Transition, What Transition? Counting the Cost of a Greener Tomorrow
Photo by Michael Marais
With another annual UN Conference of the Parties (COP) on climate change starting again next week, it is worth accessing the ongoing transition from burnt fossil fuels (coal, oil, and natural gas) to manufactured renewables (wind, sun, and storage) as global warming continues to rise beyond known comfort levels. Since last year’s COP, the number-one greenhouse gas (GHG) carbon dioxide (CO2) reached 422.0 ppm up from 418.5 ppm, while the number-two GHG methane (CH4) rose from 1915.7 to 1921.8 ppb. That’s another 50 billion tons added to an already edgy atmosphere, resulting in more heat, more moisture, and more damage. As for the transition, are we doing better, worse, or just the same-old business as usual? That depends on who you ask and the time frame.
Like it or not, we are all children of the Oleaginous Age. Petroleum is everywhere, like a stain that won’t go away. From Edwin Drake’s initial Titusville, Pennsylvania, find in 1859 to today’s 100 million barrels of oil consumed daily across the globe, we can’t get enough of the black stuff – to run our cars, heat our homes, and make our plastics. The list of petroleum-derived products is the story of modernity, including kerosene, gasoline, and heating oil, as well as numerous hydrocarbon-based products such as propane cooking stoves, butane lighters, pen ink, vinyl records, shingles, asphalt, pharmaceuticals, and even chemotherapy medications. At the same time, the global population continues to rise with increased energy use, passing 1 billion in 1804, 2 billion in 1927, 4 billion in 1974, and 8 billion two years ago, all because of an ever-increasing combustion of fossil fuels.
This year’s COP, number 29, is in Baku, Azerbaijan, on the western edge of the Caspian Sea, called the “new oil El Dorado” since the breakup of the Soviet Union. Together, the Persian Gulf and Caspian Sea hold two-thirds of known oil reserves (with Iran in the middle). One might think a UN conference on climate change might be better set elsewhere than a major petroleum-producing country. Indeed, reporting on the progress between nationally stated 2015Paris Agreement commitments and actual emissions, Climate Action Tracker (CAT) rated Azerbaijan’s climate action “Critically insufficient,” citing a 20% increase in GHG emissions by 2030, contrary to its declared Nationally Determined Contribution (NDC) to keep warming to at least 1.5 ºC. Rather than providing leadership, “Azerbaijan appears to have abandoned its 2030 emissions target, moving backward instead of forward on climate action.”
Azerbaijan has always been at the forefront of a global petroleum industry, thanks to its plentiful reserves and the invention of more mechanized extraction methods in a newly industrializing world, producing half of the world’s oil by the 1900s. Initially turned into kerosene for Russian lamps, the oil was soon refined as gasoline for a growing automobile industry, bunker fuel for ships, and diesel to turn the engines of industry. In time, the output from Bakucompeted for the lucrative Russian market with Standard Oil and John D. Rockefeller.
That venture was backed by Rothschild family money and the technical expertise of three brothers – Robert, Ludvig, and Alfred Nobel. The Nobel Brothers Petroleum Producing Company, a.k.a. Branobel, launched the first successful bulk tanker on the inland Caspian Sea, helping Branobel to capture half of the Russian kerosene market via the Volga River. More tankers were launched from the Black Sea as Baku oil was transported through the Caucasus Mountains by train to the Georgian port of Batumi via the Transcaucasus Railway and by pipeline, the route cleared with considerable quantities of a revolutionary new explosive developed by the youngest Nobel brother Alfred. Producing 30% of the world market, Branobel soon rivaled Rockefeller’s Standard Oil. Today’s revamped oil El Dorado is well-placed to provide even more oil and gas in the coming years, helping to counter lost Russian supplies in an energy-thirsty Europe.
With COP29 in Azerbaijan and COP28 in the United Arab Emirates, a pattern is emerging – the UAE’s Paris 1.5 ºC agreement reduction plans were also rated by CAT as “Critically insufficient.” Why not just alternate Houston and Riyadh to shorten the boardroom directives? With roughly 16% of global reserves, Saudi Arabia (“Critically insufficient”) exports more than a tenth of global oil, while number-one producer, the United States (“insufficient”), consumes more than two-tenths. Costa Rica, Chile, or Norway (“Almost sufficient”) would seem to be better choices, that is, if we want to learn about how some countries are reducing emissions. But no one wants to rock that boat. Business as usual is the goal.
