The new Schizophrenia: Think like an Engineer, Act like an Activist (or maybe it is the other way around)

In this article I am looking for your help. I first heard this quote/challenge from Johanna Dunlop, SPE GAIA evangelist and I have been thinking about it a lot for the past two years. She is a very persuasive and passionate individual whom I admire a lot. But I must confess that my brain has been wired as an engineer (actually, as a geoscientist) over my entire career. What does this call-to-action phrase mean to me and can I pull off this personal transformation?

Activist emphasizes environmental and social goals like climate change and social justice by using policy and regulatory levers and a lot of person passion (the protester). An Engineer follows science, technology and market-based economic to solve technical problems, creating new products and services and value for shareholders in a dispassionate, objective manner (the nerd). The recent history of the growth of renewable energy sources has been Additive to the growing global energy demand not a Replacement for fossil fuels and we are lucky to have that contribution. The world is headed down two paths simultaneously, one guided by environmental aspirations and the other by the need for sustainable economic growth.

More Inconvenient Truths

The amount of carbon emissions is still growing (despite a plateau in North America and slight decline in western Europe). The current global average concentration of CO2 in the atmosphere is 421 ppm as of May 2022 (0.04%). This is an increase of 50% since the start of the Industrial Revolution, up from 280 ppm during the 10,000 years prior to the mid-18th century. Despite all the UN meetings, scientific reports and the media pre-occupation with climate change, we haven’t made much progress. Regardless of all the policy announcements from the G7 leaders, the game now shifts to China and India where 35% or 2.8 billion people live. Global temperatures are rising (1.26 degrees C over pre-industrial period according to the World Meteorology Organization and are forecasted to rise past 1.5 degrees in the next decade) and extreme weather events are in the news almost every night. But demand for fossil fuels is also growing alongside a rapid increase in renewable power (wind and solar) and sales of EVs in developed nations is rising. Demand for coal is continuing to grow as an affordable alternative to biomass in poorer nations.

More Inconvenient Truths, and no I am not a denier

Years of rhetoric and trillions of dollars of spending and subsidies on a transition have not significantly changed the energy landscape, nor have they altered the long-standing geopolitical tensions inherent in supplying fuels critical for survival. Added up over the past two decades, the cumulative subsidies (some call them investments) across the world for biofuels, wind, and solar approach about $5 trillion, all of that to supply roughly 5% of global energy (and still offshore wind is uneconomic). Civilization still depends on hydrocarbons for 84% of all energy, a mere two percentage points lower than two decades ago. Solar and wind technologies today supply barely 5% of global energy. Electric vehicles still offset less than 0.5% of world oil demand. We still have a long, long way to go and not that long to get there.

In the complex calculus of energy policies, the decarbonization road map also creates problematic realignments in energy supply chains. Start with the facts that the U.S. today is dependent on imports for 100% of some 17 minerals that are already listed as critical for national and economic security and that, for 28 other critical minerals, U.S. imports account for more than half of existing domestic demand. China’s global market share in refined energy minerals is double the market share that the Organization of the Petroleum Exporting Countries (OPEC) has in oil markets. ?

Even more Inconvenient Truths

The good news is that the Energy Transition provides us with the opportunity to rethink and redesign our relationship with energy, economics, and the environment. But the not so good news is that we must rethink demand not just supply, understand what is critical to whom, and the history that a false urgency leads only to market speculation. If you need a new mine NOW, it will probably take 16 years to get all the permits, unless you are in China. This is something politicians are really scared of: asking voters to change their behavior. Demand pricing for energy and bans of sale of ICE vehicles are not as popular as the activists thought (outside of California).

The president of Nigeria faced backlash for removing fuel subsidies. French president Macron faced yellow jacket protests (Mouvement des gilets jaunes) for rising energy and fuel prices when he tried to remove government subsidies. The German government including Robert Habeck, co-leader of the Green Party and economy czar, had to water down a bill on adoption of heat pumps due to public pressure. Germany even had to take down part of a wind farm to expand a lignite coal mine. Enthusiasm for environmental initiatives can sink the moment they threaten household budgets. The British Prime Minister Rishi Sunak has backtracked on promised to the end of sale of internal-combustion vehicles and phase out of gas-boilers with heat pumps. Those darned heat pumps are causing a lot of trouble across Europe.

