Are We Stressing the Environment?

Two major global concerns are the price of oil and level of carbon emissions. The US DOE makes a conservative estimate that oil will be consistently between $110-120 by the end of the decade. Population is the key driver as evidenced by the chart to the left comparing growth in population from 1900 to the production of oil.  Note in particular that despite conservation efforts in the mid to late 1970s, production has matched population growth over the past 25 years. Supporting the general trend up in demand and hence prices, the UN expects population to continue to expand for the forseeable future as shown in the below figure.  From there we see that population will rise from current 6.5B to between 8-10B by 2040.  That would imply production exceeding 100 million barrels per day.

Additionally, and perhaps more alarming is the increase in CO2 levels and average temperatures from the late 1800s through the present in the figure below.  The critical number for long-term environmental sustainability is 350 ppm of CO2.  As can be seen from the chart, that level was surpassed around 1990 and now exceeds 370; up 110 ppm over the past 130 years. 

Electricity production accounts for 1/3 of all CO2 production.  The 2011 U.S. EIA Energy Outlook Report states that electricity currently accounts for 40% of total residential delivered energy consumption in the U.S., with projections for both residential and commercial consumption expected to increase 1.2% annually from 2010 to 2035 (not including significant electric vehicle penetration). This growth will require over 200gW of additional electrical energy capacity. With 40% of this capacity already under construction and assuming current construction costs for a gas turbine plant with transmission facilities are $700/kW, additional electric generation costs will approach $90 billion in today’s dollars or $750/U.S. household.

This represents both an energy problem and opportunity for utilities, their customers and society as a whole.  Electric utilities and their customers need to focus on conservation and smart grid solutions to offset the rise in prices and take advantage of new technologies making alternative energy and electric vehicles more economic. The incremental costs for power generation of $750/HH can instead be invested in home energy management systems, at the same time reducing the total amount of CO2 that is generated.

Related Reading:

Map of US showing locations of renewable energy production

Map of US showing over 6400 facilities producing most CO2