Neela Banerjee (The New York Times)
The International Herald Tribune

Economic interests keep the world reliant on oil and gas

NEW YORK When it comes to world energy consumption, it is as if time has stood still for the last decade.

People still rely mostly on fossil fuels to light their homes and run their cars, despite the environmental problems that flow from burning coal, oil and natural gas. At the same time, renewable energy sources, like the sun and the wind, still glimmer as the great alternatives - clean, abundant and on the brink of mass production in a future that always seems around the corner yet perpetually out of reach.

Renewable energy sources, not including hydroelectric power, account for just 1 percent of the world's supply; fossil fuels provide about 85 percent, energy experts say. "The energy 'system' shows a substantial degree of inertia," said Joel Darmstadter, a senior fellow with Resources for the Future, a Washington environmental and economics research group.

The continued reliance on fossil fuels will be one of the most confounding issues officials face when they gather in Johannesburg next week to discuss ways of developing economies without degrading the environment.

One reason is that the main consequence of burning fossil fuels is an atmospheric buildup of carbon dioxide, the main heat-trapping gas linked to global warming. Yet global warming was scratched from the agenda of the summit meeting, largely at the insistence of the United States and oil-exporting nations.

The long-standing barriers to the shift from fossil fuels to renewables persist, and manufacturers and developers of the latter can only chip away at them. Solar and wind power are more expensive than fossil fuels, and even though their prices have fallen over the last decade, the average prices of coal, oil and natural gas have also stayed relatively low. Environmental groups say one reason these fuels remain cheap is that their price does not reflect the environmental damage they cause or the costs of defending supply lines.

Technological advances have damped the cost of renewable power sources, but technology has also kept down the cost of using fossil fuels and, in some instances, reduced their harmful effects on the environment.

"Even if there are rapid developments in renewables, by 2020 there is only a slim chance that they will be anything more than 5 to 10 percent of the world's energy supply," said John Mogford, group vice president for renewables and alternatives at BP, the world's third-largest oil company.

Most of the world's fuel is consumed by the rich, industrialized nations. Based on annual per capita energy consumption, the United States is near the top of the list with 354 million British thermal units and Western Europe with 170 million, while India uses 12 million, a report by Darmstadter says.

That gap may narrow. By 2050, the world may be using 15 times as much energy as it did in 1950, said Phil Watts, chairman of Royal Dutch/$ Shell. But most of that increased consumption will probably come from developing countries, he predicted.

Perhaps as much as many environmentalists, the oil companies are eager to find alternatives to fossil fuels because they understand that over the next century they will see their supply dwindling. There are enough proven reserves for oil to last another 37 years or so; natural gas, another 61 years, and coal, 211 more years, according to the Edison Electric Institute, a trade group. Those supplies suggest that fossil fuels are still cheap and plentiful. But a push toward renewable energy, Mogford and others said, will not be set off by the end of oil, but by governments concerned about other issues, like climate change.

The major oil companies are to varying degrees researching and manufacturing renewable energy sources. The three biggest companies are divided on the effects of their products on global warming. ExxonMobil questions the science; BP and Royal Dutch/Shell mostly accept it. But all are researching fuel cells and hydrogen as energy sources, although the economic feasibility of that technology remains years away.

In the meantime, BP and Shell are investing in solar and wind power. Each is involved in outfitting remote villages in developing countries, far from the grid, with solar power systems.

Solar power, while cheaper than before, still costs about 20 cents a kilowatt hour. Coal, by contrast, costs about 2 cents. Solar systems are expensive to build. BP makes enough solar equipment annually to produce about 70 megawatts of energy, an amount that even the company concedes is tiny. And that is the output of seven plants worldwide employing 1,500 people.

Research into a new technology called thin film photovoltaics could cut costs for the whole industry, but mass production is not yet imminent.

Wind power has become competitive, but few people want the towering windmills of wind parks nearby. And the wind does not always blow.