No, Really: We're Going to Keep Burning Oil—and Lots of It

No matter how much we wish it were otherwise, the economics favor burning fossil fuels.
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Reuters

I am grateful that Amory B. Lovins devoted so much attention to my piece, but I'm afraid I'm going to have to stand my ground.

As I understand him, Lovins makes five main critiques:

1) My article "is entirely about quantity of [petroleum] supply," when "mainstream analysts see 'peak oil' emerging not in supply but in demand." The purported lack of demand is because "oil has become uncompetitive even at low prices."

2) One of "many errors" in my article is my claim that economic growth and energy use are tightly linked.

3) Germany is not emitting more carbon dioxide today, no matter what I say in my article.

4) Renewable energy sources like solar power and wind power are cheaper than oil and natural gas (this is similar to the first critique).

5) Renewables do not "require massive storage and intercontinental transmission."

Each claim is incorrect. I will treat them in order.

1) Peak Oil. Contrary to Lovins, "mainstream analysts" do not see "peak oil" as a question of demand, rather than supply. In The Quest (2011), Daniel Yergin, probably the world's best-known energy analyst, describes "peak oil" as "the fear that the world is near or at the point of maximum output, and that an inexorable decline has already begun, or is soon to set in." The first page of Peaking at Peak Oil (2012) by Kjell Aleklett, president of the Association for the Study of Peak Oil and Gas, the most important peak-oil group, defines it as the "point in history when oil production reaches a maximum possible rate, Peak Oil, before declining." "Since 2005," Aleklett goes on to say, "our use of oil has been limited by production, not demand." In other words, "mainstream analysts" see peak oil in precisely the opposite terms from those used by Lovins.

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Is "oil uncompetitive even at low prices"? Lovins's assertion is glib, to put it kindly. His stated example is the "uncompromised, oil-free U.S. automobile," which he argues could run far more cheaply than a standard gasoline vehicle. Lovins' source for this claim is Reinventing Fire, whose principal author is ... Lovins. The automobile in Reinventing Fire is Lovins' "hypercar," an ultralight electric/hydrogen/biofuel vehicle which in various incarnations he has been futilely urging carmakers to produce since 1991. 

Why has no business raced to build the hypercar, despite its supposedly obvious advantages? One reason is that much of the fuel savings depends on its construction from carbon-fiber composite materials (compared to heavy vehicles, lighter vehicles need less energy to reach a given speed). Unfortunately, as Lovins has admitted, the task of "inserting composites into a steel car raises numerous, often costly and sometimes intractable compatibility issues" that automakers can only overcome by switching "to extensive, whole-platform 'clean-sheet' applications" -- that is, by scrapping their entire existing manufacturing system, an expensive prospect.

In sum, Lovins is touting the future economic benefits of new technologies but neglecting the initial costs. These are considerable. In Reinventing Fire, Lovins estimates that achieving these savings will require American consumers and businesses to invest $2 trillion. One thesis of my article: Americans will be less likely to spend trillions on fancy no-oil cars if cheap petroleum is in abundant supply.

2) Economic growth and energy use. Lovins says that I back my argument that energy and economic growth march together "by citing only global data (mixing early-stage developing with industrialized economies) for all forms of energy (diluting oil and gas with cheap coal and hydropower) for 1900-2000." Apparently, Lovins did not read the next paragraph of my article, in which I describe the lockstep association between energy-price spikes and economic recessions in the postwar United States.

As Lovins observes, I did lump together developed and developing countries and multiple types of energy. Because I was making a global argument, this procedure seemed entirely appropriate. As one zooms in, the details of the relationship between energy supplies and economic growth change. But everywhere on the planet, as the Australian economic historian David Stern has recently argued, energy remains a primary constraint on growth -- the point I was making in my article.

3) German carbon dioxide emissions. Lovins is correct that during the last decade coal-fired electricity declined in Germany as the country shifted toward renewables. But since 2011, when the government decided to abandon nuclear power, Germany has significantly increased its reliance on coal, as I described in my article. Contrary to Lovins' implication, this rise is not a blip: In April, Germany announced plans to raise its coal-fired generation capacity still further. Why is this? Presumably, Germany, a nation admirably committed to green energy, would choose solar and wind power if, as Lovins suggests, those forms of energy were the cheapest alternative. Unfortunately from a climate-change perspective, they are not.

Lovins then adds: "Despite economic growth, German carbon emissions fell 2.8 percent in 2011; in 2012 they rose 1.6 percent due to a cold winter but fell after weather-adjustment." This is doubly inaccurate. First, the figures Lovins quotes refer to the change in total greenhouse-gas emissions, not carbon emissions. Second, the nation's total carbon-dioxide output actually rose two percent, according to the German environmental agency, because of increased use of coal and natural gas. Worse, the biggest part of the increase was from lignite, the dirtiest kind of coal. It would be more accurate to say that Germany's carbon-dioxide emissions have risen slowly but inexorably since 2009, even as U.S. emissions have declined, as rising coal consumption has offset increased deployment of renewables.

Presented by

Charles C. Mann, an Atlantic contributing editor, has been writing for the magazine since 1984. His recent books include 1491, based on his March 2002 cover story, and 1493.

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