Course:ECON372/OK2019WT2/Topic11
Energy
Due system time (GMT), 07:59, 14 February 2020
Group #1
https://www.nationalobserver.com/2019/04/22/opinion/shell-aims-lead-big-oil-pivot-clean-energy
Summary
The article by the national observe discusses the implications and reasons behind oil giant shell's diversification into green energy technologies. Shell has decided to proactively diversify their business away from oil in order hedge their bets against the world economy reaching peak oil demand. Shell started the process by committing to cutting the carbon footprint of its products in half by 2050 with an interim goal of 20% by 2035. Shell has also withdrawn with an anti climate change lobbying group in the United States and has publicly served notice on many other lobbying groups stating their climate policies are "misaligned". In addition to these actions shell has begun acquire many smaller firms in the zero emissions charging, clean electricity, energy storage, and micro grid industries. The plan is to acquire as many new technologies as possible and allowing the growth to center around the quality of the technology and its capabilities. The competencies gained by being involved will be very useful as the industry evolves as shell will be able to offer a wide variety of services under one umbrella. They have been doing so with a pilot project called Shell Energy Retail that delivers all the aforementioned services under one company. The article concludes by stating that it is important to note that Shell is likely pursing these avenues to hedges their risk of a collapse in oil demand in the future not necessarily out of a pure desire to conserve the planet. While what Shell is doing is a step in the right direction it is important we understand the underlying causes of their actions.
Analysis
Shell is attempting to vertically integrate new technologies to generate energy without producing GHG. This has been difficult to do not only due to our reliance on fossil fuels as a result of our energy intensive economy but because of political interference. Nevertheless Shell is rebranding itself as not just a fuel company but energy company as it sees the future of energy production shift towards renewable.
In the short run this will continue to be a difficult effort but in the long run the geopolitical and economic situation will change and embrace renewable energy. As there are little alternatives for energy production due to the scarcity of fossil fuel resources and their effect on the climate. This is being aided by government intervention through subsidies. However there are still issues with this transition as renewables will need to be diversified in order to assure high baseload and capacity. Nevertheless Shell is leading the transition away from fossil fuels realizing that nonrenewable energy will not last forever.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 19 | |
| Course Related Analysis (30-50) | 25 | It is more horizontal integration than vertical integration. Electricity and fossil fuels. The description of a backstop technology is also relevant. Solar is a backstop energy source. It's price is getting cheaper, while the cost of fossil fuels is increasing. Therefore, Shell is investing in a way that may enable it to be one of the suppliers of the backstop. |
| Extended Analysis (0-20) | 0 | |
| Presentation (10) | 10 | |
| Total | 74 |
Group #2
Summary:
The article is mainly written by the amount of clean and sustainable energy that has emerged in China, and how in the most recent years where the country changed from biggest consumer of fossil energy to the now biggest producer and exporter of clean energy. The report lists facts such like China now has a clear lead in terms of the underlying technology, with well over 150000 renewable energy patents as of 2016 which is around 29% of the world's total, with the US and Japan following at 100000 and 75000 each. On the other hand, for those countries that depends on the oil and fossil fuel industries, such like the states in the Middle East and North Africa, alongside with Russia and other common wealth countries have seen a drastic decline in fossil fuel revenues, and some countries may even face political instability. Moreover, the article also makes a statement where clear energy is not for all countries over the world, since some of them may not be in the position nor have the correct resources to produce clean, renewable energy such like solar energy and wind turbines. In general, as the sudden increase, China is becoming an example and find itself in an influential position.
Analysis
China, US and Japan are like the producers of clean energy on the world market and with a steady increase in demand of clean energy. There are more and more countries trying to step in to produce clean energy and catch on, because it seems to be the method that have the lowest cost for energy return. Furthermore, with the increase in demand of clean energy there is also a decrease seen in its substitute, which are fossil fuels. As predicted and exemplified by the article many countries that depends on the production of fossil fuels and oil and seeing steady declines in GDP, and as it is becoming unpopular with the citizens of the world, it is harder for these oil producing countries to make a profit. These risks however, has not gone under the radar as more and more governments are catching up and starting to invest in clean energy, and we see one of the biggest oil producer in Saudi Arabia newly approving plans to develop 50 giga watts of renewable energy by 2030, as this is the only way to catch up with the trend and state relate in terms of global power and global influences.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 0 | Article link missing. |
| Article Relevance (10) | 0 | |
| Summary (20) | 15 | Can't really compare to article, so giving you benefit of the doubt. |
| Course Related Analysis (30-50) | 33 | Connection to idea of a backstop technology, and countries/firms wanting to be able to profit from the backstop important driver for change. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 58 |
Group #3
Summary:
The periods of below average temperature across the Okanagan this winter have highlighted the high cost of heating, in kelowna especially. The municipal government of Kelowna has therefore partnered with the Okanagan Regional Library and Fortis BC to provide tools for homeowners to identify areas of heating loss due to pooer insulation in order to reduce natural gas usage for heating.
