Fossil Fuels—the Engine of Prosperity

FOSSIL FUELS REMAIN the dominant source of energy in the United States and throughout the world because they remain superior to current alternatives. Many energy policies now championed or in the early stages of implementation, however, envision a rapid transition to renewables as if all energy sources were of equal value and thus readily interchangeable. Whether based on naiveté or fact-free political rhetoric, claims made by President Obama and senior federal officials that renewable energy can supplant fossil fuels within the next decade or two are not supportable.

California intends—officially, at least—to derive 35 percent of its energy from renewable sources by 2020. The state’s energy policymakers might wish to chat with a physicist or with the number crunchers at the Department of Energy. Attempts to use the power of government and billions of taxpayer dollars to force a rapid energy transition from fossil fuels to inherently inferior renewable energy risks inestimable economic damage, societal regression, and human suffering.

Fossil Fuels Are Superior to Renewable Energy in Many, Many Ways

The animus against fossil fuels and supposed “dirty carbon pollution,” however, is widespread. Policies to eliminate fossil fuels obsess the mainstream media and the cultural elite. “Decarbonizing” the world is a core issue among left-of-center policymakers. President Obama refers to oil, coal, and natural gas as the fuels of the past as he extols wind and solar as the power of the future. In his first campaign for the presidency, he promised that “the country that faced down the tyranny of fascism and communism is now called to challenge the tyranny of oil.” The Environmental Protection Agency is implementing the play book of the Beyond Coal campaign in heavy-handed regulation and is keeping the Sierra Club’s playbook for Beyond Natural Gas handy.

But, this incendiary rhetoric, now backed with government authority, has not measurably altered the consumption of fossil fuels. The Energy Information Administration’s (EIA) Energy Outlook 2014 shows that the source of 82 percent of the 106 quadrillion BTU’s annually consumed in the United States remains fossil fuel. In its current Outlook, the EIA projects that the dominant role of fossil fuels will persist through 2040 with little change except for moderately increased use of natural gas. After aggressive deployment in the last decade, wind and solar energy accounted for less than 2 percent of energy consumption in 2012. Solar-generated electricity, so highly touted by President Obama, provided two-tenths of 1 percent in 2013.

After more than three decades of global warming alarmism and billions showered on renewable energy, fossils fuels remain supreme because consumers prefer them. Uranium may be the most energy-dense and efficient fuel, but intense public resistance has long prevented widespread construction of nuclear generation in the United States. Replacement of the generating capacity of the U.S. fleet of fossil-fuel-fired power plants would mean building over a thousand nuclear power plants.

Energy-dense, power-dense, abundant, affordable, controllable, reliable, versatile, portable, scalable, and storable—fossil fuels have far more energy advantages than any other energy source at this point in time. Human history is a record of constant human innovation that has improved the human condition. Who knows what energy sources and technologies of the future may trump the energy benefits of fossil fuels?

Energy and Power Density. Matt Ridley, author of The Rational Optimist: How Prosperity Evolves, notes that the secret of the Industrial Revolution was the shift from current solar power to the far more concentrated solar power stored in fossil fuels. Formed by millions of years of compression and heat in the earth, fossil fuels are packed with more energy than woody plants—the product of recent photosynthesis.

Physicists define energy density simply as the quantity of energy that can be contained in a given unit of weight, volume, area, or mass. The energy density of dry wood is approximately 17 megajoules per kilogram (MJ/kg). Refined petroleum has a density of 42 MJ/kg, natural gas has a density of 35 MJ/kg, and the energy density of coal is roughly 24 MJ/kg.

The power density of a marginal oil well or natural gas well is over 20 times higher than that of wind. Wind and solar require expensive inputs such as large expanses of land and long transmission lines.

The higher density means that less work is involved in extraction, transport, and storage of a fuel. High-density energy expanded the range of technologies that were possible. The scores of technological innovations that followed Watt’s steam engine (powered first by coal, then also by oil and natural gas) would not have happened if wood were the only fuel available, no matter how large the supply of timber.

