Global Energy Systems Transition

Global Energy Systems Transition, (% of market)

Source: adapted from The Economist, February 10th 2001.

The usage of energy is in constant transition, particularly from a long term perspective. An energy transition is a change from one supply system to another, namely in terms of the fuels used, their sources and how they are brought to the market. A common pattern in energy transition involves moving to sources that have a higher energy content, but that require a higher level technical expertise to be used. In time, this has implied a growth of the quantity consumed, changes in energy sources and the usage of sources that tend to have a lower environmental impact. The first significant energy transition took place during the industrial revolution, which mostly involved the adoption of coal as the dominant source of energy. Even if there is a gradual transition away from petroleum, it still dominates global energy systems.

Several utility factors favor the usage of petroleum as the main source of energy in general, and for transport activities in particular:

  • Occurrence is the location of energy sources considering the demand. Several energy sources are only available when a transportation system able to transfer large quantities of the energy resource is available. The exploitation of oil fields in several regions of the World (Middle East, Siberia, etc.) was made possible when an efficient transportation system based upon pipelines and tankers was established.
  • Transferability. The distance over which an energy source can be transported depends on its physical form (solid, liquid or gas), energy content, and on the available transport technology. Most petroleum products are in a liquid, more or less viscous, form. They thus offer an efficient form to be transferred, which is less convenient than solids such as coal, but much more than gases. Furthermore, economies of scale in transportation, notably maritime, enhance transferability by reducing the unit costs.
  • Energy content. A low energy content is inadequate when demand is high and concentrated in space. Gasoline and other petroleum products have a high energy content compared to other fossil fuels like coal, but even more when compared to gravity (hydroelectricity) and solar energy.
  • Reliability. Continuous availability is an advantage over intermittent sources. The emergence of many sources and continuous supply through maritime and land routes has given a relative reliability for petroleum products.
  • Storability. An energy source has an advantage when it can be stored to answer variations in demands and interruptions of supplies. In liquid form, petroleum products are easily stored and several countries have built strategic reserves.
  • Flexibility. The capacity of an energy source to answer multiple uses is an advantage to energy sources that can fit a single purpose. In addition to providing energy, petroleum by-products are the basis of whole industrial sectors (petrochemical) that synthesize goods like plastics, fertilizers, pharmaceutical products and synthetic rubber.
  • Safety. Sources that can be provided and used at low risks (human and environmental) are an advantage. Although the petrochemical industry presents some risks (accidents during extraction, refining, transport and usage), oil is considered a safe source of energy for its production and usage.
  • Cleanliness. Sources that produce few waste and are cleanly used are an advantage. Relative to other conventional energy sources like coal, oil is cleaner to use and produces a limited amount of waste. Still, the use of petroleum products has negative environmental impacts such as the emission of particulates and carbon into the atmosphere.
  • Price. Low cost energy sources are generally preferred. Cost is a function of the occurrence, the transferability and the energy content of an energy source. With massive investments on large scale extraction, refining and transport of petroleum products, a constant supply and intensive competition from several oil producing countries, petroleum products prices are cheaper than many other sources.