The programn consists of two primary parts. The first part is the provision of thermal imaging cameras through the Okanagan Regional Library to allow homeowners to identify areas of poor insulation. The second part is a free kit consisting of a free draft-proofing kit containing electrical switch and outlet draw insulators, window insulation and weather stripping for doors or windows.
In addition to this, Kelowna reisdents will also qualify for discounts on products intended to improve thermal insulation at Canadian Tire, Home Hardware and the Home Depot until Mar. 13.
Analysis:
This programn is a response to the fact that the short run price elasticity of natural gas for heating is very low. People cannot reduce their reliance on Natural gas without substituting some other energy source for heating, reloacting to a warmer climate, or modifiyng the local climate. The first two are not economically feasable for most peoplem, while the 3rd is not technologically, and potentially not morally feasable. This programn instead seeks to reduce the usage of natural gas, and this the amount of money spent on heating, by taking advantage of Kelowna resident's demand for energy conservation. By direct subsidies from the municiple govermenet and coordinating organizations in the form of free to use equipment and reduced material costs through discounts, the up-front costs for increasing the energy effeciency of Kelowna homes is decreased, thus reducing the energy efficiency gap. It is potentially untrue that an increase in effeciency will cause a corresponding drop in usage/expenditure however. If improvments in thermal insulation in Kelowna are generally effective, the reduced usage and thus reduced cost of natural gas may simply encourage residents to burn natural gas at higher rates during periods of lower temperature than they had prior, as it is now sufficiently affordable to pursue more confortable conditions in periods of less extreme low temeprature.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 50 | I like your demand inferences. Nicely done. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 5 | Lots of spelling errors. |
| Total | 95 |
Group #4. https://calgaryherald.com/news/politics/braid-in-public-shift-kenney-says-alberta-has-to-go-green-over-time
Summary:
The Calgary Heard published this write up on Jason Kenndy's plan for the future of energy use, and shows there is a clear discrepancy between the premier of Alberta and Canadian residents. John wishes to be supplying the last barrel of oil that will be demanded, this is worrying for a lot of residents especially ones outside of Alberta. Jason's goal is to meet the increasing demand for crude oil and gas over the next 20 years. He realizes there is a shift going going on from the current usage of energy to a more sustainable and greener alternatives. A clean energy company conducted a poll and found 68% percent of residents think the Primer of Alberta disregradless transiting from Gas and a Oil to greener methods. This is quite surprising because 60-72% of residents want a change on how energy is made and used. John plans of continuing the oil sands for 50+ years or longer depending on demand, but what alot of citizens has overlooked is what he is already doing for renewable methods. Large investors want their money in the energy sector to be done in sustainable and reliable way. This showed Jason future projects would be needing different paths and he responded. He responded to this realization by investing Billions of dollars into a Solar power project. This also received 500million dollars from outside investment.
Analysis:
Consumption of energy is essential for everyday activies, doesn't matter if it is commuting to work or preparing food to eat. But the method of energy is used to a choice. Non renewable resources have alternatives already in place so a more predictable and sustainable future and ensue. This article was very interesting beacuse it shows Jason wanting to capitalizing on demand of Non- renewable resources, but at the same time investing billions into alternatives which will eventually take over. In 2017 89% of energy produced in Alertba came from non-renewable sources and 11% coming from solar and wind. The new projects that are already being built will hopefully increase the number of terawatts produced from Sustainable methods.