Power density is even more revealing. The superior power density of fossil fuels exposes the inherent weakness of currently favored renewable energy sources from wind, solar, and biomass. Energy sources with lower power density typically utilize too much material or land area to supply power at a competitive price or at the scale necessary to supply a large city or industry 24 hours a day, seven days a week.

If power is defined as the rate at which work is done, power density is defined as the rate of the energy flow that can be generated from a given unit of volume, mass, or area. Power density is measured in Watts per square meter (W/m2).

The power density of a marginal oil well (27 W/m2) or natural gas well (28 W/m2) is over 20 times higher than that of wind (1.2 W/m2). Wind and solar require expensive inputs such as large expanses of land and long transmission lines. A good example is the Competitive Renewable Energy Zones in Texas. This project involves construction of the world’s longest system of transmission lines dedicated to renewable energy. This recently completed project built over 3,500 miles of transmission lines to connect the wind farms in the far western portion of the state to the population centers along Interstate 35, a distance at some points of more than 600 miles. The total cost is around $7 billion and will be spread across all ratepayers under Texas law.

Inputs of this magnitude, coupled with the inherent intermittency of wind and solar, may undermine the viability of huge renewable solar installations recently completed or under construction thanks to huge grants and loan guarantees from the federal government.

Fossil Fuel Is Abundant. Less than 10 years ago, rising oil and natural gas prices—a result of soaring demand from developing giants like China and India coupled with political unrest in the Middle East—spread concern about declining global reserves. Yet within a few short years, both the U.S. outlook and the global outlook reversed from increasing scarcity to rapidly increasing abundance. Developed by private-sector energy entrepreneurs in Texas, innovative technologies such as hydraulic fracturing, horizontal drilling, and seismic imaging have unlocked the massive deposits of oil and natural gas in shale rock. While U.S. production now dominates the increasing supply of oil and natural gas from shale formations, the same geology occurs throughout the world.

In 2007, the United States imported almost 60 percent of the petroleum it needed. Higher domestic production has now dramatically reduced imports and increased exports of petroleum products. According to the EIA, U.S. imports of foreign oil declined from 60 percent of domestic consumption in 2005 to less than 40 percent of domestic consumption in 2012. Crude oil imports fell 9 percent in 2013, while exports of petroleum products rose by 11 percent. Domestic oil production continues to increase so rapidly that oil imports are declining faster than EIA can meaningfully estimate.

Natural gas has experienced a similar explosion in supply. In 2007, conventional wisdom held that the natural gas supply in the United States would continue to dwindle. Import terminals were planned for construction on all the U.S. coasts. Through fracking (using hydraulic pressure to fracture deep-rock formations) natural gas production has soared. Those import terminals are now being retrofitted for exports of natural gas. And the United States has now passed Russia as the world’s largest natural gas producer. (China has the world’s biggest reserves of shale gas but is now in the early stages of production.)

The world’s current supply of hydrocarbons from oil and natural gas can meet demand on the basis of current technology for several centuries.

Don’t be misled by some of the metrics used to quantify the global or domestic energy supply. The Department of Energy’s most recent estimate of “proven reserves” in the United States is only 25.2 billion barrels of oil. EIA defines “proven reserves” as known oil resources producible with government consent using current technology and commercial terms. This number includes neither the vast store of oil now produced from shale nor other unconventional resources, access to which is blocked by the government prohibition. When “technically recoverable resources” are added to the proven reserves, the U.S. supply increases to the equivalent of 2.2 trillion barrels. The total exceeds 2.5 trillion when all resources are considered. No one really knows how much oil, natural gas, or coal under the earth is producible. The recent shale revolution justifies an extremely optimistic outlook.

The world is also blessed with abundant coal, of which the United States—known as the Saudi Arabia of coal—has the largest reserves. The United States has 261 billion tons of coal in proven reserves. In the lower 48 states, the United States has 486 billion tons of coal in the demonstrated reserve base. This coal is enough to continue current rates of consumption for 485 years.

