ENERGY IS TRANSITION
We not only have to change the origin of our energy (from fossil to renewable), we also have to reduce our energy use: in the 21st century we must gone do things differently than we did them back in 20th century. As energy will become expensive all products/services will become expensive and we will find ways to achieve the same results with less energy. Energy intensive products/services will price themselves out of the market. Energy intensive production models will be out-phased and replaced with less energy consuming production models. In this energy paper we just forget the impact of expensive resources/materials to make thing yet more complicated, but we all know that energy maybe can be solved (we can harvest it), but materials are finite resources, we just can replace them with alternatives (if these are available). Back to energy: We totally underestimate the massive load of energy fossil fuel delivers us each day. Totally. We have no clue at all. One simple example: Aviation takes currently 3% of the global energy consumption. The current aviation model is fully based on the massive energy supply that the availability of cheap oil us gives. When cheap oil disappears our current aviation model disappears too. Air transport will only be used for expensive components and air mobility will be reduced to (only the happy few) levels of the sixties. Or we must find a replacement for these massive energy load fossil jet-fuel delivers us with the same price and handling characteristics, or we must find other technologies to deal with gravity and speed (the two main facts of aviation): time to study Tesla's ionic models again. This is just one example regarding one facet that impacts both logistic and leisure. An other example: The current fertilizer production consumes 5% of all Natural Gas consumption and 2% of all global energy consumption. And these percentages rise each year a few points. When fossil energy gets more expensive fertilizer will become very expensive and by this food will become very expensive. This is a direct threat to global food production (as it is unsustainable in design). Furthermore it is a possible threat to global peace, as fertilizer production is getting rapidly concentrated in just 5 NG surplus nations. On Wikipedia you can find fertilizer information and the current production process on http://en.wikipedia.org/wiki/Fertilizer and http://en.wikipedia.org/wiki/Haber_process) or google or it So we need a new solution. With Planck Foundation we have designed a model where seed are coated with an algae/bacteria solution that makes fertilizer superfluous. Relocate the N production into the soil around the plants. Production on location without any energy demand. The algae/bacteria takes the Nitrogen out of the air and put in the soil around the plant (plants can't do this by themselves). This model delivers a huge energy conservation. In my opinion it should be part of the Global Redesign Initiative. The only danger is that they will be too active and poison the soil with Nitrogen. Isolation of the bacteria/algae and making them not to work too hard are the two challenges. The main visual effect of expensive energy will be a reach contraction: distance will be expensive. This will apply for every facet of every product/service and will lead to more to expensive energy adjusted production/service models. Global production has peaked. It will only be used for expensive products. Labour costs will no longer be the main production cost factor, energy will become the main production cost factor. The energy crunch will 'bring the jobs back home', just like the energy crisis has brought the (after loses remaining) capital back home. Higher energy prices will cause changes in every field. Global product brands will still be in place, but will get more competition from regional/local brands. Global production brands will stay global in development, but will continentalize, nationalize, regionalize or even localize in actual production locations. A practical example of this is the use of building installation stuff in construction. 10 years ago each construction company had its own construction installation stuff, today the hire it local: less assets on the balance sheets, lower transport costs and good quality without to operate an own maintenance department. Due to the cost of energy we will do any thing that uses energy different. Just driven by economics/pricing. Adjustment to new situations delivers changes. The reach of products and services will decline. Using less energy will be an important part of competitive market behaviour. Energy is Transition is a very valid statement.
Author: Gijs Graafland
Back to index page of Energy Economics | Energy Politics
Download the full Energy Economics report in PDF