Home' Trinidad and Tobago Guardian : March 20th 2014 Contents The world of energy has seen
significant developments over
the past few years. The devel-
opment of shale gas, new trade
routes, changes in energy con-
sumption patterns from
nuclear power to natural gas and a greater
global awareness of renewable energy are all
evidence of this.
While all of these factors may reshape the
world s energy landscape, the dynamics of the
world s political; socio-economic and envi-
ronmental climate make it difficult to accurately
predict the next move or development for the
global energy sector.
Dr Vaclav Smil addressed the dilemma on
day two of our 2014 energy conference and
conference participants voted his presentation
as the second highest ranked presentation for
the entire conference.
Although, his topic centred on the future
outlook for the global energy sector, Dr Smil s
presentation pulled together different ideas
and concepts which left the audience with
more questions than answers.
He made one thing clear.
That is, speculating or forecasting the future
of the energy sector is a Herculean task. Tracing
the long evolution of the LNG industry, he
explained that energy systems are complex
and take time to develop and mature. This
fact makes it even more difficult to forecast
a country s energy development path. For
example, LNG development took at least 135
years to develop from concept, to liquefaction,
to shipping and finally to commercial pro-
duction. See Figure 1.
Similarly, although there has been a major
thrust towards renewable energy (RE) devel-
opment, green energy systems also seem to
Today, renewables are yet to account for
five per cent of world energy production while
coal, oil and natural gas represent 50 per cent,
40 per cent and 25 per cent of global produc-
The former university professor argued that
these are fundamental obstacles for renewables.
Biofuels, photovoltaic energy and wind power
among other sources of green energy, are costly
to develop, require long and expensive trans-
mission lines, land, infrastructure and many
are not capable of supplying 100 per cent of
Consider that in the sunny Beneixama Spain
PV energy has a 16 per cent capacity factor,
which means that it supplies demand only 84
per cent of the time. In Hong Kong the peak
power density is 3,000 watts for every square
metre. This cannot be delivered through bio-
fuels, wind or solar energy systems.
"We are not that type of society. We are a
365 days a year, 24/7 society where servers
never sleep. Subways in Tokyo never sleep.
Air conditions during the night in Mumbai
never sleep. So we need 100 per cent load
factor," he stressed.
Smil emphasised this does not mean renew-
able energy development is a worthless cause.
There are still significant cost savings which
can be realised through the implementation
of energy efficiency and renewable energy
systems. However, it takes time for green
energy systems to evolve.
Where does T&T lie in all of this? Deviating
a bit, Smil sought to explain T&T s position
in the global natural gas landscape. He believed
that the cheap natural gas bodes well for T&T,
however, it can create problems.
In painting our picture, he stressed that in
per capita terms, we are exporting more than
Russia, but control only 0.2 per cent of natural
gas resources while Russia controls approx-
imately 22 per cent of the global market.
Secondly, although T&T exports more LNG
than Russia, we only have three major markets;
the United States, Argentina and Europe. Nev-
ertheless, the US does not need T&T s gas
now because of its shale supply, Argentina
can go elsewhere for its gas supplies and we
have major gas provinces (for example, Qatar)
to compete with for Europe s demand.
In relation to natural gas, the thought leader
added that the frontrunners are Russia, as a
key producer (Gazprom, Siberia, Ukraine and
European Union), China, which is a major
consumer and potential supplier, the US and
Iran. Forecasters should place a watchful eye
on Iran as it can become the largest producer
of natural gas, given that it is able to export
more than Russia.
For our twin islands, there are multiple
uncertainties around what these countries will
do in the future. For Smil, it basically has
nothing to do with economics. For example,
renewable energy can be a success in Europe
if it decided to heavily subsidise green energy
However, while some EU countries, like
Denmark and Germany, have a high penetration
of renewable electricity, this speaks to electricity
generation, not fuels.
"Certainly, your Mercedes Benz and Audi
will require liquid fuels which cannot be pow-
ered from wind turbines in the North Sea,"
So how far will renewables go? For Smil,
the answer really depends on how much money
the EU decides to pump into renewable energy
development in the future.
In an effort to further clarify his point, he
pointed to China and shale oil and gas devel-
opment. China has large shale plays, but lacks
the drilling expertise to develop them relative
to the US. However, this could change in the
future with attempts to develop technological
Moreover, China can exploit natural gas in
the South China Sea. Ongoing disputes which
surround ownership of the Gulf and its
resources put it in conflict with the Philippines,
Malaysians, the Vietnamese and other neigh-
bours. Will there be any political changes or
otherwise to facilitate such a move in years to
come? Smil believes only time can tell.
As such, he cautioned that these uncer-
tainties make it difficult to sufficiently forecast
the turn of events in the global energy envi-
ronment in the future.
For more information on this article, please
contact Nazera Abdul-Haqq at nazera@ener-
MARCH 2014 • WEEK THREE www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG21
The future of global
energy is uncertain
About Dr Vaclav Smil
He was a distinguished professor
at the University of Manitoba until
2011. He has provided consultation
services for the White House and
government leaders throughout the
Dr Smil is the author of many
books, including Prime Movers of
Globalisation; Energy Myths and Re-
alities; Bringing Science to the En-
ergy Policy Debate and Energy
Transistions; Feeding the World: A
Challenge for the 21st Century.
Long evolution of LNG industry
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