Change always comes at a cost. To change the world’s liquid fuel and electrical grid supply from brown to green, the costs are extraordinary, where profits are measured in trillions of dollars by today’s Seven Sisters and various national oil companies such as Saudi Aramco (2022 profits: ExxonMobil – $59 billion, Shell – $40 billion, Chevron – $37 billion, TotalEnergies – $36 billion, BP – $28 billion, ConocoPhillips – $19 billion, ENI – $15 billion; Aramco $120 billion). We are all being restricted by their organized refusal to change.
As philosopher and science historian Thomas S. Kuhn noted in his 1962 book, The Structure of Scientific Revolutions, “Paradigms gain their status because they are more successful than their competitors in solving a few problems that the group of practitioners has come to recognize as acute.” This was the case when coal replaced wood as more energy density was needed to fuel the Industrial Revolution, while the internal combustion engine blew away its horse-powered competition to provide a reliable means of transportation, but is now “shifting” again because of another acute problem as global warming generates more extreme weather and combustion pollution continues to kill millions every year.
Unfortunately, we can’t expect much shifting if oil continues to run the COP climate change show. Indeed, Azerbaijan is already planning to expand its fossil fuel production over the next decade, primarily through natural gas exports to the European market to replace Russian supplies. As noted in an Urgewald report on Azerbaijan’s state oil company, entitled “SOCAR – Azerbaijan’s Fossil Fuel Proxy,” there is an “alarming conflict of interest” between such a “deeply political organization and the Azerbaijani President’s ties to the company.” As at COP29, expect updates about side deals to secure new distribution contracts (and pipeline transit fees) from Azerbaijan.
The transition is being slowed by unwilling participants, disregard of agreed policy, and standard structural inertia. Of 39 countries plus the EU that account for 85% of global emissions assessed by Climate Tracker Action, none are on track to meet their legally binding 2015 Paris Agreement goal. Not a single country is “1.5 C Paris agreement compatible.” The two most populous – China and India – are rated “Highly insufficient,” while the EU as a whole is “Insufficient.” Expecting GHGs to peak by 2025 and temperatures to stop rising is a fairytale.
And despite a record amount of renewable energy installed last year, the Paris-based International Energy Agency (IEA) predicts oil will become cheaper in the next decade and more abundant as renewables continue growing, increasing consumption and further stressing an already fragile global ecosystem. A transition is meant to replace the old, not augment the new.
With global warming threatening long-standing ways of life, including changed agriculture, eroded shorelines, and increasingly unstable weather events, we should be doing everything we can to avoid higher costs. Instead we get more bad weather, such as horrendous flash flooding in parts of eastern Spain last week that left more than 200 people dead after a year’s rain fell in just 8 hours. Warmer sea temperatures create more moisture, while a hotter atmosphere holds more moisture (7% more water for every degree C increase). Humans can no longer contain the growing threat.
There are successes to applaud, driven mostly by industry innovation. Solar cell and wind turbine costs continue to drop. In the last decade, solar photovoltaic (PV) costs dropped by 90%, onshore wind by 70%, and chemical storage batteries by over 90%. Much less polysilicon is now required to make a PV cell (87% reduction in volume/watt in two decades). The US National Renewable Energy Laboratory publishes its light-to-power conversion chart, showing how innovation increases cell efficiency year on year – 85 groups are represented, including perennial stalwarts ARCO, FirstSolar, and UNSW.
New ways of employing solar are appearing, including canal canopies that lower evaporation, floating solar, and “agrovoltaics” that make use of neglected space and can help farmers to “double crop.” China continues to install more PV solar and produces almost 80% of all solar panels, while its Wind Base program is on track to reach 400 GW by 2030 and 1,000 GW by 2050 for a total national penetration covering two-thirds of its existing electrical grid from wind power alone.
