These Clues Suggest We’re Headed For a MASSIVE Global Energy Crisis
by Fabian Ommar
We’re going through a civilizational-scale metamorphosis. It’s a broad-range process that happens every few generations or centuries and reshapes so many aspects of society that a new one has risen on the other side once it’s over. As history shows, this will play out through a long period going ahead.
But events are already underway and being felt. More is to come. While developments in COVID-19 and sways in the economy, finance, and politics galvanize attention and monopolize M.S.M., the energy sector is undergoing profound transformations that will significantly impact our lifestyle. Because, well, everything runs on energy.
This model transition has been going on for some time now. Like many other events taking place everywhere else, it’s accelerating and already showing through cracks in the system, compounding the instability sweeping the U.S. and the rest of the world.
There isn’t much we can do about the big scheme. We’re just passengers, really. But understanding what’s happening and how this shake-up can affect us is still important. To see the forest for the trees, though, we must first try and connect some dots.
Energy is the basis of modern civilization
The development of sanitation enabled the expansion of cities. Common diseases were eradicated with the help of sewage and treated water. Humankind could finally enjoy the productivity and other benefits afforded by large concentrations of different people living and working together. But the intensive use of hydrocarbons and the electrification boom in the late 19th and early 20th centuries changed everything.
Energy consumption patterns have significantly varied throughout history. Two hundred years ago, everyone used wood as fuel. Then coal became the primary source of energy. The transition to petroleum and natural gas came a few decades later. Nuclear emerged after World War II, while renewables have been gaining ground for the last 20 years.
Though supply has increased following population and industrialization growth, the use-share of energy sources remained relatively stable during the last few decades. Fossils have dominated for the past hundred years. Coal, oil, and natural gas still account for the majority of the energy supply worldwide.
The Energy and Power Matrix (or mix) explained
The terms energy and power are used interchangeably, but they’re not the same.
Energy moves and heats matter. Power is the rate energy is used or converted.
These concepts used in physics similarly apply to express production and usage of both energy and power in countries and the world. Since a varied mixture of fuels and sources compose these indexes, they’re called matrix or mixes.
• Energy matrix (E.M.) is the total energetic expenditure of a country, region, or the world. It’s the combination of primary (unconverted) and secondary (electricity) sources used for transportation, heating, the military, and large-scale production.
• Power Generation mix (P.G.) is the electricity production for final consumption. It’s a subset of the Energy mix, comprising renewable/low-emission (solar, wind, hydro, and nuclear) and non-renewable (coal and fossils), and used to power The Grid directly.
Source breakdown is different in the energy vs. the power mix
Hydropower accounts for 15,8% of global power generation, but only 6.4 % of the energy mix. The difference is even more significant for oil: only 3.1% are used to generate electricity, but a massive 33.1% for transportation and heating. That’s mainly because power generation is determined greatly by energy policies, and these can vary radically among countries.
Some examples: in France, 70% of the electricity (P.G.) comes from nuclear. For comparison, in the U.S. it’s 21% and in Germany, 28%. Nuclear generation contributes only 2.3% to Brazil’s P.G., while hydropower makes up a whopping 64% share of its electricity pie. Australia has only 5% coming from hydro and 56% from coal. And so on.
Today many of these variations largely reflect energy policies implemented by governments almost half a century ago, when the last significant energy shift happened. In keeping with the examples above, the Messemer plan was responsible for the “nuclearization” of France’s power generation during the ’70s and ’80s. Brazil went a different way, but its large hydropower capacity also results from massive investments made by the military government during that same period. U.K., Germany, U.S., and others also devised their nuclear programs around that time too.
Energy policies change over time, driven by social, (geo)political, and economic trends
Large moves take a long time to materialize. The energy sector is more transatlantic than a speedboat. It took the U.K. almost four decades to reduce coal usage from 60% in 1980 to near 2% of P.G. in 2019. Regardless of objectives, strategies, or direction, years are necessary to start seeing results and generations to fulfill plans. Not to mention realization frequently falls short of projected targets.
Disasters cause major impacts and important, long-term shifts, too. The Fukushima reactor accident in 2011 brought a massive backlash against nuclear energy during the last decade. Not only in Japan – perhaps one of the most committed to the promotion of nuclear energy in the modern era – but the entire world.
Fluctuations in price or availability of a particular fuel (or fuels) can cause shocks. Changes in alliances may facilitate or impose barriers (weaponization) to trading and new initiatives or steer policy directions. The market plays a big hand in this as well: significant price drops in the wake of the “Shale Revolution” boosted gas and oil adoption during the last decade. These dynamics repeat everywhere.
