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The sorts of 'babies' who don the oil worker’s rig and get drilling respond to financial compulsions, not to presidential prejudice and ignorance
Most people are likely to be under the impression that US President Donald Trump is poised to blow up the world’s plans for combating climate change, with his elevation of the crude exhortation, "drill, baby, drill," as energy policy.
Don’t hold your breath waiting for that big bang. Trump would be left struggling to explain why he has no major impact on the world’s ongoing transition away from fossil fuels.
The sorts of babies who don the oil worker’s rig and get drilling respond to economics, not to presidential prejudice and ignorance.
Lower demand
It is not in the interest of the American oil and gas industry to step up production just because they can. The US is already the world’s largest producer of oil in the world, and the top exporter of liquefied natural gas (LNG).
The weakness of global growth lowers demand for oil and gas. Receding winter lowers the demand for energy. When the wars in Gaza and Ukraine end, fresh flows of oil and gas would join the global supply and depress prices further.
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US oil and gas output owes its scale to the shale fracking revolution. Shale oil is viable only above a break-even price, averaging close to $50 a barrel. Wantonly increasing oil and gas output would kill the American shale oil industry.
China in the picture
The biggest importer of LNG in the world is China. Direct imports of US LNG into China would add unnecessary layers of transportation cost.
Increased American LNG supplies would depress prices for all LNG exports. China might actually be importing cheaper LNG from Qatar or Australia but that lower price would result from added supplies from the US, which could substitute, for Europeans, their LNG imports from the Middle East, releasing Middle Eastern LNG for consumption in China.
Does Trump wish to lower the cost for China, of closing its economic, technological and military gap with the US?
The Trump strategy
Most Americans are probably unaware of their country’s status as an oil producer bigger than Saudi Arabia or Russia, or as an LNG exporter bigger than Qatar.
When they now discover this sign of greatness, their leader would tell them that this is the result of his new national energy emergency and call to babies to drill, gurgle, and drill.
And they would believe him, and also that he is making their country great again. We, in India, are familiar with this phenomenon of transferred glory.
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The scenario above discusses near-term prospects. What about the implications of the Trump strategy for the structural shift in energy that climate mitigation calls for? That shift is underway, and insulated from Trumpian contamination by technological change and consequent lowering of the cost of renewable energy.
China and EV technology
Europe is converting the North Sea (named from a British perspective) into a massive zone of offshore wind energy, all littoral states chipping in.
The Chinese have innovated so much in solar panels and solar modules that the direct cost of producing solar power is distinctly lower than the cost of power generation via fossil fuels. It is the cost of intermittency that makes renewables expensive, and that is being addressed as well.
Hydrocarbons are burnt as fuel in transport. Apart from in aviation and long-distance shipping, electric power is replacing fossil fuels.
Chinese innovation in electric-vehicle (EV) and battery technology has made EVs cheap enough for adoption in those parts of the world without an entrenched automobile industry to be protected via high tariffs.
Renewable power
The sun shines only for a few hours, and how strong the wind would blow is variable. So, power from renewable sources is intermittent.
When renewable power is not available, the grid has to draw power from traditional fossil fuel generation plants. This means that even when the grid is flooded with renewable power, the power utility has to pay fossil-fuel plants to stand by.
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In other words, the cost of renewable power is the cost of pure renewable power generation plus the availability charge for fossil-fuel plants. There is, too, the added cost of integrating variable renewable power into the grid without disturbing grid frequency.
All this makes renewable power from the grid way more costly than the much-publicised low cost of renewable power at the site of generation.
The options
There are many ways to solve renewable power’s intermittency challenge. Essentially, these are different ways of storing the power generated by renewable sources.
You could use the power to pump water up to a height, from where you could run the water down later to turn a turbine and generate power.
You could use the power to electrolyse water to generate hydrogen, which, thanks to no fossil energy being used in its generation, qualifies as green hydrogen. Hydrogen can convert to electricity in a fuel cell or be directly burnt to produce energy.
Another way to produce hydrogen is to heat natural gas in the presence of certain catalysts, the process being called pyrolysis, producing usable pure carbon as a byproduct.
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People also talk of storing the renewable energy that is produced in huge batteries. The hunt for battery materials such a form of storage would unleash would ruin the environment, create social conflict and destabilise many underdeveloped countries. Battery storage is not a desirable solution.
However, if sufficient quantities of renewable power can be generated and stored, thermal power utilities can be shut down altogether. We are far away from that massive scale of generation and storage, and while progressing towards that goal, another way to produce energy could make all this superfluous.
Fusion reactors
Nuclear power from fusion has been hailed as the miracle source of cheap power that is just a decade away – and always will remain a decade away, add cynics. That is changing.
Over 50 startups, with a cumulative $5.5 billion in venture funding, are developing viable fusion reactors. A company called Commonwealth Fusion Systems has bought land and tied up with a Virginia, US-based power utility to produce fusion power by the early 2030s.
The big shift in fusion research is Artificial Intelligence (AI). Based on data on past fluctuations, AI can forecast the likely shape of instability in the pulsating superhot plasma, the mass of ionized gas in which fusion takes place, and constantly recalibrate the positioning of the magnetic field required to contain and hold the plasma.
Even before nuclear fusion becomes a reliable workhorse of energy generation, the more conventional nuclear fission generation plants are likely to turn safer and cheaper, thanks to new modular design and construction. Small modular reactor (SMR) components can be produced in factories, and SMRs can be assembled on site, relatively fast, lowering the cost.
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Trump and his supporters
The viable solution to climate change, in any case, comes from removing carbon dioxide from the atmosphere, in addition to reducing additional emissions.
Giant carbon dioxide removal (CDR) plants are operating in the US and elsewhere, a few to generate carbon credits for sale and others to use the gas to pump into depleted oil wells to force more oil out.
But better uses are being invented on an ongoing basis, ranging from conversion into synthetic aviation fuel to using the captured CO2 as the starting molecule for producing the entire range of petrochemicals humanity uses. In university experiments, CO2 has been split into usable forms of carbon, leaving hydrogen or ammonia, which can be burned as carbon-free fuels.
Trump cannot control or stop these advances. He can only fool his ignorant mass of supporters.(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the article are of the author and do not necessarily reflect the views of The Federal.)