Alberta is still heavily focused on Oil and gas but there are alternative methods that can improve the efficient of Energy. Kelowna has approved a project to change all Street lights within a 5 year window. This is project will cost $1.1 million dollars in replacement costs to roughly 13000 street lights. Projections show the project will pay its self off within 8 years , due to less energy used as-well as savings on maintenance. This shows that there are alternative methods to current operations, that can result in a more efficient outcome.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 16 | |
| Course Related Analysis (30-50) | 20 | I don't see much connection to class concepts. This is more of a reproduction of some parts of the summary. In class we talked about the role of a backstop technology. That backstop, solar and wind, are becoming cheaper, threatening the profit that can be earned from oil and gas. Alberta has lots of oil and gas, and wants to try and sell it before it ends up having little market value. Jason Kenny is finally, in public, admitting that the transition will happen, but still wants to sell as much Alberta fossil fuel products as possible. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 6 | |
| Total | 62 |
Group #5
https://www.wri.org/blog/2019/08/good-news-bad-news-4-trends-us-energy-use
Summary:
The prospects of cutting down carbon emissions have always dominated energy consumption nationally and internationally. Over-dependence on fossil fuels – petroleum, coal and natural gas – has been one of the major reasons for high carbon emissions. Efforts to reduce over-dependence on fossil fuels are yielding some positive results, but are still faced with considerable challenges.
According to the World Resource Institute (WRI), the results in terms of trends in U.S. energy use are mixed. Firstly, total energy consumption is growing exponentially, reaching 101 quadrillion British thermal units by 2018. 80% of this is contributed by fossil fuels including natural gas, petroleum, and coal. The industrial and transportation sectors are still the leaders in oil consumption. It is evident that despite sustained efforts, fossil fuels still dominate energy sources, which is counterproductive as far as the war against carbon emission is concerned.
On the other hand, there are certain positive takeaways. Dependence in coal has significantly declined. In 2018, coal consumption was 687 million short tons (MMst), the lowest since the 1980s. Forecasts indicate that it is likely to fall to 567 MMst by 2020. As a result, the future of coal plants is bleak especially given the increase in the use of natural gas. Industrial, commercial, and residential sectors currently experience high consumption of natural gas. The shift from coal leads to a significant reduction in carbon emissions. Lastly, despite occupying a small portion of U.S. energy consumption, the use and consumption of renewable energy are increasing. By 2018, the consumption of renewable energy reached a record high of 11.5 quadrillion Btu. Capacity additions are improving the use of wind and solar energy.
Overall, the use of fossil fuels is still high, making the war against carbon emission a challenging one. However, the use of coal is declining while the use of natural gas and renewable energy sources such as wind and solar are increasing thereby cutting-down the emissions significantly.
Analysis:
According to Saha (2019), the United States set a relatively new record in terms of energy consumption where the country consumed approximately 101 quadrillion thermal units. Within this total, more than 80% were in the form of fossil fuels including natural gas, coal and petroleum. The growing consumption was predicted to affect climate change and the pace at which the U.S. is reducing its carbon emissions. Based on the monthly review by the United States Energy Information Administration (EIA) published in June 2019, the data indicated that sources of clean energy such as wind and solar are on the rise thus helping in reduction of carbon gas emissions. On the other hand, the shift from the use of fossil fuels is happening at a slower rate than expected. The main points addressed by EIA’s review include the phasing out of coal in the United States with the consumption of the energy source dropping below 700 million short tons in 2018 which was significantly lower than the levels attained at the start of the 1980s.