Production is only part of the equation
It usually takes place at locations distant from consumption centers, particularly in the case of electricity. Delivery to final consumers is done by way of highly complex and capillary transmission and distribution systems. Opening fronts or expanding parts of the grid are costly, red-tape nightmares. It’s also a long-term, high-risk, capital-intensive business, dependent on specialized, heavyweight equipment. The same holds for oil and gas.
The above is vital for these reasons:
- Energy transportation/power transmission is in many instances transnational.
- The main infrastructure is already a few decades old in most countries.
- Legislation and regulations are also outdated in many places.
- The transmission system was built based on non-renewable power generation.
The implications of 1, 2, and 3 are self-evident. Number 4 matters because solar and wind generation present temporal fluctuations and geographical distributions that impose significant challenges to the power system. Nuclear, hydro, and coal can supply 90% of the time (or more), whereas solar reaches a maximum of 50% (daytime only and in near-perfect conditions). Wind has similar limitations.
Due to these and other technicalities, the growing shares of VREs (Variable Renewable Energies) feeding into the existing networks is creating imbalances and concerns for Transmission System Operators (TSO). Especially in Europe, where de-carbonization is big. The issue is being monitored, and engineering may develop solutions and safeguards. But issue is what we usually have before something becomes a problem. And when it comes to energy and power, entire populations can get affected whenever “something” happens.
Instabilities, outages, and spikes in price are potential threats
Significant events took place in developed and developing countries around the world in 2020:
- A black-out amid the COVID-19 outbreak had hospitals resorting to generators in Mumbai, India.
- Wildfires caused rolling grid-downs in California, the first in almost 20 years.
- A transformer caught fire, leaving an entire state in Brazil without power for a month.
- Simultaneous power outages hit four high-density regions of Kazakhstan over months.
Then we had Texas early this year (here is a website that keeps track of power outages worldwide for those wanting to monitor the situation).
Were these not-unusual or isolated events? I’ll defer that to experts. Do they signal fragilities and vulnerabilities in the systems? Absolutely. The appointed causes range from natural disasters to equipment failures, bugs, and even suspected cyberattacks. The fact remains that millions were affected, and even larger populations could suffer if similar events keep occurring.
Then there’s the very present threat of price hikes. I know it’s already going up and fast. I’m talking about sudden, explosive surges, especially in gas, diesel, natural gas, and electricity. The kind that could mean larger parts of the population suddenly struggling or even forced out of The Grid, unable to pay for energy. Companies could go under such context too, which would be equally bad.
And even if supply remains stable, significant price shocks will ripple through the production chain. Disruptions and spreading inflation come to mind as possible results. That is not gratuitous doom porn: something similar happened in the 70’s Oil Shock. The context is different, but if anything, civilization has become more energy-dependent, not less.
Complex and highly interconnected systems are inherently vulnerable
Many factors can impact the energy sector. For example, the Ever Given container ship stuck across the Suez Canal in Egypt, causing massive gridlock in the world’s busiest shipping route. Though it was finally freed after ten days, shockwaves will be felt throughout global trading. Estimates say the canal blockage trapped about 2% of the worldwide oil supply in the mess. Sounds minor, but it’s not – and it ain’t over yet. Another blow to an already strained industry and the stressed economy.
When it comes to power transmission, repairs, expansions, and adaptations can take a long time. Replacements are costly, often sourced overseas. Sure enough, contingency and emergency plans are in place. But as in other sectors, “just in time” means fewer or no spares are kept in stock for maximum “efficiency” (and profitability, of course). Since COVID-19 struck, we know what that means when some SHTF.
Geopolitically, energy is a strategic and critical national security concern, so it’s already highly weaponized and politicized (see Nordstream 2 Project quarrel, among others). As we’ve seen, the grid can also be targeted for cyberattacks and subject to natural, climate-related threats. Rest assured, though: even with all that, the changes will advance.
Green isn’t as clean as we’re being told.
The Green Wave is finally coming of age.
Regardless of your, mine, or anyone else’s opinion, the “green” revolution will happen. It already is. The revolution is one of those deep-running movements even governments, institutions, or the market have little authority over. It’s the Big Wheel in motion, and it’s accelerating.
It won’t be linear and may turn out differently than most people think or activists paint. For years we’re being sold the “green” future as a fleet of E.V.s and rechargeable appliances whizzing around pollution-free cities, fully powered by tidy photovoltaic parks and instagrammable wind farms. But there are hurdles:
- Renewables aren’t as “green” or as “clean” as believed. They require metals, minerals, and other materials in large quantities, which demand mining, fossils, and other environmentally damaging processes to manufacture, assemble and operate.
- Renewables are unreliable:2.5 to 3.5 times on average less reliable than non-renewable sources. Even if you prefer intermittent or variable (semantics), this is an issue. In many places, they’re impractical due to conditions.
