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“Today we witness a very great change for hydrocarbons,” saidAlexei Miller, head of Russian oil and gas giant Gazprom, last week. “The[oil price is already] very high, and we think it will reach $250 abarrel.” Cue legions of financial journalists fainting and writhing incoils at the news of impending economic Armageddon. So do you think thatwe’ll see some attempt to move away from dependence on oil now?
Miller is the only CEO of a major oil company who is predicting$250 a barrel oil within eighteen months, because the others remember whathappened the last time the oil price peaked like this, in the 1970s. Thebig consuming countries responded by cutting back on oil use so drasticallythat the OPEC cartel lost control of the price, which then bumped alongbelow $20 a barrel through the late 80s and 90s.
With oil in the high $130s, we are already seeing a move away fromthe monster vehicles that became so popular in the United States during thecheap oil years, but 1970s-style conservation is not going to bring the oilprice down this time. For every American or German switching to a car withlower fuel consumption, there is a Chinese or Indian first-time car buyertaking up the slack and keeping demand high.
So if the car-driving masses are ever to escape from high fuelprices, they cannot rely on simply cutting demand through conservation.They need an alternative fuel, and the bio-fuels that are now on offer –made from corn (maize, mealies), sugar cane, sugar beets, oil palm orsoybeans — simply cannot replace oil. There just isn’t enough land andwater to grow bio-fuels and food too.
It would take half the land-mass of the continental United Statesto grow enough grain to fuel America’s cars and trucks. “Second-generation”bio-fuels that depend on plants like switchgrass and willow are better interms of not competing with food because they grow quickly on waste ground,but they cannot provide the volume of fuel needed either.
So if we’re going to go on driving cars, but we can’t afford tofuel them from petroleum (and we can’t afford to put all those greenhousegas emissions in the air either), then what do we do instead?
This is where it gets interesting, because there are twoalternative fuels that could theoretically be produced in the volumesrequired, and that would not add to the carbon dioxide in the atmosphere. One is algae, grown in open ponds on marginal land, or in nutrient-richsewage farms, or even in completely contained environments in the dark.
Other plants also contain oil, but the great virtue of algae (pondscum, in the vernacular) is that it can double its mass every two hoursunder ideal circumstances, which means it can be harvested daily. The USDepartment of Energy estimates that to replace all the petroleum fuel inthe country with home-grown algae fuel would require 40,000 sq. km. (15,000sq. mi.) of land, which is less than one-seventh of the area devoted togrowing corn in the United States.
The oil that is produced can be burned as biodiesel, or furtherrefined until it is almost the same as the fuel we put we put in ourvehicles today. It needs no special distribution network, works inunmodified engines, and is effectively carbon-neutral. And the biomass thatis left after the oil has been extracted can be fed to cattle, or fermentedto produce ethanol.
Fuel from algae is not yet ready for prime time, but there are nownumerous start-up companies exploring rival ways of growing and processingit, and oil majors like Shell and Chevron are already jumping in as well.The main question is cost, but so long as petroleum stays above $100 abarrel it’s likely that some of these methods will prove competitive.
The other, more radical proposal is to transform carbon dioxidefrom the problem into part of the solution by combining it with hydrogen tomake a synthetic octane fuel suitable for use in vehicles. You get your CO2from the exhaust gases of coal and gas-fired power plants or just extractit from the air directly (the first prototypes of machines for doing thisare now being tested), and you obtain your hydrogen however you like.
Getting hydrogen requires energy, and is only carbon-neutral if theelectricity used to split it out of water comes from a non-fossil fuelsource like solar, wind or nuclear. But combining the hydrogen with CO2avoids the huge problems of storage, refrigeration and high pressuresconnected with using pure hydrogen as a fuel: the synthetic octane can behandled and burned just like conventional fuel.
One or both of these approaches is going to start challengingconventional oil in the market within five to ten years if the price of oilstays high. Security of supply and cost are the big concerns driving thisprocess now, but the ultimate prize is vehicle fuel that does notcontribute to global warming. Conventional oil can never offer thatadvantage, so in the long run it is in big trouble.
Gwynne Dyer is a London-based independent journalist whose articlesare published in 45 countries.
