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Energy: future challenges and uncertainties

Our research (presented in more detail in our May 2021 bulletin) on realistic energy futures to feed a world economy of say 5-7 billion people over the next 20 years (i.e. this figure shows the growing ‘urbanised’ part of a growing world population), eliminating the delusional dreams of generalised degrowth to which neither the Indians, nor the Chinese or the Africans, … will of course consent, suggests in the best case the following evolution :

. a decarbonisation that prioritises a real reduction in coal, a stabilisation of oil (which is still a long way off) and a measured increase in gas (to compensate for the first two)

. a diversification of standardised energy sources thanks to the deployment of electrical cable networks, connected by artificial intelligence, regulating loads from all types of sources: hydroelectric, wind, solar, nuclear, thermal power stations, etc.

. an electric-hydrogen linkage to resolve the issues of storage and off-grid power supply, while resolving the thorny problem of battery pollution.

. energy savings at all stages of the extraction-transformation-distribution-consumption-recycling/disposal cycle (and ideally a reduction in consumption in line with inflation).

It is likely that in 20 years’ time such a model will be in place. But in the meantime, the following points are still missing from the picture:

. recourse to gas: complicated because of geopolitical sensitivity (remember that among the largest gas producers are Iran, Russia and China, even if the United States is now the world’s largest producer of LNG) [1]

. nuclear power still in crisis: having lost at least 10 years of research and serious investment (small units, fusion, thorium… nothing is really ready)

. the gigantic size and cost of the transition to renewables

. hydrogen abandoned for too long despite the strategic choices made in this direction by the States in the 1990s (the last decade of scientific rationality) in favour of the logic of batteries, which are undoubtedly more lucrative for certain segments of the economy – let’s not forget that one of the issues at stake in the transition was that the next model should still finance the masters of the old one (energy companies of all kinds, States): miracle solutions, thank you for waiting!

2021-2025: a hole into which whole sections of the planet will fall 

This synthetic vision of the future paths currently being explored – and of the shadows in the picture – reveals a period of at least 5 years during which the energy crisis cannot be resolved other than by huge shocks of reduction of economic activity in certain regions – which the pandemic or other catastrophes will induce. The reason we say “at least” 5 years is that these shocks to economies will prevent them from investing in their transition, thus prolonging the period.

This 5-year period we have identified runs through many of our research projects:

. central bank digital currencies: horizon 2025

. significant growth in iron ore deposits (see our article on Simandou below): 2026

. answers from ITER on the feasibility of energy production by fusion: 2025

. reinventing the mechanisms of modern and democratic governance: 2024-2025[2]

. significant level of 5G connections (3.5 billion): 2025

. bringing thorium power plants into production: 2025

. corporate restructuring/digitalisation: 2025 (best case)

The terrible crises being provoked by the absence of these infrastructures and technologies necessary for the indispensable systemic transition will lead our team to anticipate that this 5-year gap could in fact turn into a 20-year period that historians will aggregate to the last decade, i.e. 30 years of Very Great Global Systemic Crisis…

[…]

An era of shortages has begun… 

In the current state of the techno-economy, there will not be enough energy and raw materials to feed the dreams of prosperity cherished by the different regions of the world.

The environmental project is the path that must lead to a new techno-economic state that makes global prosperity compatible with the reality of available resources. But this path cannot be taken outside of a sound framework of international cooperation – which has yet to be adapted to the new geopolitical configuration.

In a world at war, the process of jointly inventing the future stops, the big muscle contest begins, the race for resources starts and with it an era of shortages and thus of hoarding and predation.

The US economy has barely started up again when it is already paying the price for this new reality: petrol is running out in the stations of the world’s largest oil producer,[3] power cuts are expected this summer,[4] food for animals and chicken are missing from the shelves,[5] … not directly related to Covid, water cuts are expected in Nevada and Arizona for the first time.[6]

In Colombia, oil and food are missing.[7]

In Ireland too, food is missing.[8]

Microchips,[9] chicken, wood, cars, ketchup, chlorine are already missing from western shelves.[10]

The European automotive sector is suffering from a shortage of microchips and is abandoning the installation of certain technological options in its vehicles.[11]

India and all middle- and low-income countries are short of medical oxygen.[12]

The Japanese have just published a guide for energy producers to avoid the risk of blackouts.[13]

England has been hit by a shortage of cement,[14] which is hurting the entire construction industry.[15]

While China is reassuring about the availability of steel,[16] London is yet quite concerned.[17] As for American stainless steel, it is becoming rare.[18]

On the Chinese side, geopolitical tensions are rising threats to food security.[19]

… And this is only the beginning. What will we use to fuel the recovery?

Two more aggravating factors: 1/ The era of shortages will go hand in hand with the era of stocks, where the most powerful (companies, countries, regions – which will probably not be the ones we hope for) will get their hands on the available resources and goods before the others, further widening the wealth gap. 2/ It will also aggravate the enormous anger of people who are ill-informed and not involved in decision-making, making the right solutions increasingly out of touch.

Thus a fairly accurate picture of the short-term future is formed… He who sows the wind reaps the storm.

____________________

[1]  Source: Wikipedia

[2]  We noted in the last issue that Europe, the United States and China were all aiming to reform their governance by this time. Source: GEAB, 15/04/2021

[3]  Source: PBS, 13/05/2021

[4]  Source: Bloomberg, 13/05/2021

[5]  Source: Washington Post, 30/04/2021

[6]  Source: VOA, 17/04/2021

[7]  Source: BBC, 13/05/2021

[8]  Source: TRTWorld, 14/04/2021

[9]  The microchip crisis is already prompting manufacturers to ask their customers to change their supply model. End of just-in-time supply. Source: FT, 04/05/2021

[10]    Source: TheGuardian, 13/05/2021

[11]    Source: Automotive News Europe, 06/05/2021

[12]    Source: ReliefWeb, 11/05/2021

[13]    Source: ArgusMedia, 21/04/2021

[14]    Source: CemNet, 07/05/2021

[15]    Source: Building, 11/05/2021

[16]    Source: ChinaDaily, 12/05/2021

[17]    Source: ConstructionNews, 12/05/2021

[18]    Source: HellenicShippingNews, 04/05/2021

[19]    Source: SCMP, 27/04/2021

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