1. Environmental and Natural Resource Economics
3rd ed.
Jonathan M. Harris
Updates for 2012
Chapter 13: Energy
Copyright © 2012 Jonathan M. Harris

2. Figure 13.1 Global and U.S. Energy Consumption 2010, by Source
Global and U.S. energy consumption is primarily fossil fuels, with renewables supplying only a small percentage.
Sources: Energy Information Administration, 2011; International Energy Agency, 2011b.

3. Table 13.1 Net Energy Ratios for Various Energy Sources
Oil (global) 35
Natural gas 10
Coal 80
Shale oil 5
Nuclear
5-15
Hydropower
>100
Wind 18
Photovoltaic cells
6.8
Ethanol (sugarcane)
0.8 – 10
Ethanol (corn-based)
0.8 – 1.6
Biodiesel
1.3
Oil, coal, and hydropower have the highest net energy ratios, while ethanol has a very low energy ratio. Wind, photovoltaics, and nuclear have intermediate net energy ratios.
Source: Murphy and Hall, 2010

4. Table 13.2. Energy Consumption by Sector in the United States, 2010
Transportation
Industrial
Residential and Commercial
Electricity
Percent of Total Energy Consumption
28%
20%
11%
40%
Primary fuel source
Oil (94%)
Natural gas (41%)
Natural gas (76%)
Coal (48%)
Secondary fuel source
Biomass (4%)
Oil (40%)
Oil (18%)
Nuclear (21%)
Tertiary fuel source
Natural gas (2%)
Biomass (11%)
Biomass (5%)
Natural gas (19%)
U.S. energy use is divided between residential, commercial and industrial, transportation , and primary electricity sectors. The transportation sector in particular is primarily dependent on oil, while most coal use is in the electricity sector.
Source: Energy Information Administration, 2011.

5. Figure 13.2 World Energy Consumption, by Source, 1965-2011
Since 1965, world energy use has grown dramatically, with the overwhelming majority of energy use drawn from fossil fuels. The trend has continued into the twenty-first century, with a recent upsurge in both coal and oil consumption.
Source: British Petroleum, 2012

6. Figure 13.3 Projected 2035 Global Energy Demand, by Source
“Business as Usual” projections show world total energy consumption continuing to rise through The increase is much less with an aggressive conservation/efficiency scenario, allowing a greater percentage to be supplied by renewables.
Source: International Energy Agency, 2011

7. Table 13.3 Energy Consumption per Capita, 2009, Selected Countries
Energy consumption per capita varies widely, with U.S. per capita consumption about 15 times that of India, and 60 times that of Nigeria. China’s per capita energy consumption has risen rapidly; it is now at about half of European levels, though still less than a quarter of U.S. levels.
Source: U.S. Energy Information Administration, International Energy Statistics database

8. Figure 13.4 Past and Projected Energy Consumption, OECD and Non-OCED Nations
Although current per capita consumption of energy in the developed countries (OECD, or Organization for Economic Cooperation and Development) is much higher than per capita consumption in the developing world, future growth in consumption will be primarily in non-OECD nations.
Source: U.S. Energy Information Administration, International Energy Statistics database
Note: The OECD is the Organization for Economic Cooperation and Development, an organization of mainly developed nations.

9. Figure 13.5 Oil Prices in Constant Dollars, 1990-2010
Oil prices have recently risen to levels equaling those of the “oil crisis” of the late 1970s in constant dollar terms.
Sources: Data from Energy Information Administration and

10. Figure 13.6 United States Domestic Oil Production and Consumption
The trend of declining U.S. crude oil production continued through 2008, with an uptick in resulting from increased production of “unconventional” sources such as deep offshore oil and shale oil. After declining during the recession of , oil consumption is once again on the increase.
Source: U.S. Energy Information Administration, Annual Energy Outlook database

11. Figure 13.7 Past and Projected Global Oil Production
Estimates of ultimately recoverable global oil vary widely, and the year of projected “peak oil” production depends on these estimates. The study shown above indicates a peak in conventional production by 2010, with production from current fields falling off rapidly thereafter. Future oil production depends on discovery of new fields, natural gas liquids, and “unconventional” sources such as shale oil. Environmental costs of unconventional sources tend to be high due to their dispersed nature: large volumes of water, wastes, and CO2 emissions are involved in their production.
Source: International Energy Agency, 2010.