You are really not going to like this (Energy Divide and Just Transition)

Sustainable Development Goals: Why can’t they have a good life as well? Western leaders tell Africa that they must decarbonize. African leader respond by asking why can’t they use their fossil fuel resources to rise from poverty first and where is the US$100 billion they promised in 2009? The billion people living in wealthy nations use at least 500% more energy per person than the world’s other 6 billion. Wealthy nations have 80 cars per 100 citizens; there are only a few cars per hundred people elsewhere. More than 80% of the world population has yet to take a single air flight. In America, there are nearly as many vehicles as people (and more guns), while in most of the world, fewer than 1 in 20 people have a car. Drug manufacturing is far more energy-intensive than fabricating cars or aircraft, and hospitals use 250% more energy per square foot than commercial buildings.

The Global South needs sustainable economic development at the same time as decarbonization (not just charity, but capability building). The Global North can just focus on climate change which is hard enough. Providing billions of people with cheap and reliable energy has been one of the greatest achievements in human history but we didn’t spread the wealth very equally. Moving fuel into the twilight of economies has freed up capital for pursuits in health, environmental protections, comforts, leisure, and entertainments. That progress has been entirely a consequence of the inherent physics and economics advantages of the great expansion in the extraction and use of hydrocarbons. But there is an environmental price to pay for that progress. Replacing that energy ecosystem is not going to be easy. The physics of energy density is real. Substituting electrons for fuel will require a lot more electrons.

The Cost of going green (is not just financial)

Public subsidies versus (should be and) Private Investments, ESG investing, investments in carbon sequestration, transmissions lines, battery storage, hydrogen hubs, nuclear and EVs are all part of the cost of going green. China and India are leading the world in both directions. The O&G industry must find a way to make methane the “cleanest molecule” to win back public support or else be assigned a back seat in the energy transition debate. A recent climate meeting at the White House didn’t even invite the O&G industry.

My engineer brain tells me the current path is not going to work. Innovation and emerging technology play a role as well as better operations and better facilities design (design emissions out). The head of OPEC has said that 'emissions are the enemy not carbon is the enemy' but many lump the two together are shout ‘keep it in the ground’ and get out of town. ?I did not have many friends in the environmental community before and after this article is published, I think I will lose the few I have made.

Environmental activists talk about climate change and global warming, not who is going to pay or what individuals in rich countries will have to do and they are not wrong. Engineers talk about facility design subsurface characterization, project management and economics and they are not wrong either. Where is the common ground? Scott Tinker calls for the "radical middle." It seems like the most dangerous place to be. Ms. Dunlop is trying to bridge the divide, but how many of us support her? Are we trading energy dependence on OPEC (not considering North American shale and newly discovered natural gas basins) to dependence on the energy minerals (or the processing of building block products) from China? Is the recent ban on graphite from China the beginning of a new supply chain war?

Put simply: policy aspirations no matter how noble, and language, no matter who it comes from, cannot change the existence or nature of, for example, the laws of thermodynamics. The consequences of the underlying physics of energy are visible in five key realities: real-world costs (fuel is free but renewable infrastructure is not), the velocities of big systems (they move slowly and unevenly), the use of materials for building all machines (there is no such think are totally renewable), the locus of key materials suppliers (not often where we want them), and the inflationary impact of forcing markets to adopt supply-mandates and minerals-intensive energy systems.

I am in the all-of-the-above energy camp (and with Dr. Tinker in the radical middle) with more focus on carbon emissions, but that is probably not enough for Johanna and Gaia. I am sorry Johanna I still have not got there yet. I have been trying but my engineer brain is still having trouble digesting the activist’s perspective. Where do I begin? What am I missing? ?

Some of the data for this article comes from this source: https://manhattan.institute/article/the-energy-transition-delusion#notes and many other public sources.