“The IEA is a bit of a ‘wishcast’ not a forecast… You can’t just say, ‘Hey, we’re all going to run on these new energies.’ We need the time and the scale that it takes.” Deborah Byers, independent board member for energy transition & women in energy. (Source: URTeC)
The balance between hitting energy transition goals and maintaining energy security is delicate.
Demand for energy is rising, and with that comes the uncertainty of where the industry is headed next, said panelists during the opening plenary of the 2024 Unconventional Resources Technology Conference (URTeC) in Houston.
“Nobody knows. Anybody who tells you they know where the energy sector is going is either pulling your leg or selling you something,” Mark Finley, fellow in energy and global oil at Rice University’s Baker Institute, told the audience.
All jokes aside, this uncertainty within the industry shouldn’t come as a surprise. Demand for energy has only risen, and by 2050 the IEA estimates that demand could range from 25 MMbbl/d to 100 MMbbl/d. It’s not very easy to map out a business plan with a wide range like that.
But one thing panelists are certain about is that the world needs more energy, Finley said, and “no matter what the future is, we’re going to need to continue to invest in developing new oil and gas resources.”
Continued investment in oil and gas may seem counterintuitive, but alternative fuel sources come with their own set of problems.
“A lot of people come to me and say, ‘An energy transition is going to be great because they’ll reduce our dependence on oil and so we won’t have to worry about oil security,’” Finley said. “But my question is, ‘what new vulnerabilities might we be introducing?’”
Over the past 50 years, infrastructure and strategies have been developed to deal with oil security, such as public campaigns to conserve energy during crises. The IEA even has a treaty that requires its members to share information and energy supplies in case of an emergency, Finley said.
However, as the world transitions to new forms of energy, such as solar panels and wind turbines, a lack of infrastructure and experience to manage the risks associated with these technologies has been exposed—posing a challenge as the sector moves towards a more sustainable energy system.
“The IEA is a bit of a ‘wishcast,’ not a forecast. I think some of what’s crept into a lot of amazing work that that organization has done is sort of become overly aspirational … You can’t just say, ‘Hey, we’re all going to run on these new energies.’ We need the time and the scale that it takes,” Deborah Byers, independent board member for energy transition & women in energy, said to the audience at URTeC.
Historically, new technologies need to be cheaper and more convenient in order to scale up. Increasing the scale of new fuel requires more money, and if the energy alternative isn’t economical, then the transition is dead in the water.
It is important to consider cost and convenience factors when transitioning to new energy sources, said Byers. The best example of that is the electric vehicle.
“When Henry Ford put out the Model T, there was a competition between EVs (electric vehicles) and the ICE (internal combustion engine) vehicle, and it went on for a period,” Byers said. The earliest versions of the electric vehicle never achieved the success of the Model T for multiple reasons, Byers said.
“It was heavy, it had to be recharged, it was more expensive and less convenient—and we still have that barrier. I think EVs are great in the right context, but in this competition, it still is not cheaper and it’s frankly not more convenient.”
Despite priding itself on cutting edge technology, the energy industry is learning once again that change isn’t easy. Even the shale revolution, which was considered a significant change in the energy system by providing cheaper and more readily available resources, wasn’t truly revolutionary, Byers said, as the industry just moved from one fossil fuel in coal to another in oil and gas. The current energy transition is the real revolution, she said, as its flipping the industry on its head.
“I think in order to [successfully transition], we’re going to need a materials transformation,” Byers concluded. “I think that’s something to think about… something that’s lighter, something that’s super conductive and can be created out of some atomic combination that we haven’t thought about. That’s a real revolution.”
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