The UK quit coal after 142 years, closing its last coal-fired power plant in September. The 60-year-old thermal coal plant near Nottingham ended Britain’s historic coal past, although a new record was set in 2023 for global coal consumption led by China. Not exactly the agreed-upon “phase down” of coal reached at COP26 in Glasgow. The achievement is also dubious given that biomass is now being burnt as a replacement fuel in converted coal plants, which is worse for the environment than coal. Cutting down trees, shipping them across the Atlantic (much of UK biomass comes from the eastern United States), and burning them as pellets is not a success. If one wants to reduce global warming, the easiest solution is to plant more trees, not cut more down. The UK National Grid, however, is now increasingly powered by plentiful offshore wind farms.
“Drill baby drill” is still the mantra of most politicians in the United States regardless of party stripe, whether explicitly by Donald Trump or in reality by Joe Biden as the US continues to increase oil production and export more fracked natural gas. Despite signing the Inflation Reduction Act that included $369 billion in green investments over a decade, the Biden Administration also increased drilling permits and exports. Maximizing oil output and selling abroad is not a strategy for reduction. Change is never easy – no one gives up their billions for nothing.
Just as worrisome is the push for increased nuclear power, especially in China and India, as the World Nuclear Association reported four new plants built in 2024 while construction began on eight more (six in China). Ambitious tech companies are also calling for nuclear plants to run their expanding data centers, claiming a supposed green cred. Elsewhere, the world is cautious as in the UK, now on the hook for £136 billion and counting in cleanup costs at Sellafield, site of the world’s first commercial grid-tied nuclear power plant in 1956.
Nuclear power is inherently dangerous, comes with unsafe carbon-intensive mining practices (thus not clean or green), endless waste problems (a.k.a. “nuclear eternity”), can be re-engineered for weapons, and is expensive (never mind the subsidies). According to Lazard, a US-based investment group that calculates the real costs of energy via its Levelized Cost of Energy metric, nuclear is more than three times as expensive as renewables ($226/MWh versus $74/MWh PV and $59/MWh onshore wind), while costs continue rising each year – a reverse learning curve where prices go up with experience rather than down. The blatantly false “too cheap to meter” PR is finally being called out.
Electric vehicle (EV) adoption is increasing and is essential to reduce petroleum dependence, albeit unevenly – Norway boasts almost 100% sales with an average of 20% worldwide. China leads the way with half of all new EVs sold (a.k.a. new-energy vehicles), while developing countries are starting to pick up the slack on percentage installed renewables to provide the clean fuel. Critical resources required for EV batteries are still controlled by foreign companies in China and the US, such as lithium from South America and cobalt from the Democratic Republic of the Congo, extracted with little concern for local needs and rerouted to richer manufacturing countries. New supply lines are being created to maximize output without guaranteeing safety along the way.
EVs are particularly important to clean our polluted cities and waterways, but adoption is being stalled by short-sighted government policy. EVs are in fact much cleaner, safer and easier to drive, while reducing our reliance on petroleum. Price is the main reason holding back wider EV adoption. Chinese manufacturer BYD’s smallest compact, the Seagull, costs about $12,000, while a Nissan Leaf is about $28,000 and the cheapest Tesla $44,000. Although running costs are less for an EV, most consumers still can’t afford a low-end EV let alone a higher-priced Tesla. With 100% tariffs imposed in North America and the EU, prices will rise even more.
Tariffs are about jobs and containing Chinese dominance, yet come at huge retaliatory costs in our interconnected trading world. Asking China to cut down GHG emissions from fossil fuels while blocking its growing renewables industry is also counterproductive, what China’s foreign minister Wang Yi called “pan-securitism and protectionism.” Protectionist tit-for-tat policies are already impacting consumers as China threatens Canada with canola tariffs and Spain worries about pork products. Contrary to coordinating EU strategy, Spanish prime minister Pedro Sanchez asked the European Commission to reconsider the tariffs. But Spain isn’t as dependent on car sales as Germany, the de facto EU engine.
Tariffs may protect local jobs and buy time, but the consumer is stuck paying for the short-sightedness of Western carmakers slow to adapt to new competition, just as German and Japanese undercut the Big Three on cost and style in the 1970s. A better approach is to increase subsidies to local manufacturers, lowering production costs and sticker prices. Imagine if long-established carmakers tried reverse engineering Chinese designs that are already more than a decade ahead, just as Chinese carmakers did to build their envious market share. Imagine if governments offered more investment and subsidies both to local and foreign carmakers, forcing a global rethink and ultimately leading to more local manufacturing.
