The fact the debate continues to be fragmented suggests that if there were expectations the December climate change conference in Copenhagen might reach a consensus on setting emissions targets and how to achieve them, that they should be set aside.
One of the issues, pointed out by Janet Peace of the Pew Centre on Global Climate Change and author Laurence Solomon, is that the U. S. is unlikely to pass its climate legislation before the end of the year because of the administration’s preoccupation with health-care reform. Without the United States –which accounts for 25 per cent of global emissions –arriving in Copenhagen with a firm plan on how to deal with climate change at home, the conference will fail to achieve its objectives.
While most people are notionally aware of the impact of higher temperatures around the globe, the fact that Australia is entering its eighth year of drought and that the polar ice cap is not as big as it was a few years ago, the biggest bombshell of the morning arguably came from one of the energy sector players.
chief executive Hal Kvisle poked some very big holes in the solution du jour for reducing greenhouse gas emissions: carbon capture and storage.
In short order, Kvisle painted a picture of the scale and cost of carbon capture and storage facilities. To store the carbon dioxide generated by a 500-megawatt plant, a reservoir the size of a 20-storey building is needed. If 6,400 of Alberta’s 8,000-plus megawatts come from coal-fired electricity, a lot of big reservoirs need to be found.
But that’s not all.
Retrofitting existing coal plants to capture carbon dioxide, especially the older ones, doesn’t make sense, either. Not only does it reduce the amount of available electricity because of what is needed to power the carbon capture and storage component, it’s not cheap.
In his view, the new plants at Genesee and Keephills that are relatively new are worth investing in–but the numbers don’t make sense for the others that are on either side of a decade from being decommissioned.
The take-away from all this is that the era of cheap energy is over. Much has been said and written about this in the context of transportation and fuel costs, but electricity is soon to get more expensive. Even if new plants are built with the ability to capture and store CO2 at the source, the cost per megawatt hour is more than double what it is today. Other options –such as nuclear–are even more expensive; it might be cleaner but the regulatory hurdles are so high that it remains questionable whether a new facility will be built in the next decade anywhere in North America.
Natural gas, which is often viewed as the bridge fuel to the future and would go a long way to addressing the emissions issue in the U. S., generates electricity at a price that works out to about five times the prevailing natural price.
One of the problems with natural gas-fired power is the inherent volatility in natural gas pricing; there have been a number of such power plants built in the U. S., but because the economics don’t work above a certain natural gas price, these are effectively sitting idle.
What was apparent in all the discussions was that addressing climate change is not a zero-sum game. And there is no such thing as a magic bullet. The world, as has been pointed out by Cambridge Energy Research Associates, is poised for a structural change in how it uses energy not seen since the 1970s.
The journey is clearly just beginning.