Every now and then it is necessary to turn to history for a reality check. This is because whilst history is not a perfect guide for the future, it is arguably the best we have. There is now a broad-based consensus that the sine qua non for sustainable economic development is energy efficiency, clean technology, renewable sources of energy, reforestation and ?smart? infrastructure. The world must shift from fossil fuels (coal, oil, gas) to ?greener? energy.
History however forewarns against complacency. It throws up example after example of the long lead times and the huge investments required to transit from one energy system to another. The leaders that will congregate in Copenhagen in December to deliberate on what the world must do to mitigate and adapt to the consequences of global warming should keep these examples somewhere in the back of their minds. For it will help them distinguish between the high notes of the ?ideal? from the dull tones of the ?feasible?.
The 19th century is talked of as the era of coal; the 20th century as that of oil. Similarly people are hopeful the 21st century will be the age of renewables. The sweep of these comments misses one essential point. The growth of oil in the 20th century did not lead to the end of coal. Equally the onset of solar, wind and bio will not result in the displacement of fossil fuels.
The reasons are not simply the cost and convenience although these are compelling. It is also because of embedded energy infrastructures and the gestation period between the development of a new technology and its commercial deployment.
Edison illuminated New York City in 1885. It was not however until 1935 or so that the factories of mid-west America were able to switch from steam power to electric power. This was because of the architecture of the factories. They had to be redesigned and in many cases totally rebuilt before Edison?s revolutionary technology could be deployed.
More contemporaneous, LNG (Liquefied Natural Gas) was first exported from Algeria in 1964. This was made possible through a transformative technology that converted gas into liquids which enabled its shipment in specially designed cryogenic tankers across oceans. Small countries like Qatar, Trinidad and Brunei were consequently able to monetise their huge gas reserves. The LNG business has grown spectacularly over the past four decades. But its share of the energy basket is still only 2%. Coal continues to be the dominant fuel for power generation. Similarly wind turbines were first installed in the US and Denmark 25 years back. But still wind energy occupies only a minuscule share of the market today. And it will not be until sometime in the next decade that it will reach 1% share. Were America desirous of replacing all of its coal based power plants with wind energy, it would require 200,000 wind turbines and a land mass equivalent to the state of Gujarat.
The point is that given the nature of the energy sector and the embedded linkages between the infrastructure and consumption patterns, it will take a long time for new technology to make a material inroad into the domain of ?incumbent? fuels and technologies. What do these examples suggest for the future?
First, technology per se will not be the obstacle to creating a new energy system. Industry will find a technological answer to existing or emergent concerns?as it has always. Thus 3D seismic, horizontal wells, ?smart? production tools, enhanced oil recovery etc when ?easy oil? was no longer accessible; thus GTL (Gas To Liquids) and CTL (Coal To Liquids) technology to combat the problems of environmental pollution and GHGs. The technology will be there and if it is not the companies will develop it. This is the positive lesson. The negative is the problem of dissemination. This has been slow because of the structure of the energy sector and the plethora of infrastructural, policy and regulatory issues that surround it. The question is whether history offers any lesson on how to overcome these obstacles? The specific answer is not clear but there is a generic signal. It is that no one entity, whether government, corporate or NGO, can unilaterally remove these obstacles. Many countries have announced national climate mitigation plans. Some of the plans are impressive in their breadth and targets. Indeed so impressive that several leaders have wondered aloud perhaps rhetorically whether an international agreement is really necessary. The lesson of history would forewarn against such unilateralism. It would posit that given the globalised nature of the problem a shared and collective commitment is the most effective way of accelerating the pace of technology deployment and the transition to a sustainable energy system. History also posits that there will be no energy silver bullet at least not in the foreseeable future. The world will depend on and require a multiple of energy sources and sustainability will depend on the creation of new ?green energy? and the ?greening? of existing energy.
?The author is chairman of the Shell Group of Companies in India. These are his personal views