BYD and others have started to build plants in local markets – BYD announced plans for an EV plant in Turkey, its second in Europe after Hungary – but until costs come down consumers and the transition suffer. GM, Ford, and Stellantis (Chrysler) in the US and Volkswagen, BMW, and Volvo in Europe lag behind Chinese sales, while even Tesla has to play catch up to stay in its high-end lane. BYD passed Tesla as the number-one EV seller for the first time this past quarter. In the US, concerns over job losses for the more easily assembled EVs fueled labor complaints amid last year’s UAW strikes, while VW is threatening to lay off thousands of workers and close plants because of a cut to government EV subsidies and the loss of cheap Russian gas.
Indeed, Western automakers are in trouble because of lack of investment and incentives, allowing China to dominate the evolving EV market. But the revolution revolution is here to stay despite the recent slowdown in sales and fears about cheaper Chinese imports. InsideEVs.com writer Kevin Williams noted, “For a long time, Chinese cars really weren’t great. That isn’t true anymore. Chinese EVs are competitive in ways that go beyond just price. They’re stylish, they’re well-made and they work really well.” While it’s true that labor practices and state-controlled government subsidies in China are not as free and fair as in the West, there is no doubt EVs can become more affordable given concerted global agreements and action.
Battery performance is also much improved, increasing overall efficiency, reducing charger anxiety, and speeding up refills. More chargers will help, though new infrastructure has been slow to roll out. One sees chargers scattered here and there, but more are needed, both privately and publicly – soon hotels, motels, and shopping malls will all have chargers, possibly free to use to entice more customers. The chicken-and-egg EV-charger analogy is moot since EVs and charging infrastructure can both evolve separately. Of course, greater EV adoption means less oil.
Is it all just greenwashing then as the oil execs fly in and out of Baku to compare notes and compliment the host county on its fossil fuel expansion plans with a few side deals thrown in? Landlocked Azerbaijan is planning to use Turkey as a natural gas hub at the crossroads of East and West, while Turkey is in talks with Russia to provide more gas to Europe via the Turkstream pipeline in defiance of Western sanctions and ongoing climate concerns. Where better to talk shop than at a talking shop with all the major players? It’s hard to act in the best interest of a warming planet when national goals are the priority.
The scale of what is needed is daunting, but what can any of us do? “Negawatts” is an area we can all make a difference, hopefully not just symbolic. Coined by Rocky Mountain Institute scientist Amory Lovins, any watt we don’t consume is just as valuable to reduce emissions. And despite the slow pace of change, there are simple fixes such as easy-to-install rooftop solar thermal heating, especially in warm-weather climates – no need to use the grid for readily available hot water. There is no need for noisy and polluting gas-powered lawnmowers, leaf blowers, motorcycles, or scooters. Induction stoves save lives as gas-stove pollutants continue to kill tens of thousands of people each year. Paper-packaged condiments, wooden cutlery, and paper bags are an obvious take-out alternative to plastic. We can all make a difference.
As for governments interested in real change, zero-emission thermal plants should be mandatory. Carbon capture is worth exploring, at least for industrial processes, but is expensive, unproven, and is more about keeping petroleum in business. More high-speed rail lines are needed, increased public transport, and people-sized not car-sized cities to reduce energy reliance. If the oil companies weren’t setting the agenda at COP and beyond, there would be a wish list of things to do for consumers and manufacturers – investments, incentives, and infrastructure to build a better tomorrow. Alas, co-opted by oil, the long fossil fuel goodbye continues.
Is there an acceptable meeting point between capitalism and the environment? With a more easily managed command economy, China has carved out an enviable lead in renewables manufacturing, but has much to do to lower GHG emissions. Hopefully by the next COP we will be further on than arguing about non-existent “phase outs” and “phase downs” and can act towards real change.
As noted by Herman Scheer, the German parliamentarian responsible for the 2000 German Renewable Energy Act that spurred on an avant-garde approach to energy technology via consumer subsidies and grid buybacks, “Making the groundbreaking transition to an economy based on solar energy and solar resources will do more to safeguard our common future than any other economic development since the Industrial Revolution.” What is COP waiting for? Gentle men and women, start your electric engines!
