Oil - Final Thoughts

To summarise this focus section on oil I am just going to do a quick recap of the information I have looked at and make draw some conclusions about what part oil will play in supplying energy over the next few decades.

Opportunities for oil production 

• Increasing population growth and wealth means that the demand for energy is continuing to grow. Data from Allianz predicts that the global population will reach 9 billion by 2050. Furthermore, research by Stanford University predicts that global energy demand will continue to rise from 80 billion barrels of oil in 2020 to 100 billion barrels of oil in 2050 (Changing the World's Energy Systems, Stanford, 2012).  
• Developments in drilling technology allow oil companies to explore previously inaccessible reservoirs of oil. This includes deepwater locations such as in Asia and Arctic environments (Oil Developments, 2013 Summary). In addition, advancement in ground imaging are also really vital in locating previously unknown deposits (CGG, Seismic Overview). 

Threats to oil production

• Growth of other energy industries such as coal and development of new energy industries such as hydraulic fracking and renewables have increased competition for oil producers. A lot of research suggests that for many locations, outside of the OPEC countries, peak oil production occurred between 2000 and 2005. This is mainly because the price of an oil barrel tripled from $35 to over $100 making it less competitive (Kerr, Science, 2013).
• Increasing regulation of oil production also increases the price per barrel, further reducing the competitiveness of oil. Disasters such as the DeepWater Horizon and increasing public awareness of the threat to the environment in areas such as the Arctic mean that governments are looking to invest in other energy sources where possible (Huber, Economic Geography 2013). Emphasis on the "where possible"!

Conclusions...

Oil will continue to play a significant part in our energy supply over the next century, despite growing adverse public opinion and enthronement impacts. Improvements in drilling and seismic imaging will allow companies to tap previously inaccessible resources and governments will continue to support oil companies while the price remains competitive. I agree with the wealth of data that suggests that we have already reached peak oil production and that the increasing cost per barrel will be the sole determining factor in the demise of oil production.

Nuclear Power - Final Thoughts

To conclude my section on Nuclear Power I wanted to do a brief summary of the threats and opportunities it presents. More detail and references to relevant information on each aspect can be found in previous posts, this is just a quick conclusion!

Opportunities

• Reliable and continuous form of energy
• Ongoing research to improve the safety and efficiency of the process
• Offers energy security and independence for many countries
• Low carbon technology compared  to fossil fuels
• Public perception

Threats

• Very expensive technology and decommissioning costs
• Safe disposal of radioactive waste
• Risk of fallout after accidents or natural hazards
• Taking focus from renewable energy
• Public perception

I have deliberately put public perception in both opportunities and threats. A wealth of research suggests that a lot of the general public are very opposed to nuclear power, largely for concerns over safety. After disasters such as Fukushima and Chernobyl this isn't overly surprising (Macilwain, Nature, 2011). However, the ultimate challenge nuclear power has to overcome is the cost. A study by MIT in 2003 and again in 2009 showed that the cost of building a nuclear power plant had doubled in just five years from $2000/kW to $4000/kW (Du and Parsons, CEEPR, 2009). These units represent the price per kilowatt hour to build a new rector. The price of oil and gas power plants has also increased though not as rapidly. 

The increasing cost of nuclear reactors is set to increase due to material costs, safety improvements and uranium costs. Ultimately this increasing cost will eventually make nuclear power unprofitable as a energy source over the next 50-100 years (European Parliament Conference). 

My final thought, living in a country that never experiences devastating earthquakes it is difficult to imagine the reaction to the Fukushima Nuclear Power plant disaster. This week the UCL Institute for Risk and Disaster Reduction commemorated its work with Japan by hosting a symposium on the disaster with representatives from UCL and Tohoku University. Attending the symposium helped me understand this a little more and I wanted to finish with a map of the world showing nuclear power plants and seismic activity. The devastation after Fukushima really makes you question if nuclear power is worth it.

Worldwide nuclear power plants and earthquake zones - courtesy of MAPTD 2013

Blue dots - The location of 248 atomic energy plants, including numbers of reactors
Heatmap - Every earthquake after 1973 with a magnitude over 4.5. Around 173,000 in total

The Price of Power

The debate over energy prices has become increasingly heated over the last few days after the parliamentary committee so I wanted to just do a quick post about the situation. Understanding energy pricing is a really important aspect in understanding the energy market so this is a quick look at exactly how much we pay for our energy.

The Office for National Statistics has recently published a report on household expenditure. There are a couple of really important points I wanted to highlight from it:

• Household disposable income has flat lined for the last four years
• The proportion of household income spent on essentials has increased by almost half in a decade:  from 19.9% in 2003 to 27.3% in 2013
• The increase spent on gas and electricity in the same decade almost doubled: from 1.8% in 2003 to 3.1% in 2013. 

Source (ONS Parliamentary Briefing PDF October 2013)

This graph shows the relative yearly change in energy prices relative to the general price index. The 1980s saw a similar increase due to the recession but today’s relative prices are still higher. The volatility in heating oils (black line) over the last few decades can be linked to the oil shocks of the 70s. 

Source: DECC quarterly fuel prices table 2.1.1

Efforts such as the winter fuel allowance are incredibly important to support vulnerable people but there is no denying that the government will need to look further to help protect the consumer. It will be interesting how the politics around this develop and maybe the subject of another blog post soon!