It appears that everyone is discussing oil prices these days. Opinions vary, but the present uncertainty in the market is believed to be the result of the global economic recession, the slow pace of growth in China and Iran joining the world market. In turn, conspiracy theorists promote their own version: that Russia’s enemies intentionally make oil prices fall to lessen the country’s influence. These are actually secondary factors; in reality, the world does not need more oil and demand is falling. The oil era is coming to an end. The Stone Age didn’t end because stones ran out and similarly, the hydrocarbon epoch will not end because of the disappearance of oil but because of progress in other areas. Around 150 years ago, coal replaced wood and, a century ago, oil and gas began replacing coal. We are currently poised for the next energy revolution. Are there any true alternatives to black gold?
Since the early 20th century, different international organisations have regularly predicted that oil reserves are steadily depleting and, in 25-30 years, all the wells will be dry. However, the years have passed but oil is still being pumped. Crises have been followed by booms and new prognoses made; the cycle seems endless. Doctor of Geological-Mineralogical Sciences, Vladimir Polevanov, explains the process, “Oil is a fantastically superfluous resource: Venezuela alone can supply the whole world. Hydrogen is actively degassing underground; it generates oil at great depths.”
British Petroleum has discovered a major oil deposit in the Gulf of Mexico at a depth of 10.5km: no organic oil was expected to be found there yet this accounts for 10 percent of global reserves. Analysts are convinced that oil prices will sooner or later revive, not only because new deposits will appear. Firstly, all major oil corporations, such as Royal Dutch Shell, Exxon, Total, BP, Eni and Chevron, are based in countries whose economies they support with their businesses and taxes: the higher the prices, the greater profits they enjoy. Secondly, expensive energy resources are the key factor to sustain quickly growing economies, primarily China, which is the USA’s major rival.
On the other hand, high oil prices add to falling demand. As a result, energy saving technologies are steadily developing and alternative energy sources are enjoying increasing popularity. Last year, investments in this sector set a record at $330bn. This level of investment is maintained even now when oil prices are extremely low. In the past, Europe was a world leader in the development of renewable energy but, in 2015, China took over, becoming the world’s major producer and exporter of solar panels. In one hour alone, the Sun produces as much energy for our planet as the global economy consumes in a year. The possibilities of this resource are endless and the southern states are using them to the full, investing huge sums in the construction of solar electric stations.
Nuclear energy is receiving even more attention these days. Saudi Arabia has even announced plans to build a dozen nuclear power stations in twenty years. It may seem strange, as the country boasts great oil deposits. However, the economic situation dictates its own rules: the country annually spends almost a billion oil barrels to produce electric energy. Al Riyadh authorities have decided that it would be cheaper to use nuclear and solar energy, while selling hydrocarbons to the West. Iran has also been working on its own nuclear projects for some time and the United Arab Emirates is attempting to keep up: the first energy block of a nuclear power station is soon to be launched.
Wind energy is enjoying increasing popularity, with Denmark being an acknowledged global leader in this sphere. Its wind stations generate almost a half of all consumed electric energy and, by 2050, the country is expected to reach 100 percent. This year, Lithuania also plans to double its wind energy facilities.
Innovations are also being launched in the automobile industry. The era of electric and hybrid cars is in its infancy but the Boston Consulting Group has already prepared a prognosis that by 2020, these vehicles could account for around 15 percent of all new sales in the four major markets: the USA, the EU, China and Japan. Vitaly Kazakov, an expert in energy security issues, has no doubt that the world car industry will change much quicker than we might expect. “Firstly, as prices for batteries continue falling, a hybrid car in a traditional model will cost a lot less. Secondly, ecologically friendly vehicles will always enjoy additional benefits from the state,” he explains. For example, a car buyer in the USA can get a subsidy of up to $7,500 and consumers are likely to steadily change their preferences. Many European states limit movement in the centre of their major cities already.
Bio-fuel (produced as a result of plant processing) is viewed as an alternative to electric engines. In Brazil, over a half of all domestically sold cars use ethanol made from sugar cane and grain. However, this trend arouses some skepticism. The world demand for food is growing fast and scientists doubt whether the potential of modern agriculture and land resources would be enough to satisfy people’s needs for food and fuel simultaneously.
Our country must take these world trends into consideration. Apart from building a nuclear power station, Belarus is also constructing its own bio-gas complexes, while installing wind stations and developing hydro-energy. The country’s largest hydro-electric power station will soon be constructed near Vitebsk; this will be twice as powerful as that at the Grodno facility. A cascade of hydro-electric stations is planned on the Zapadnaya Dvina River. This will make it possible to significantly cut imports of natural gas which is expected to grow in price over time.
EXPERT OPINION
Leonid Padalko, a senior research officer at the National Academy of Sciences’ Economy Institute, Professor and Candidate of Technical Sciences:
Whatever anyone says, oil is not an endless resource and, by 2015, the peak of mining is expected; oil development will begin falling after this. I would rather not make a bet on any new deposits. There are no such deposits as in Western Siberia. Nuclear fuel is also depleting and its deposits will run for about fifty years only under the existing conditions. However, reactors using quick neurons will replace these; as a result, reproduction of nuclear fuel looks possible.
Is there any alternative to oil? Yes, natural gas deposits greatly exceed those of oil. Taking into consideration the possibility of generating natural gas from shale, this fuel is likely to be available for another 250 years. The whole world is promoting the idea of renewable energy sources but we lack too many hydro-resources and their capacity stands at 250 megawatts. The sun and wind are the key sources. In 2007, a Chinese student was defending his thesis paper on this topic; he predicted that, by 2020, China, would have generated 1,000 gigawatts with help of wind power. In reality, this figure is already much higher.
Europe is already actively preparing to refuse petrol and diesel cars. Electromobiles have already been produced which can drive for 500-600km without recharging. However, they are currently too expensive. Our first mobile phone handsets were not also cheap initially but several years later, they became available to millions of people.
As regards bio-fuel, I believe there are no grounds to be afraid that we’ll run out of resources, including land. Our country boasts much more land per capita than any European state. It’s primarily necessary to use it wisely. We can for example, grow plants which produce rich harvests, i.e. artichokes (which yield up to 200 tonnes per hectare). If processed, this can generate around 10 tonnes of conventional fuel. We’ve already mastered producing bio-gas from cattle waste. If purified from carbon dioxide, it can be turned into bio-methane which is actually a natural gas. So far, this process is underdeveloped in Belarus but we do have reserves and they must be used.
By Yevgeny Kononov
