ENERGY (Mini-articles) Index

A cloud no bigger than a sheikh's hand has been cast over the shining sun of world economic recovery. Saudi Arabia's Royals may be about to snatch away the punch bowl just as the party starts. Growing domestic political pressures on the Saudi family could before long lead to higher oil prices. The result would be a global oil crisis which would spin the world into another deep recession.

With the world's economies growing, so, too, is the demand for oil. Dr Marion Stewart, an economist with the NERA consultancy, forecasts demand for oil in 1995 will be more than 1.5 million barrels per day higher than the 65 million-plus barrels at which it runs now. 'There seems little prospect that non-OPEC oil supplies will be able to increase production by that much,'says Stewart. At present, OPEC countries account for about 25 million of the 65 million barrels of daily world output. And they have just announced that they will not increase output. Their goal: to drive up world oil prices.

Stewart foresees a doubling of real crude prices in the next 10 years. But intermediate interruptions in supplies could send prices well above that level. The oil crisis of 1972 multiplied the price of oil, and thus all energy and energy-intensive products, by about four times, and the world economy took many years to recover from this. The West may find itself coping with still another oil shock, one that will make the previous one seem trivial by comparison.

From an article by Irwin Stelzer in the Sunday Times, 11 December 1994

As a consequence of the oil crisis of 1972, when prices multiplied four times, many companies threw themselves into solar research. However, as cheaper oil prices re-asserted themselves, only a few kept alive the hope of capturing cheap, clean energy from the sun. One of these was Amoco, and it has recently formed a joint venture with the natural gas company Enron, to build the world's biggest solar far. Over the next 15 years, they plan to build a 100MW facility in the Nevada deserrt, made from more than 1 million solar panels. By mass producing equipment on this scale, the companies believe they can cut the costs of the electricity to 5.5 cents per kilowatt hour, which compares favourably with other fuels. In australia, the University of New South Wales has announced a breakthrough in the design of solar cells, which it believes will cut the cost of solar electricity by 80 per cent in 5 to 10 years, making it cheaper than coil-fuelled power.

Such projects still have much to prove. Many in the energy industry are sceptical that the Nevada and other projects will be able to reduce costs as substantially as predicted. However, these developments demonstrate the extent of progress in the quest for cost-effective solar power. Current work is building advances over the past decade in which the cost per unit capacity of solar power has steadily decreased from $20 per peak watt to $5.

The scope for commercialising solar power is inevitably affected by climate.Large solar power stations are not sensible in northern Europe, for example, because there is not enough sunlight. More than two thirds of the market is in areas of Third World countries that are not linked to a national grid, where it can be used for lighting, refrigeration, communications and water pumping. Already, the market has grown at 30 per cent a year over the past decade to around $500 million.More widely, once the costs of solar energy have fallen below that of other fuels, the application will be nearly limitless.

From the Financial Times, 7 July 1995

With 200 active and dormant volcanoes and more than its share of shifting continental plates, the Philippines is prone to natural disaster. But the archipelago's volatile geography is being turned to the country's advantage in the form of Asia's biggest geothermal power industry. Geothermal energy supplies about 20 per cent of the Philippines' electricity output. It is considered to be the cleanest form of electricity generation after hydroelectric power.

The energy is extracted by drilling holes two or three kilometres into the earth's surface to tap underground reservoirs of water and steam. The water, heated by molten rock below the reservoir, flows up the pipe under its own pressure where it is separated from the steam and reinjected into the ground. The steam is piped to a turbine-driven generator. The government estimates that geothermal energy has saved $2.5 billion in oil imports since the industry was launched in 1971 and has also prevented the emission of thousands of tonnes of hydrocarbon gases.

Inudstry analysts estimate that the cost of geothermal energy is comparable with oil at about $15 per barrel. It is competitive with coal but much cheaper than coal-fired stations fitted with environmental scrubbers. Compared with hydroelectricity, with capital costs of about $3,000 per kilowatt, Philippines thermal energy is cheap at just over $2,000 per kilowatt. At a load factor (capcity utilisation) of 85 per cent, geothermal power is also efficient. According to Unocal, which operates the largest geothermal plant in the world -- 2,100 megawatts -- at the Geysers steam field in California, the Philippines has the potential to produce 4,000 megawatts of geothermal energy a year. Last year, the country pumped out 1,000 megawatts of steam from its nine geothermal plants, less than half the amount extracted in the US, but well ahead of Mexico (750 megawatts), the world's third largest geothermal producer. The country with the most exciting potential is Indonesia and will be the world's leading producer by early next century.

There are some environmental problems associated with thermal power, such as traces of arsenic, boron and other minerals which can contaminate local water supplies, or corrode drilling heads. Also, geothermal plants can emit some noxious gases such as hydrogen suphide, though in much smaller quantities than from fossil fuel plants, and can usually be scrubbed clean from the steam.

From the Financial Times 19 July 1995