- Lifespan is 20-30 years for solar and wind generators. Nuclear reactors can last double that or more. Hydro powerplants can run indefinitely. Much from wind turbines, solar panels, and batteries can’t be recycled and need special disposal.
- Solar panels, wind generators, and batteries are approaching an efficiency apex. Older generation ones are very inefficient and nearing retirement. There will be gains, but breakthroughs are harder to come by.
- Strict regulations may hinder expansion at projected/committed targets soon but are required until more knowledge is gathered about impacts, side effects, and other unknowns. Technology is relatively new, and there’s still a lot to learn about all that.
The question is that when put against fossils and nuclear for energy density, efficiency, stability, and reliability, renewables still fall short in those necessary standards, at least for the time being. Coal, oil, and nuclear are still abundant enough to warrant energy and power supply in large quantities for decades to come. That makes it clear the “green revolution” is not about low-emission replacing hydrocarbons entirely but instead adding to the mix in growing quantities.
Some may frown at these facts. None of that means renewables aren’t good, just not perfect or the saving grace touted by some. No source is perfect. They all have limitations and trade-offs. They all cause some damage to produce, convert, transport, or use. To live is to consume. Renewables have many positives and will advance by leaps and bounds, probably just not the way it’s seen in movies, magazines, and marketing pieces.
Decentralized power generation: the real Green Revolution?
New forms of production and generation must be constantly developed and added to the mix to keep up with ever-growing energy demands. It’s exactly what’s happening with renewables. Citizens and private companies are adopting renewables to electrify their own lives on a large scale. Is widespread, decentralized production the future of energy and power? Or the green revolution will happen by way of corporations and governments investing in large installations? Maybe both? We’ll see.
But there’s more.
However this plays out, “The Grid” will still demand a big-league, more proven solution for its needs. According to the International Energy Agency (IEA), global energy demand is projected to rise by about 50% by 2040 and to double by 2050 nearly. Nuclear is currently the cleanest, safest (yes, safest) large-scale power-generation technology capable of meeting that.
Nuclear comes full-circle and will see a revival propelled by necessity.
Fukushima was the last nail in the nuclear debate, but atomic energy was already falling out of favor before the accident. Inadequate policies, lack of fulfillment, and many (misleading and undeserved) negative marketing helped give it a bad rep. The surging of solar and wind technologies in the late ’90s had the world in love with the idea of clean and risk-free energy – an easy selling ideology that has been cleverly marketed as the perfect solution by some.
These and other events tilted policies in many countries. Germany committed to shutting down its 17 reactors, effectively reducing nuclear share from 28% of P.G. to zero by 2022. Australia shelved its nuclear program after the Labor Party won the 2007 election. Others went the other way though: the U.A.E. – one of the largest oil producers, no less – OK’d its first plant also in 2007. Barakah NPP Unit 1 connected to the grid in August last year. Plans are for nuclear to supply 25% of the country’s P.G. in the future.
Personalities like Elon Musk, Bill Gates will help boost worldwide acceptance. They are (among others) big promoters of the technology currently investing in next-gen nuclear alternatives. Whether we like or hate them (or nuclear) is irrelevant. Those are the facts, and realistically there’s no way to achieve a greener, electrified future without reconsidering it. They are powerful, determined, and influential, and that will turn a lot of people, politicians, and the media into nuclear.
US: the present and future of power production
The drop in uranium prices brought by Kazakhstan (over 40% of worldwide supply) and other state-owned miners during the last 20 years contributed to disincentivized production and investment in western countries. The largest uranium mine in the world (McArthur River in Canada) was shut down and put on “maintenance” in 2018. Activities are still suspended.
Since 2015 U.S. has to import 99% of its yellowcake supply (uranium concentrate). The entire American navy fleet runs on nuclear. Almost 1/4 of all 438 reactors in operation worldwide are on U.S. soil. The last unit built was inaugurated in 2016. Together, these facts don’t paint a very assuring picture, especially considering the most prominent producers aren’t exactly friendly towards America. Not everything is dark, though.
A few years ago, the Nuclear Fuel Commission of the Department Of Energy (D.O.E.) came up with a study and proposal to reverse this scenario and revive the U.S. uranium industry. It’s a bipartisan-supported initiative, something unseen since president Eisenhower advanced the atomic program and brought the U.S. to nuclear technology leadership in the 1950s.
But it’s still a 10-year program. If everything goes according to plan and the policies and programs (and prices) spark the uranium market and new reactors are commissioned, etc., it may take a generation for the U.S. to become independent again.
What about fossils?
Meanwhile, the fossil industry is seeing the writing on the wall. There are a lot of uncertainty, changes, new policies. Barriers to development and extraction are surging in many countries. Consumer pressure builds. No one is in the business to lose money or take crazy risks. Who in their right mind would swim against the tide?