Fossil Fuel Is Affordable. Perhaps the best measure of the affordability of fossil fuels is the vast volumes of energy consumed by all income groups in the United States and other prosperous countries. Gasoline prices, though considerably higher than 10 years ago, are tolerable for all but the lowest income households. Overall energy prices are rising in the United States, in part as a result of the high costs of the EPA’s aggressive regulation. In 2012, the median-income family spent 21 percent of its after-tax income on energy, a slightly higher portion of income than it spent on food.

Countries that have aggressively supplanted fossil fuels with renewables in the last 10 years or less have incurred steep increase in energy prices. Germany, Spain, Denmark, and Great Britain offer examples.

For the first time since the Industrial Revolution, energy regression and the human deprivation it causes is a policy choice in the most affluent nations of the world.

Electricity is viewed as a luxury good for more and more German households. In 2013, Der Spiegel reported that 500,000 to 600,000 families were cut off from electricity because residents could not pay electric bills that are three times higher than average bills in the United States.

On January 21, 2014, Germany’s energy minister Sigmar Gabriel told a conference in Berlin that skyrocketing energy costs risk “dramatic deindustrialization” in Germany, one of the world’s most highly industrialized countries. Germany now imports not-so-low-carbon wood pellets made in the United States for heating and cooking fuel. For the first time since the Industrial Revolution, energy regression and the human deprivation it causes is a policy choice in the most affluent nations of the world. The policies may not now hurt the affluent but they already hurt middle- and low-income families.

Fossil Fuel Is Reliable and Controllable. In contrast to renewable energy resources from wind, solar, and biomass, man can control access to and conversion of the energy held in fossil fuels. No machine or person can control when the wind blows or at what velocity. No one can control how much of the radiant heat of the sun will hit the earth on a given day or hour. Annual weather and the growing cycle control the timing and quality of harvest of renewable biomass like corn for ethanol.

The inherent intermittency of wind and solar is a major step backward for electricity-dependent societies. Even on clear days, the solar maximum period—when photo voltaic generation is possible—lasts only six hours—from 9 a.m. to 3 p.m.

Wind conditions not only follow seasonal shifts, they can also change in an instant. Wind speeds too high or too low preclude generation. The over 12,000 megawatts of installed wind capacity in Texas generates the most electricity when Texas least needs it. West Texas, where most of the wind farms have been built, has little wind during the long, hot summer—the period of peak electric demand for the state.

Wind and solar are what operators of electric grids call non-dispatchable technologies. Since electric load on the grid must be continuously balanced or the grid will go into a tailspin, generating units whose output can be varied to meet fluctuating demand in real time are necessary to provide constant reliability to modern systems of electric generation and transmission. Being non-dispatchable, electric generation from solar and wind technologies can never provide reliability. In contrast, coal-fired and natural-gas-fired (and to a certain extent, nuclear) electric generation can reliably meet peak demand and can be controlled to follow variations in demand in real time.

The intermittency of wind and solar also makes it wastefully parasitic on generation provided by fossil fuels. Because wind and solar electric output can change in an instant, a back-up generating source is needed. Natural gas-based generation is particularly suited for this role. When a wind or solar facility is actually generating electricity, a natural gas plant, in an operational mode called “spinning reserves,” may be idling so that it can rapidly ramp up to give the grid stability. The intermittency of renewables is one reason for their much higher cost.

Fossil Fuel Is Portable and Scalable. Fossil fuels are relatively easy to move around. Over a century, the United States has developed an elaborate distribution system for transporting oil, natural gas, and coal. Whether through pipelines, transmission lines, rail, or truck, these fuels or the power they generate can be moved to where they are in demand. Wind and solar are fixed in one place, typically occupying a large tract of property and usually at a significant distance from demand. No one has yet invented a suitable battery to store and later use the power generated by wind and sunshine.

Transmission of the electricity generated by renewables usually involves long lines connecting generation at a great distance from the end user. Long power lines not only add cost but also can lose 10 percent or more of the original electricity generation.

One of fossil fuels’ most beneficial attributes is its capacity to expand to meet demand on a vast scale. Indeed, cost declines and efficiency rises when fossil fuels are deployed on a larger scale. Renewables lack this elasticity and efficiency because of their intermittency. Wind- and solar-generated power has never been used at scale.