12. Table 13.4 Global Oil Reserves, Consumption, and Resource Lifetime, 1980-2011
Year
Proven Reserves (billion barrels)
Annual Consumption (billion barrels)
Resource Lifetime (years)
1980
683 22 31
1981
696 32
1982
726 21 34
1983
737 35
1984
774 36
1985
803 37
1986
908 41
1987
939 23
1988
1027 44
1989 24 43
1990
1028 42
1991
1033
1992
1039 25
1993
1041
1994
1056
1995
1066 26
1996
1089
1997
1107 27
1998
1093 40
1999
1238 28 45
2000
1258
2001
1267
2002
1322 29 46
2003
1340
2004
1346 30
2005
1357
2006
1365
2007
1405
2008
1475 47
2009
1518 49
2010
1622 51
2011
1653
Despite increasing production, the estimated lifetime of global oil reserves has actually increased due to new discoveries.
Source: BP, 2012, Statistical Review of World Energy database

13. Table 13.5 Availability of Global Renewable Energy
Energy Source
Total Global Availability (trillion watts)
Availability in Likely-Developable Locations (trillion watts)
Wind
1700
40 – 85
Wave
> 2.7
0.5
Geothermal 45
0.07 – 0.14
Hydroelectric
1.9
1.6
Tidal
3.7
0.02
Solar photovoltaic
6500
340
Concentrated solar power
4600
240
Theoretical availability of renewable energy is very large, although much of this is not in easily developed locations. Nonetheless, the amount available in developable locations considerably exceeds total expected global demand for energy.
Source: Jacobson and Delucchi, 2011a.

14. Table 13.6 Infrastructure Requirements for Supplying All Global Energy in 2030 from Renewable Sources
Energy Source
Percent of 2030 Global Power Supply
Number of Plants/Devices Needed Worldwide
Wind turbines 50
3,800,000
Wave power plants 1
720,000
Geothermal plants 4
5,350
Hydroelectric plants
900
Tidal turbines
490,000
Rooftop solar PV systems 6
1.7 billion
Solar PV power plants 14
40,000
Concentrated solar power plants 20
49,000
TOTAL
100
To take advantage of renewable energy potential requires major investments in energy infrastructure.
Source: Jacobson and Delucchi, 2011a.

15. Figure 13.8 Levelized Cost of Different Energy Sources, United States (2016) and Europe (2015)
Wind and geothermal are nearly cost competitive with traditional power sources, as represented by conventional coal.
Sources: U.S. Energy Information Administration, 2011c; International Energy Agency, et al., 2010; Parsons Brinckerhoff, 2010; Department of Energy and Climate, 2011.

16. Figure 13.9 Cost Comparison of Renewable Energy Sources to Fossil Fuel Electricity Costs
Wind and geothermal are close to competitive with current wholesale prices of electricity. Solar photovoltaic is more costly, but since solar photovoltaics can be installed by individual consumers the price of PV only needs to fall to the retail power price to be competitive.
Source: International Energy Agency and Organization for Economic Cooperation and Development, 2007.

17. Figure 13.10 Declining Cost of Solar and Wind Energy
Technology has driven down the price of renewable energy sources such as photovoltaics. This has led to an exponential increase in production and use, but (as noted in earlier slides on energy sources) starting from a very small base as a percentage of total energy production.
Source: National Renewable Energy Laboratory. Renewable Energy Cost Trends.

18. Figure 13.11 Past and Projected Price of Oil
The future price of oil is extremely uncertain. Higher price scenarios would make renewables more cost-competitive. Note that these price projections do not include any policies to internalize fossil fuel externalities.
Source: U.S. Energy Information Administration, 2012.

19. Figure 13.12 Externality Cost of Various Electricity Generating Methods, European Union
Externality costs are highest for coal, followed by oil and natural gas. Externality costs for renewables are generally low.
Source: Owen, 2006

20. Figure 13.13 Cost of Electricity Generating Approaches, 2020
Adding in the costs of externalities changes the balance of cost competitiveness, making conventional source more expensive than renewables.
Source: Jacobson and Delucchi, 2011b

21. Figure 13.14 Electricity Prices and Consumption Rates
There is a general negative relationship between price and electricity use, with the U.S. and Canada having the lowest prices and high per-capita consumption, while Germany and Denmark have high prices and relatively low consumption.
Sources: Energy Prices and Statistics database, International Energy Agency; International Energy Statistics database, U.S. Energy Information Administration

22. Figure 13.15. Global Potential for Energy Efficiency
Under a BAU scenario, global energy demand is projected to nearly double between 2003 and However, based on the untapped potential for energy efficiency, global demand could be held steady during this time period or even see a slight decline.
Source: Blok, et al., 2008.