COVID-19 and the Green New Deal affected oil production and consumption patterns worldwide and wreaked havoc in the shale industry. Oil price volatility and the whole petrodollar debacle contribute to making things murky. If investment slows down and new fronts start to back-step or halt, just that could impact the energy sector and bring unknown consequences.
Fossils will keep dominating the energy supply for the foreseeable future but should lose share to nuclear and renewables in the energy and power mixes. How the industry and the market will react to that, how their responses will affect the balance of mixes, and what effects all this will bring for society and individuals is impossible to predict.
I hope it has become clear this is not a radical shift but something more subtle. Yet energy is such a big thing for civilization that even tiny movements can have vast effects and consequences nonetheless. Any change implies a period of uncertainties and, potentially, instabilities and disruptions, so we must be ready.
How can you prep for this?
First, understand this is a structural change. I emphasized electricity and the U.S. situation because this is an American blog with a large American audience. The U.S.A. is currently the second-largest producer/consumer in the world (China – you guessed it – is first). But the issue is global, and everywhere else, the situation is not too different. Maybe better in some places, worse in others. Just remember: everything is connected. Each country will face its own challenges, but troubles in one area can spread and affect others.
Second, even if things unfold differently than conveyed here (or elsewhere), don’t think for a moment things are solid and stable in the energy field (pun intended). Think about Texas. The question is not if, but when, how, and what will happen. That is perhaps the main takeaway.
Third, there’s still time to act. Becoming even slightly less dependent on the system may help. A simple backup kit (generation+storage) is enough for emergencies and short, temporary power interruptions. Joining the decentralized power revolution is a more effective, definitive defense against price shocks and long-term outages. Either way, there are tons of options for capacity, size, type, cost, ease of operation, etc.
- Splitting between energy (heating, cooking, mobility) and power (electricity) and reassessing needs can be an excellent strategy to reduce the dependency on one fuel and allow the use of multiple sources. Become more knowledgeable, more creative, test and play to break from convention to be more versatile and flexible.
- Short-term/emergency are low-capacity, low-complexity kits aimed at providing just enough juice to power up “survival items” during short grid-downs for an individual or small family. Think of an Energy E.D.C. comprised of simple, reliable, and inexpensive items: a compact solar panel (around 25W/25% efficiency) and portable battery banks (20.000mAh or more) to keep smartphones, flashlights, G.P.S.’ (lighting, communication, information, and orientation) going. Rechargeable A.A. and A.A.A. size batteries and step-up converters (5 to 12V, for instance) can add versatility. Don’t forget cables and connections. Campers and outdoor people everywhere use such systems, so they’re proven to work. Downsides are limited capacity, longer charging times, and if there’s no sun, there’s no power. Ideally, each member should have his own kit.
- Mid-to-long term systems require heavier and more sophisticated equipment to power life support systems, refrigeration, lighting, tooling, appliances, and others for more extended periods (weeks or months). These are more expensive and complex devices that can run on fuel (diesel, gasoline, natural gas, propane, etc.) or solar, wind, mechanical and hydro. Many modern systems work in tandem with battery banks of various capacities with advanced power management. They can be portable (transported in a car or truck) or fixed. Semi-portables, especially solar, are excellent for people living in smaller houses or apartments or wherever fuel can’t be used or stored, and noise and fumes are no Bueno. Fixed systems are also modular and can be expanded over time. But they require space and specialized installation, maintenance, and support.
- Research the options for capacity, installation, and operation. Consider your present and future necessities to avoid falling short or over-expending. Check different brands, specifications, and reputations. Sharing the investment in bigger systems can turn viable and be cost-effective.
One last piece of advice: always opt for quality items from reputable brands. Cheap is crap, and crap leaves us in the dark when we most need it.
What are your plans?
Have you thought about what you’ll do if this crisis comes to fruition? Where can you cut back usage? What can you do manually? What workarounds or alternative technology will you use? Let’s talk about it in the comments.
Fabian Ommar is a 50-year-old middle-class worker living in São Paulo, Brazil. Far from being the super-tactical or highly trained military survivor type, he is the average joe who since his youth has been involved with self-reliance and outdoor activities and the practical side of balancing life between a big city and rural/wilderness settings. Since the 2008 world economic crisis, he has been training and helping others in his area to become better prepared for the “constant, slow-burning SHTF” of living in a 3rd world country.
Fabian’s ebook, Street Survivalism: A Practical Training Guide To Life In The City, is a practical training method for common city dwellers based on the lifestyle of the homeless (real-life survivors) to be more psychologically, mentally, and physically prepared to deal with the harsh reality of the streets during normal or difficult times.
You can follow Fabian on Instagram @stoicsurvivor