Here’s a thought, or a question really, on whether the system of energy production and use is being forced to change by market realities. Brent crude prices went over US$72 last night and light sweet crude in New York closed near US$70. In a world where there are only a few dozen producers of hydrocarbons and everyone else (6 billion) is a consumer, oil prices are only going to go higher. Oil, gas, and coal have to be found, produced, transported, and turned into various transportation and industrial fuels.
That’s the world we live in. The supply of energy is confined to a few relatively scarce sources and an even fewer number of producers with the capital and the expertise to deliver energy to the markets. And frankly, it’s worked pretty well so far for everyone. Efficiency was based on centralised production and distribution. But is this still the case?
All hydrocarbons got their original energy from the sun. The sun shines down on the planet everyday, bathing the globe in energy that mostly goes unused. With the political cost of oil and gas rising – not to mention the possible environmental (or at least regulatory) cost of hydrocarbons – what would the world look like if more people produced energy and sold back what they didn’t use to the centralised distributors?
If more people sold electricity back to the grid-from fuel cells, solar cells, wind, or hydro power-you begin to have a less centralised, more distributed system for power generation. Of course, fuel cells and solar cells are probably not going to keep the lights blinking on the Vegas strip. But a change at the margin is a start.
Of course, oil’s chief use is for transportation fuels. And until we have an electric power system that can generate enough juice for electric or hybrid cars, oil will not be replaced by the sun, the moon, earth, wind or fire.
But if electric cars could plug into cheap juice on a decentralised grid- with both large scale nuclear generation at one level and small scale, home- power system generation at another level…well at the very least you have another model for how the world might evolve to meet its power and transportation needs.
The Daily Reckoning Australia
Is decentralised electricity the answer to the looming energy crisis? Leave a comment below.