Thursday, June 04, 2009

How to forecast global energy demand 

McKinsey has prepared a fairly cool and absolutely sobering interactive graphic that shows the impact of four variables -- global GDP, the fuel efficiency of light vehicles, the market share of electric vehicles over time, and regulation -- on global demand for energy and for oil until 2020, in each case broken down by developed and developing countries. Under any scenario -- including a severe economic downturn accompanied by much more efficiency and much more regulation (which may not, in the end, be compatible objectives) -- we are going to need a lot more of both. McKinsey's forecast is especially sobering insofar as the firm has put itself, as an organization, squarely in the "climate change is real and dangerous" camp.


By Anonymous Anonymous, at Thu Jun 04, 10:47:00 PM:

McKinsey knows which way the wind blows - in the current environment, it's all about adopting more regulations.

I wonder if McKinsey has the intestinal fortitude to republish those findings, with one revision - what would be the global supply of alternative energy if the profits associated with producing alternative energy are untaxed?  

By Blogger Kinuachdrach, at Thu Jun 04, 11:34:00 PM:

No surprise here. We live in a world where the population is growing, and where 2/3 of the human race is stuggling to climb out of poverty (i.e. increase their energy demand).

We live in a world where the frugal French (they're European, you know) consume more oil than the whole continent of Africa.

The only surprise is that anyone is surprised that global human energy demand is going to grow -- under any scenario short of the coming of the 4 horsemen of the Apocalypse.

Fortunately, there is an answer -- nuclear fission, proven technology for which there are known resources able to supply the whole human race with adequate power for about 2 millenia. Unfortunately, the western Political Class would rather you froze in the dark. But the Chinese will survive, as (surprisingly) will the nuclear-friendly French.  

By Blogger JPMcT, at Thu Jun 04, 11:58:00 PM:

I find it fascinating that the American Illuminati are so fervently opposed to the Blatant, Obvious solution to our power needs...nuclear power. Efficient, clean, endless supply...and just shoot the waste into the sun...no biggie.

Oh yeah...because it's plentiful and relatively cheap...it will liberate people rather than enslaving them in taxation, regulation and government oversight...I forgot. Clearly unacceptable to the Left.

So, in 20 years when all the "global warming" leaves us freezing in our beds at night...the Chicoms will be warm and toasty...and we will be out in the front yard blowing on our windmills.  

By Anonymous Stan/Tx, at Fri Jun 05, 12:48:00 AM:

Anon 10:47pm
“I wonder if McKinsey has the intestinal fortitude to republish those findings, with one revision - what would be the global supply of alternative energy if the profits associated with producing alternative energy are untaxed?”

I suggest that the correct question would be “what part of global supply would alternative energy fill if it were not subsidized by taxes?” The answer would be very little, if any.  

By Anonymous Nobrainer, at Fri Jun 05, 09:07:00 AM:

This is not all that surprising, and actually doesn't say that much because the time-horizon is so short.

It takes at least a decade, if not two, for a new regulation to become the norm on the street. Cars last a long time and it takes a long time to replace them. For example, for model year 1990, the median automobile lifetime was ~17 years.  

By Anonymous Anonymous, at Fri Jun 05, 10:02:00 AM:

Fun tool, even if the assumptions are buried beyond debate.

One conclusion the tool wants you to draw is that the developing world is the big issue ahead in energy consumption, and therefore in determining mans effect on climate change. Whichever permutation of inputs to the tool, the long term trend is for much larger consumption in the developing world, and it's probably much dirtier consumption from the perspective of greenhouse gas emissions than a similar consumption of energy in the developed world. If the developed world tries to prevent the expansion of developing economies, so as to avoid these impacts, then lots of strife is ahead.

If one believes in man-driven climate change, then one should devote one's entire existence, every day, to the mission of providing cheap, plentiful energy on a widely available basis to the developing world. If he really believes in man driven global climate change, Al Gore should move to Paraguay, or Sri Lanka, or somewhere very remote, where he can build nuclear plants. Or wind mills.  

By Anonymous Squealer, at Sat Jun 06, 04:40:00 PM:

Interesting, but I can't help get the impression the chart doesn't adequately take the rising cost of energy and other factors into account when calculating future economic growth. I suppose the assumption is all that energy will still be created at a relatively cheap price through the use of coal plants. But I have my doubts about that. Energy costs do not need to be high over a long period to change behavior and fertilize innovation. Gasoline was only at $4/gallon for a few months, yet the effect of that spike on policy and behavior has been overwhelming.  

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