Should We Forgo Prosperity?

Indur M. Goklany, author of The Improving State of the World, writes:

Notwithstanding their flaws the fossil fuel-dependent technologies that stretched living nature’s productivity and displaced some of its products not only permitted humanity to escape the Malthusian vise but saved nature itself from being overwhelmed by humanity’s demands.

As a necessary condition of the Industrial Revolution, the vast store of concentrated energy in fossil fuels unleashed sustained productivity and economic growth which in turn led to monumental improvements in human living conditions as measured by life expectancy, income per capita, caloric intake, clothing, shelter, and fuels. And the greatest beneficiaries of this energy revolution known as the Industrial Revolution were average workers and the most impoverished. The increasing emission of man-made CO2 is tightly correlated with this monumental achievement.

The Climate Science Isn’t Settled. Yet, senior leaders of the most highly developed nations and the non-governmental organizations surrounding the United Nations Environmental Program decry the CO2 emissions associated with fossil fuels as pollution so dangerous that it will overpower the physical dynamics of earth’s climate system. Carbon dioxide, the gas that makes life possible on the earth and naturally fertilizes plant growth, is now characterized by U.S. Secretary of State John Kerry as “the most fearsome of weapons of mass destruction.” After 40 years of such vilification, fossil fuels still supply 80 percent to 85 percent of the world’s energy use because—at this point in time—these fuels are superior on many levels to the current alternatives.

Predictions of catastrophic man-made global warming have gained global political traction over the last 25 years. Recently the warnings have become shriller—even as evidence for dangerous warming weakens. The United Nation’s Inter-Governmental Panel on Climate Change (IPCC) says that global emissions of CO2 must be reduced by at least 85 percent “to prevent dangerous interference with the climate system.” This policy finding is tantamount to recommending the elimination of fossil fuel use without energy alternatives fully comparable or superior to fossil fuels.

Britain—the cradle of the Industrial Revolution—recently announced that one in four households live in energy poverty. The Daily Mail warns that 24,000 elderly may die this winter because they cannot afford to heat their homes.

Mandates to force an abrupt energy transition from fossil fuels to renewable sources are naïve and fraught with peril for highly industrialized economies. As this article has detailed, energy sources are not necessarily interchangeable. In energy density, abundance, reliability, versatility, and other advantages, fossil fuels are far superior to wind, solar, and biomass.

Evidence of the damage rapidly following a government-forced transition to renewable energy emerges in Germany, one of the most highly industrialized countries in the world. German officials sound the alarms of “dramatic deindustrialization” while the media reports that hundreds of thousands of German homes now are without electricity because the cost is unaffordable. Likewise, Britain—the cradle of the Industrial Revolution—recently announced that one in four households live in energy poverty. The Daily Mail warns that 24,000 elderly may die this winter because they cannot afford to heat their homes. That such a regression from modern living standards could occur so rapidly in these highly developed countries is a stunning turn of events that U.S. policymakers would be wise to absorb.

Relying on the vast store of dense, versatile energy in fossil fuels, the economic growth begun in the Industrial Revolution still offers the promise of an end to abject poverty. Policies that could undermine a necessary condition of mankind’s greatest energy advance, surely, must rest on the most robust scientific justification. The IPCC’s views of the science, however, founded on assumptions and speculative models, is increasingly contradicted by empirical evidence and thus remains unsettled. The growing doubt about catastrophic global warming is illustrated by recent commentary from The Economist, formerly a staunch believer in man-made climate change: “If climate scientists were credit rating agencies, climate sensitivity [to increased CO2] would now be on negative watch.”

The IPCC claims that there is a 95 percent certainty that human activity is causing climate calamity, but that assertion is more like the dogmatism of ideologues and religious fanatics than a scientific conclusion. The claim of 95 percent confidence is pulled from thin air without any statistical analysis. Doctrinaire assertions of certainty have no place within the genuine scientific method. Man-made catastrophic global warming is a theory whose validity, like all theories, must be corroborated by the evidence of measured observation.

