Natural Gas vs. Renewables

The Economist Debates: Natural Gas or Renewables?

Anyone interested to know about the future of energy and climate change mitigation must follow the elements of this debate hosted by The Economist. Likewise, the fight to eliminate poverty hinges on the energy security of every nation, more specifically the resultant impact of energy prices on third-world countries.

The big question that everyone wants answered: What comes after oil? There is immense pressure on giant economies from China, who invested a massive US$51.1bn in renewables last year, to pick up pace on their own investments and R&D. The possibility of implementing a global carbon tax, as well as the general urgency for positive climate change, has pushed governments and energy corporations to diversify their energy sources.

The debate however, is flawed. There is no argument that renewables surely produce less carbon emissions than natural gas, but basic economics of scale will ensure that natural gas will take over as the top energy resource over the next two to three decades. Even with government subsidies and incentives, it would take huge technological breakthrough to overcome the cost-effectiveness of using gas.

Despite being cited countless times as a positive example, China is very much an outlying case for two strong reasons: Firstly, as an ascending world power, China would want to develop energy self-reliance. Given its resources and manpower it has the potential to do so, and once achieved, will allow the superpower to throw its weight around the region. Secondly, by leading in terms of renewable energy infrastructure manufacturing and investment, it provides jobs for its population, pulling millions of Chinese people out of poverty and eventually monopolizing the sector.

For most other countries however, there are insurmountable barriers to direct investment into renewables. Politicians from developing countries have but one goal, and that is to ensure that energy production matches the growth of their economies. When compared to the cost of coal, gas is more competitive than oil and will be a better choice, especially since it fills the nation's coffers and provide bandwidth to provide other basic needs such as education and clean water. In addition, many developed countries such as Singapore have little resources to seriously utilize any form of renewable energy.


Renewables may eventually reach the necessary cost-efficiency to compete at a level with fossil fuels, but as market forces will have it, the day will not come anytime soon. The defense strategy of most countries presently includes a diversification of energy sources, and security requires decoupling from intermittent, unpredictable sources such as wind and sunlight, or niche resources such as biofuels. Besides investing in nuclear plants, hoarding fossil fuels is still the only way to provide such security.


With regards to this particular debate however, both sides will probably pick sure-to-win stances that are not direct opposites, with the defending side insisting on the economies of scale behind gas and the challenger side insisting that renewables produce less carbon emissions than gas. It is in such a flawed debate that should lead one to question the importance of the politico-geographical context and the military defense strategy behind energy diversification.

Clearing the Air? Try Harvesting Methane Instead

 New York Times: To Fight Climate Change, Clear the Air

Ever since the greatest climate negotiation "failure" at Copenhagen, it is hard to blame anyone for having low expectations towards the outcomes at Cancun, which has just begun. Academics Ramanathan and Victor have made an important point however, on the fact there are many other factor issues that negotiators at this round of talks should discuss about i.e. gases such as HFCs and methane. During the run-up to the event, media publicity and debate have been circling around the emission of one major contributor: carbon dioxide. Talks about carbon taxes, cap-and-trade etc. have grabbed the headlines, ignoring other significant contributors to global warming.

There is a lot of potential for the gas methane. The disadvantage, as stated in the article, is that "the accounting systems used in climate diplomacy are cumbersome and offer relatively few incentives for countries to make much effort to control methane". Nevertheless, that excuse of "accounting inconvenience" can also be used to demolish the authors' argument for using clean air as a common platform for negotiations at Cancun! There is no internationally-agreed method to calculating the cost of human lives as a result of polluted air. Many developing countries will even argue that the attracting of coal-reliant industries and destruction of rain forests would probably save more lives from hunger and poverty in the short-term.

The IEA's latest World Energy Outlook 2010, the discovery of unconventional gas in the United States and Qatar's efforts to promote its natural gas as a increasingly important energy resource all indicate that this resource will be playing a huge role in the transition to a renewable energy economy over the next few decades. What this also means is that there is a potentially enormous market for the collection, transportation and resale of methane gas. Energy companies and engineers should not let themselves be setback by the lack of accounting procedures, but instead aim to devise instruments for the collection and storage of methane. There are profits to be made from the sale of effective instruments and re-sale of methane gas especially to developing countries where their use is still significantly prominent. Global economic trends show that entrepreneurs and pioneers are most likely to emerge from immigrants or migrants from developing countries who have social ties that will enable the sale of methane gas back home. An opportunity like this is a clear example of how entrepreneurship and private investment in a global economy can contribute to the environment.

As for air pollution and health, it is only useful so far as it rides on buzz phrases advocating human rights such as "improving the quality of life for our citizens and future generations" and "clean air for all". Although it is true that there is collective interest among the governments to doing so like the authors have pointed out, as long as critics can show that it is disadvantageous to economic growth and production, there will most certainly be delays and worse still, even lower expectations for future climate talks. But we must do what we can now, and that is to find solutions that flow easily with the economic tide until slightly later, when circumstances become hopefully ripe for a united effort to save the planet.