Another point was that the consumption of fossil fuels was being driven by oil with particular focus on the transport sector. This element highlighted the potential challenges that could face the mission of decarbonizing the world as petroleum use per day in the United States rose to 20.5 million barrels (Saha, 2019). However, the consumption of natural gas per day in the electric power industry has risen to around 82.1 billion cubic feet, thus setting a new record due to the increased demand for the commodity across all sectors. Finally, the use of renewable is growing, but still accounts for a very small margin in the entire energy sector. Despite the potential of renewable sources of energy such as solar and wind providing the much needed alternative, there is little focus given towards these areas as the United States remains dependent on fossil fuels.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 35 | Course concepts would include the backstop technology and substitution in markets. Somewhat analogously to the recycling example, there is a market for transportation services. These can be delivered by fossil fuel powered providers, or alternative providers. What is happening to the supply in these markets? |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 85 |
Group #6
https://www.visualcapitalist.com/the-worlds-projected-energy-mix-2018-2040/
Summary:
This article discusses how two different policies affect the projected global energy structure from 2018 to 2040. Since 1997, the International Energy Agency (IEA) has compiled the World Energy Outlook, a report that forecasts the future of energy production and consumption worldwide. IEA's forecast base on two policy options. The first is the stated policies scenario, the main idea of which is to reflect the impact of existing public policies. IEA provided the data corresponding to this strategy. Compared with 2018, oil and gas, other renewable energy sources, and now the proportion of global energy structure of bioenergy, nuclear, and hydropower will increase in 2040. The oil will be the most abundant energy source in 2040, followed by natural gas. Coal resources are consistent with 2018, and renewable energy will usher in a revival. The second scenario is the sustainable development scenario, which describes significant changes in the global energy system. According to the chart, the IEA's sustainable development plan is different from the status quo. Renewable energy for power consumption has increased, with Asia eventually accounting for more than half. Fossil fuel use has plummeted, and natural gas will remain stagnant. At the end of the article, the author believes that both situations are not predictions, but they are likely to occur and are a good starting point for investors and decision-makers. For two very different policies, governments, companies, and organizations should adjust their forecasts accordingly.
Analysis:
The main factors affecting energy consumption include GDP growth, population change, industrial structure change, the urbanization process, the lifestyle of residents, transportation development, new energy technology progress, and policy orientation.
This article proposes that, especially in developed countries, there are very similar characteristics between the transformation of industrial structure and changes in energy consumption. First, in the post-industrialization era, traditional industries are always withdrawing, and emerging technologies are capital-intensive industries. In terms of energy consumption structure, the proportion of coal and oil in the industrial sector has declined, and the balance of natural gas and electricity has increased. Secondly, the development of transportation has driven a substantial increase in transportation oil. In the commercial service industry and the daily consumption of residents, the proportion of coal and oil has fallen sharply. In contrast, the percentage of natural gas and electricity has risen dramatically. The position grew in the first place. Finally, despite the different portions of the urban population, per capita, energy consumption tends to stabilize when the urbanization rate reaches a certain level. Per capita, energy consumption declines in the later stages of urbanization.
The pace of development of non-fossil energy sources such as wind energy, solar energy, and nuclear power continues to accelerate. As developed countries completed the industrialization process ahead of time, the contradictions between resources, energy, environment, and economic development were exposed. Major developed countries have established relatively complete energy conservation and emission reduction policies and environmental regulations, which have played a role in curbing excessive energy consumption growth. The emission reduction and environmental protection measures adopted by developed countries have already achieved specific results, and have restrained the growth rate of total energy consumption to a certain extent.
In the future, the world ’s total energy consumption will grow at a low rate. Coal and oil consumption will be the peak. The natural gas consumption will maintain rapid growth, and the rapid development of nuclear and renewable energy will lead to a clean and diversified energy structure. Energy policies place greater emphasis on low-carbon and clean. The low-carbon pure event will be the theme of the future energy industry. Some countries have successively released plans to encourage honest and low-carbon energy development. More and more economies have proposed ambitious medium and long-term renewable energy development goals. Renewable energy development will lead to developed countries and will develop and developed countries.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 18 | |
| Course Related Analysis (30-50) | 35 | Could talk more explicitly about supply and demand, substitution, and the role of the backstop techology. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 83 |
Group #7
https://www.forbes.com/sites/daneberhart/2020/01/27/chinas-promise-to-buy-more-us-energy-probably-unachievable/#5f15485c400d
Summary:
The U.S and China have started negociations for a new trade agreement that proves to be a step towards ending the trade war. Under the new agreement China promises to increase imports of U.S energy products to $18.5 billion in 2020 and $33.9 billion in 2021. However, China is still maintaining its tariffs for U.S crude and liquified gas. Because of this, many believe that such a increase in exports to be unatainable. First, since China will keep their tariffs the U.S crude and gas will be more expensive in contrast to other exporters. Secondly, the agreement represents a drastic increase of U.S energy imports since currently China U.S energy imports totaled $4.3 billion. To be able to reach the desired goal of $18.5 billion the U.S will have to export 845, 000 barrels per day. This increase seems to be unlikely but some market observers believe that increasing the exports to 700,000 per day may be plausible.