New research on solar activity, natural variability, sea levels, Antarctic sea ice, and extreme weather weakens the credibility of the IPCC’s key assumptions about how the earth’s climate works. The 16-year lull in warming temperatures indicates that increasing CO2 may not be dominating the climate to the extent that the IPCC assumes. Research on the natural climatic forces such as the sun is generally marginalized throughout three decades of IPCC reports. Although 99.98 percent of the energy in the earth’s atmospheric system derives from the sun, solar activity plays almost no role in the climate models cited by the IPCC. This work is not the quality of science that could justify supplanting the energy wellsprings of mankind’s greatest advances!

Robust, empirical scientific research on the natural forces and natural variability of climate needs to be conducted before the industrialized nations of the world prematurely force an abrupt switch from fossil fuels to inferior energy sources. Research on the role of increased concentrations of man-made CO2 should also continue but outside the highly politicized IPCC and the United Nations.

Major Improvements in Human Well-Being Since Fossil Fuels Became Dominant

Widely used indicators of living standards show a dramatic increase in life expectancy, income per capita, population, and caloric intake per person since fossil fuel supplanted woody plants as the main source of energy for human beings.

Life expectancy was 20 to 25 years for most of human history (largely as a result of high rates of infant and childhood mortality). During the middle of the 18th century, life expectancy in England was 35 years, much higher than in other countries. From that point, the world began to catch up. By 2009, life expectancy around the world was 69 years, and in the United States it was 79 years.

The world’s population increased from 760 million people in 1750 to 6.8 billion people in 2009. Over the same period, emissions of CO2 from burning fossil fuel increased from 3 million metric tons to 8.4 billion metric tons. Contrary to Thomas Malthus’s and Paul Ehrlich’s predictions of mass starvation, income and nutrition improved.

From 1961 to 2007, world population doubled from 3.1 billion to 6.7 billion. But modern agricultural methods using fossil fuel-based fertilizer and other energy-rich inputs achieved 2.5 times more food per acre than in 1961. Higher atmospheric levels of CO2 as a result of fossil fuel likely increased agricultural yield by more than 25 percent.

Over the past 250 years, global income per capita has risen 11-fold from $640 per year to $7,300 per year. Scores of studies have shown that the major measures of the quality of human life (nutrition, income, education, lifespan, health, and that ineffable measure known as happiness) grow as income rises.

Prosperity certainly does not guarantee happiness, but eliminating chronic hunger is a good start!

Regress or Progress? There are many profound human benefits made possible by the rich energy stored in fossil fuels. Although first harnessed not much more than 200 years ago, the energy riches on which economic growth and contemporary lifestyles now depend were not fully accessible until after World War II. Without ever living in an energy-scarce world, the living generations of prosperous countries assume a massive, affordable supply of energy at their fingertips.

Energy policy sits at a crossroads. Will we eschew the high energy use made possible by fossil fuels to lower a risk of theoretically predicted global warming? Would voters choose an energy regression to less productive, efficient, comfortable, and healthy living standards? Multiple polls say: No way!

The vast human improvements flowing from the Industrial Revolution are still occurring in market-driven economies under limited governments that uphold property rights and contractual obligations. Why would societies suppress fossil fuels—a necessary condition of the increasing efficiency inherent in productive economies and continually improving living standards? As Thomas Macaulay commented in the early days of Industrial Revolution, “On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?”

Matt Ridley says it best:

Non-renewable resources such as coal [natural gas and oil] are sufficiently abundant to allow an expansion of both economic activity and population to the point where they can generate sustainable wealth for all the people of the planet without hitting a Malthusian ceiling, and can then hand the baton to some other form of energy. The blinding brightness of this realization still amazes me: we can build a civilization in which everybody lives like the Sun King, because everybody is served by (and serves) a thousand servants, each of whose service is amplified by extraordinary amounts of inanimate energy

Ms. White is a distinguished Senior Fellow-in-Residence and Director of the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation. This article is adapted from her longer paper, “Fossil Fuels: The Moral Case,” published by the Texas Public Policy Foundation in June 2014.