NEWS RELEASE SEPTEMBER 2014
Huge Variables in the World Energy Outlook
Our energy sources are wind, solar, other biomass, hydro, nuclear, petroleum liquids, gas and coal. The McIlvaine Company continues to analyze and predict the future of each of these sources.
At some point in time fossil fuels will no longer be an energy source. As fossil fuel resources are depleted, the price will rise. The extent of that rise will be dependent on the availability and cost of the alternatives.
Petroleum liquids have been more highly valued than other forms of energy because they have more uses and specifically have been the exclusive choice for transportation. This advantage could be diminished as natural gas and electrical energy are becoming increasingly competitive to supply transportation energy.
Nuclear energy unlike biomass has the capability to supply much of the world’s energy needs. Questions about safety and cost and, most importantly, public prejudice threaten future use of this energy mode.
Near-term competition is mainly among various forms of fossil fuels. The most important development has been the conversion of one form to another. China has embarked on a huge program to convert coal to synthetic natural gas, gasoline and chemicals. Sixty large coal to syngas projects under development in China would equal two-thirds of the U.S. shale gas output.
Other countries are also pursuing this course. The Ukraine and China are cooperating to build four large coal to syngas plants using Ukrainian coal. This will lessen dependence on Russian gas.
There are a number of projects to convert coal to Liquefied Natural Gas (LNG). Some involve above ground gasifiers. Some involve underground gasification and others will utilize coal bed methane. Posco, the large Korean steel maker, is completing a plant to convert coal to LNG. This gas will replace the purchased LNG presently used in steel making operations.
Australia has a number of LNG projects involving coal bed methane and underground gasification. The country recently abolished its carbon tax and is no longer pursuing a strategy to reduce global warming.
Whereas in the past it appeared that the efforts to reduce global warming would shape the energy future, that no longer appears to be the case. Asia is focusing on solving its immediate problems and has placed a low priority on global warming. Europe has fallen way behind its timeline for CO2 reduction. The urgency has been reduced by what the environmentalists term a “pause in global warming” and what opponents claim is proof that the predictions were wrong.
Further information on these forecasts is found in: