Overcoming The Gloom
K. Ramchand, managing director at one of India's biggest road builders, is doing something unusual to help dispel the gloom pervading much of the country's infrastructure sector today: bidding for new projects. Full Article
"Peak Everything" may mute Fukushima backlash
LONDON/OSLO (Reuters) - Political support may be holding for nuclear power and offshore oil, despite the Fukushima and Macondo disasters, as decision-makers confront climate change and dwindling domestic energy reserves.
A theory of "Peak Everything" suggests we are running short of vital assets such as clean water, carbon-free air, some minerals, fish stocks or the cheap fossil fuels which have powered the world economy and helped curb the price of food.
If you want to secure domestic supplies and curb carbon emissions too, then energy options are limited. And that fact has clearly dawned on governmnents.
Take for example the deadly blowout last year at BP's mile-deep Macondo well in the Gulf of Mexico, which all but stalled U.S. deep-water drilling.
Licensing there has now resumed, while other countries dimissed a deep-water freeze from the start, including Britain whose output is dwindling in the shallower North Sea.
It is early days to tell how the world will respond to the nuclear crisis caused by Japan's devastating earthquake and tsunami on March 11, but a bump in the road looks more plausible than a full stop.
U.S. President Barack Obama, for instance, last week laid out a plan to cut oil imports by a third -- diversifying towards renewable energies and also relying on nuclear.
Italy and China plan a one-year pause on new build for nuclear, and Japan plans a policy review. Underlying voter unease, German chancellor Angela Merkel's conservatives lost power in a regional stronghold last week, partly because of her party's pro-nuclear stance.
Overall, the anti-nuclear sentiment is likely to be less than after the more serious 1986 Chernobyl reactor explosion in the former Soviet Union. And the Three Mile Island accident in 1979 in the United States caused a severe backlash there.
"In the United States this is having much less of an impact, it's not just because it's overseas, it's because of climate change, that just changed the legitimacy of nuclear power in the U.S., the perception of it," said Harvard University's Robert Stavins.
Similarly there is broad support for offshore drilling even after the Gulf oil spill, Stavins added, given Republican concerns about energy security and Democrat desire to gather support for climate legislation.
Others say the driving force for offshore drilling, nuclear power and other resources is the simple need to provide for a population set to reach 9 billion by 2050 from 7 billion now.
"We could see some continuing support for nuclear, despite what is happening in Japan but it won't be fuelled by climate change concerns," said Emmanuel Fages, head of analysis of European energy at Societe Generale in Paris.
"It will be because of economic and energy pragmatism," he said. By that argument, nuclear power may be hit most by rising safety and insurance costs after Fukushima.
The International Energy Agency, the energy watchdog to industrialised countries, says global crude oil output peaked in 2006, meaning the world is now forced to glean oil from unconventional sources like oil sands and natural gas liquids.
Those alternatives, as well as renewable energy and nuclear power, are more expensive and would force the world into a more frugal future, according to Richard Heinberg, who coined the notion of "Peak Everything" in his 2007 book of the same title.
Fukushima could stall nuclear power, he added.
"The real upshot is the strong likelihood is we'll have less energy in the future and it will be more expensive energy. We're really looking at a different kind of society," at least for the next 20 or 30 years before new breakthroughs emerged, he said.
"This was the great benefit of fossil fuels in the early days, we had to invest trivial amounts and we got this enormous return."
Of course, theories of impending shortages have often turned out wrong, like the 1798 prediction by British scholar Thomas Malthus that population growth would outstrip food production. At the time, the world population was just one billion.
The right strategic response could deal with the risks of resource scarcity, oil depletion and climate change, said Nick Mabey at London-based environment group E3G. "No-one actually is gripping the strategic consequences of these risks," he said.
To manage risk, government spending priorities should be energy efficiency, inter-connected grids to link up different power sources across wide regions, smart grids to smooth demand and absorb volatile wind and solar power, and electric cars.
"Energy policy is about balancing risks - all forms of energy carry risks," said James Acton of the nuclear policy program at the Carnegie Endowment for International Peace.
And the tsunami was beyond the design of the Fukushima plant. "The real challenge is to improve our ability to predict natural and manmade disasters," he said.
Some green groups say there is no trade-off, and renewable energy coupled with energy efficiency can solve the problems.
Sven Teske, director of renewable energy at environmental group Greenpeace, said big shifts were under way with developed nations closing more coal-fired plants than they open.
"There is a phase-out of coal already. The reality is that everybody is moving towards renewables and gas. But some of the government rhetoric will remain in favour of nuclear," he said.
(Editing by Keiron Henderson)
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