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| Alternative Energy: It's Not for Everybody |
| Clean energy for one country could spell disaster for another |
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Michael G. Gallagher (podkayne56)  |
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Published 2007-08-18 13:37 (KST) |
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Before I go any further, I'd like to say one thing right up front. I think alternative energy is a grand idea. I have fantasies about my country's deserts (I'm American) being covered by massive solar farms, and my nation's long and beautiful coastlines sprouting windmills by the thousands. I have Sci-Fi visions of millions of zero-emissions vehicles clogging America's roads in gloriously carbon free traffic jams.
But the embrace of clean energy by some could mean economic depression for others. After all, what are all the countries whose economies depend on fossil fuel exports going to do when technological advances and the threat of climate change eventually makes their main source of export income obsolete?
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FROM THE SECTION |
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| And whether alternative energy's big day arrives next year, five years from now, or even 15 years from now, it will arrive. A recent issue of Wired Magazine reported that by 2012, 68 models of hybrid-electric vehicles will be available to U.S. consumers. The big American industrial firm Dupont has signed a deal worth up to $100 million with the U.S goverment to develop solar cells with a conversion efficiency of 50 percent. And the European Union has announced plans to make biofuels 10 percent of its motor fuels mix by 2020, up from 1.6 percent today.
President Hugo Chavez of Venezuela has big plans for his country's oil reserves, not only does he want to build an extensive social safety net for his nation's 27 million people, he wants to use Venezuela's oil wealth to mount a credible challenge to U.S. influence in Latin America.
But Hugo Chavez's rosy view of his country's prospects could be easily be darkened by any sudden drop in the price of oil. Exports make up 35 percent of his nation's $109 billion GDP, with oil sales providing 82 percent of that total.
Of Iran's 2005 GDP of $193 billion, $56 billion comes from exports. Ninety percent of the export revenues flowing into Tehran's coffers comes from oil.
For Iraq, riven by violence since the fall of Saddam Hussein in 2003, oil made up 99.5 percent of its 2005 export revenues of $24 billion.
Very few oil exporting countries produce any other products that come even close to filling the gap in their financial ledgers that a big drop off in oil revenues would create. Manufactured goods comprise only 1.5 percent of Nigeria's export mix. Iran's export position is only slightly less marginal; 6.7 percent of its exports come from manufactures. Algeria and Iraq's export positions are even worse, with 1 percent Algeria's and a truly pathetic 0.2 percent of Iraq's export cash coming from manufactured goods. All the rest come from fuel exports.
And the vast majority of oil producing states don't have the independent scientific and technological base necessary for them to develop the high-value manufactured goods they would need to trade with the developed world for advanced energy technologies. Many oil producing states could find themselves in desperate trap: they would be trying to import altenergy tech by selling an asset (their oil) which would be declining in value just at the time they would need maximum revenues to make the switch to the new energy technologies.
Under the late Saddam Hussein, Iraq before the 1991 Gulf War had developed an extensive research and development capability, but the thousands of Iraqi scientists and engineers working for the Hussein regime were employed in weapons research, not in developing products that could substitute for Iraq's oil revenues. Present day Iran is also working hard to develop a large, independent R&D capability, but once again, like Iraq, that capability is devoted to making weapons, and not to anything that can reduce Tehran's overwhelming dependence on oil exports.
As for Hugo Chavez's Venezuela, there are no high-tech firms springing up along the banks of the Orinoco River waiting to take up the economic slack when the price of oil inevitably drops because of technological advancement.
Russia is another major oil producing country that could find its finances stressed with the widespread introduction of new energy technologies. With a GDP of nearly $800 billion, Russia is now in the middle of an oil-driven economic boom. Eighty percent Russia's export money comes from oil.
Unlike most other energy exporters, however, Russia does have a big manufacturing sector. In 2005, 23.2 percent of the country's export revenues came from manufactured goods. Unfortunately, a big slice of that money came from selling weapons sales. Russia sold $6.5 billion worth of weapons in 2006. But no matter how lucrative hawking weaponry may be, it's not going to be able replace Russia's reliance on pumping oil.
The Russians are certainly aware of their heavy dependence on fuel exports. In April of this year, the Russian government announced that it was planning to spend $1 billion over the next three years to develop a Russian nanotechnology industry with the aim of eventually reducing Russia's overreliance on energy exports. But despite their recognition of the problem, the Russians may find it very difficult to wean themselves from the easy money provided by petroleum exports, not to mention weapons sales. Kalishnikov rifles and Mig fighter jets are more the symbols of Russian industrial prowess than kinder and gentler products like cellphones and notebook computers.
Disruptions in the political and economic life of oil producing nations could follow closely behind any major switch by their customers to alternative energy. Divided between a Muslim North and a Christian South, Nigeria simply has no reason to exist as a united country without its oil fields.
Russia, without the massive cash flow provided by its oil and natural gas reserves would be forced to rely for its continued economic existence on the far skinnier profits generated by other raw material exports and its none too competitive factories. Sliding incomes could drive the Russians to peddle their military hardware at fire sale prices in trouble spots around the world.
Doing the big switch to alternative energy is often described in the West as one of the best ways to pull the teeth of Islamic radicals. “Starve the beast” is the phrase often used when talking about using new energy technology to counter the jihadis' ready access to Middle Eastern oil money.
But mortally wounded predators don't die easily, and any large-scale switch to alternative energy may cause a violent backlash from jihadi organizations as they see Islam's only real claim to importance in world affairs slowly turned into abandoned oil derricks and supertankers rusting away at dockside. The jihadis see themselves as the only true defenders of Islam. They aren't going to sit back and do nothing as the culture they've sworn to defend with their lives is transformed into a collection of dusty museum exhibits.
And the switch to alternative energy doesn't have to be anywhere near 100 percent to put a big crimp in the finances of most oil-producing nations. Even a scenario where just 20 percent of the world's gasoline consumption is replaced by biofuels is going to induce a bad case of chills in the economies of many oil-producing states.
Another ugly fact that will become more apparent as time goes by is something that was mentioned earlier -- most fossil fuel exporting countries are technology consumers, not technology producers. Even if the developed countries banded together to give energy producers like Algeria free hydrogen fuel cells and solar panels, those states still aren't going to have anything to sell that will compensate for the shutting off of the oil spigot.
In 2025, many people in Iran or Nigeria may have safe, clean reliable sources of energy for their tar paper shacks.
The birth of an alternative energy economy is necessary from the twin standpoints of environmental protection and international energy security. But don't be too surprised if many people refuse to wish the new baby a long and happy life.
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