Analysis:
In chapter 11 we discuss the structure of energy industry and we can see that the U.S oil industry, especially, is dominated by a relatively small number of firms. This fact tells us, as the article states, that an agreement with an influential market like China can be highly beneficial for the U.S producers and the U.S economy as a whole. Moreover, for the natural gas industry it would also represent a hihgly beneficial agreement because the China's demand over the next years is forecast to total 15 to 25 million tons. Since the natural gas industry is carried out by a larger number of firm the welfare benefit will be larger. As of today, the agreement is not plausible because of the tariffs that the Chinese government keeps and will continue to do so until the U.S administration or the U.S tariffs in other sectors are eliminated.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 17 | |
| Course Related Analysis (30-50) | 30 | Some more exploration of international markets and differential tariffs. Article talks about China's import from other sources. The tariff drives this. Could discuss. What about substitutes. If tariffs drive up price in China, how would the Chinese market respond. Develop alternative imports, and technological substitutes. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 8 | |
| Total | 75 |
Group #8
https://www.weforum.org/agenda/2020/01/the-future-looks-bright-for-solar-energy/
Summary
The article reports that the ‘Future looks bright for solar energy’ due to falling costs and new technology, which is improving efficiency. It reports that back in 2010, the ‘global market’ was small with high costs and dependent on subsidies through governments, mainly in Italy and Germany. This year ‘more than 115 GW’ of solar power would be installed, which would be more than other technologies together. It is a low cost power producing method, especially in sunnier regions where this is the ‘lowest cost form of electricity generation’. By 2030, improvements in technology will help solar become cost-effective and will become the ‘most important source of energy production’ in many parts of the world. It also states that, this will have ‘positive impact on the environment and climate change’.
It presents that, a new technology called the ‘tandem silicon cells’ will help with higher efficiency, which will help generate ‘1.5 time more power than existing’. It also reports that costs could halve by 2030. It reports that innovation will help to best integrate solar into our daily lives, which means ‘better power electronics and greater use of low cost digital technologies’. Also production innovation will help cut costs of expensive materials used in solar cell manufacturing, as well as modules that ‘capture solar from both sides’. All this concludes that, solar will become ‘unbeatable’ in comparison to other fossil fuels due to its cost its similar costs. It reports solar has many advantages including, ‘easy and quick to install, flexible’ and can be used to power anything ranging from large to small. This should encourage installations in coming decade, which would also be good for climate.
Analysis:
This article on Solar Energy is related to material covered in Chapter 11 as it is a renewable energy generation method. The World Economic Forum presents that the future looks bright for solar as it is reducing its costs at a fast pace and there is more technological innovation to improve efficiency in work, which will in turn will help to reduce costs further more and will also improve energy efficiency wherever the technology is being used. This will help Solar Energy to compete at a competitive level with other power production companies at a levied cost by 2030, this will help to lower market prices for customers. For sunnier regions in countries such as India, Australia, South Africa, this method of power production is the most cost effective as there is ample sun. Cost of utility-scale solar PV has decreased in almost all the countries mentioned, meaning Solar is making headway to become the new choice of power for populations.
It reports that due to it becoming cheaper, solar can become the most important source of energy for electricity, meaning there can be enough supply of Solar by that time to fulfill market demand and therefore let consumers enjoy low prices. Additionally, innovation in Solar sector has allowed to answer many issues such as high costs for producers, best ways to integrate solar in everyday life. This will help to improve efficiency and costs will be cut and there will more room to earn revenue through Solar projects.
Solar energy is also a positive effort towards our environment as it’s a renewable energy, decreases greenhouse gas emissions, helps the market move away from fossil fuels, helps to shrink our carbon footprint and has a long life. It is only a step towards fighting climate change as every step towards a better future count. For individuals, who will have solar energy, they will be able to save more on electricity bills, with little maintenance, easy and user friendly installations. For countries they will be able to achieve all the things mentioned above, however at a larger scale, which will have a larger impact on our environment.
| Category | Mark | Comments |
|---|---|---|
| Article Source (10) | 10 | |
| Article Relevance (10) | 10 | |
| Summary (20) | 20 | |
| Course Related Analysis (30-50) | 45 | Pretty good. Could connect a bit more to the idea of substitution, although indirectly you do. |
| Extended Analysis (0-20) | ||
| Presentation (10) | 10 | |
| Total | 95 |