Energy and the environment: will we be able to resolve the conflict?

Energy and the environment: will we be able to resolve the conflict?
Dr Helmut Sohmen, Chairman, Bergesen Worldwide Limited, Bermuda/Hong Kong

1. Will the world's increasing population make energy shortages inevitable?

2. Can China's growing energy needs be met, or is a resource war between China and other major energy-consuming countries inevitable?

3. Is there a realistic hope that new and renewable energy sources will be found before pollution from the use of fossil fuels has produced irreversible climate change?

Three simple questions more frequently being asked but increasingly becoming more difficult to answer.

Energy shortages have begun to appear in various parts of the world, not because energy sources are suddenly getting scarce but because spikes in demand for energy are more regularly confronted by infrastructural weaknesses or short-term bottlenecks. The race to new locations for supplies is intensifying and with it may come enough friction that might lead to military confrontation.

Increasingly, coal and oil are supplemented by gas for electricity production. More LNG plants are planned in Japan and many other nations. Atomic energy is finding new converts. Shipping has added new capacity to transport energy over long distances. Technological advances are helping other renewable and non-renewable energy to become commercially cost-competitive and/or environmentally acceptable. But they also take time to install. And the world is still waiting for real break-throughs: in the conversion and transmission of solar power, in fusion power, or in efficient energy storage systems.

The growing use of energy, in both developed and emerging economies, is adding to the political pressure to tap resources and ensure the stability of supplies. Very few nations outside the major oil and gas producers are self-sufficient. At the same time, it is difficult to see business concerns and the public at large to heed the need for conservation voluntarily. Purely nominal fiscal sanctions constitute no real disincentive either. The Chinese example is illustrative. What may be needed is another cataclysmic event to encourage conservation: like the sudden oil price shocks of the 1970s when the world reacted with some fear which lasted for a little while.

Serious concern with the environmental impact of additional energy consumption however is limiting supply alternatives. Japan has 55 nuclear reactors, but only 32 are presently in operation. Old plants are becoming a headache for their operators. At least MOX as fuel was given the green light earlier this year in the Genkai reactor in Saga Prefecture. China now has 7 reactors in operation and plans for another 36 by 2020.

Japan, like other countries, has problems with its commitment to reduce greenhouse gas emissions under the Kyoto Protocol (a prescribed 6% reduction in CO2 output from fiscal 1990 levels by 2008-2012). Emissions from cars and aircraft both rose 50% from fiscal year 1990 to 2004, although SOX and NOX pollution from ships and aircraft is increasingly also being targeted. Whether it is cars, TV screens, Internet access, air-conditioning, or water-jet toilets, consumers are becoming more sophisticated, continuously require more energy, and emissions inevitably rise.

In choosing between energy and the environment, decision-makers find themselves more and more often between a rock and a hard place. There are no easy political solutions even when and where technical advances may provide a way forward.

Cost/benefit analyses on the personal level differ from those at national and global levels, and it is part of human nature to recoil and reform only when facing a deep precipice.

In the meantime, perhaps the answer to the first question above should be "yes", to the second "not inevitable, but conceivable", and and to the last "not when judging by the current state of affairs".

It is difficult to believe that the global energy situation can stabilise at an environmentally acceptable level before fossil fuels are fully eliminated as a primary energy source -- this truth may as yet be hard to accept but no doubt does underpin the ongoing optimism in world shipping circles.

By Dr Helmut Sohmen, Chairman, Bergesen Worldwide Limited, Bermuda/Hong Kong