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Apocalypse later?

16 February 2024

The story of the human race is not about to end. No apocalypse now. And as to apocalypse later, we can see how our leaders have revised their views. Last year, the Government pulled back on its commitments to achieving Net Zero on the original pathway. Last week, the opposition Labour party, believed by many to become the next party of Government later this year, backtracked on its £28 billion green spending pledge which had been embedded as a central plank in its planned strategy.

The people with the ultimate responsibility for our welfare, and the most extensive access to specialist knowledge, have actually downgraded the threat posed by Climate Change.

However, while the idea of an imminent apocalypse seems to be no more than scare mongering, we at Green Angel Ventures are doing nothing to lessen our work in reducing and reversing climate change. We expect to make at least three new investments in the coming months, we are in the process of raising the Seventh Round of our EIS Climate Change Fund, and we are mounting a campaign to introduce our work to IFAs around Britain, to harness their help in spreading the word about early stage climate investment. If you are an IFA, or if you know an IFA, get in touch with me and I will explain why: how the granular technology innovations which we support are developing the capacity to adapt entire systems to operate as well as before in providing us with what we need, while no longer contributing to the carbon canopy that has trapped increasing levels of heat within our atmosphere.

But here is the problem that perhaps the politicians have been briefed to understand better than most.  The threat of climate change has obscured a different threat altogether which can no longer be ignored. Global energy supply is in danger of falling below global energy demand.  This makes our work to grow alternative energy sources more important than ever.  The consequences of global energy shortage may fall short of an apocalypse. But they may not fall as far short as would be in the least bit comfortable for us.

There is a pernicious problem in the heart of the global economy that has been developing almost unnoticed. It is called Energy Cannibalism.

Energy cannibalism takes place when the energy required to produce energy exceeds the value of the energy produced. In practice, this means the energy required to extract, or mine, the energy we use.  

Energy cannibalism becomes a huge issue when energy demand exceeds supply, and it happens partially because energy demand is challenging supply. The energy companies naturally look for more and more sources to enable them to satisfy demand. But the sources of all finite fossil fuels are harder and harder to access, and therefore more and more expensive. If affordable sources are harder and harder to find, unaffordable sources mean prices increase, supply dwindles and the problem multiplies.

This is already showing its teeth. The recent energy crisis caused widespread inflation, shortages, hardship, poverty, and this was mainly a result of conflict in Ukraine. We have yet to see the consequences of energy cannibalism and a real gap between demand and supply emerge.

The circumstances of our energy consumption globally are uncomfortable for all of us committed to the fight against climate change. Oil is our single largest energy source, followed by coal, followed by natural gas. Renewables are a much smaller contributor to global energy consumption. This table shows the figures in 2022:

 

Data source: Energy Institute – Statistical Review of World Energy (2023); Smil (2017)

 

It becomes even more uncomfortable when we recognise that overall energy consumption as well as consumption of oil (and coal and gas) is growing quickly. The figures for 1990 were total global consumption of 106,715 TWh, which has grown by 68%, with oil contributing 37,677 TWh, which has grown by 41%. In the same period, the world’s population has grown by 51%.  

It comes as no surprise that the pressure on oil extraction is now greater than ever. But it is now more expensive than ever, and those diminishing returns mean the Oil & Gas companies are finding less and less accessible, affordable sources.

“For most of the second half of the 20th century, oil companies were finding more crude than global consumption, around five times the demand volumes. This ratio of discovered resources versus demand has dropped in recent decades, and is now at around 25%. This means that we burn four times as much oil every year than what we find.  This all ties back to the increased energy demand of finding and drilling into ever smaller, ever more remote oil patches.” (A Civilizational Tipping Point, Medium, 22nd January 2024)

This today is the problem that represents the deepest threat to our global economy, because we are all still overwhelmingly oil dependent, with no sign of this changing in the short term, and little sign of it happening in the medium term.  

There is a simple test you can apply. Consider the list of commodities and services on which your household depends, and ask yourself: how many of them require diesel just to deliver them into your hands for your own use? Here is a list, incomplete, perhaps, but it’s a start:

  • Bricks and Mortar
  • Furniture and Carpets
  • Clothing
  • White Goods (Washing Machine, Fridge, etc)
  • Brown Goods (TV, Sound System)
  • Consumables (Food and drink, etc.)
  • Services (IT, Telephony, etc)
  • Utilities (Heat, Light, Water)
  • Transport

How many did you count that did not depend on diesel for haulage? I counted them all as being diesel dependent, apart from one. Utilities. What do you think? And this question is restricted simply to haulage and transport. What happens when you add in production and manufacture?

This really is a finite fossil fuel. What do we do when we run out? We must have alternative energy sources in adequate quantities. There will be no apocalypse now, but we must be determined to do all we can, both in Green Angel Ventures and beyond, to invest in, support, advocate and embrace the changes we need to make sure there is no apocalypse later.