What day is today? Someday in March 2010. Is there a crisis related to the supply, even the distribution of energy? I would say, hardly. No hard feelings, but we do not have to fear anything – for now. Really? Yes, well, prior to stepping forward into tomorrow let us review the situation for a moment, shall we? Energy makes sense, simply because it provides us with everything we need at anytime and sometimes even anywhere. It comforts us in many ways, starting from securing basic needs like shelter, food, light, mobility and, of course, communication. Certainly there are far more ways of spending energy on, in fact, countless paths can be taken to allay your hunger for it; we are now speaking of luxuries, whether in small, big or excessive quantities. So as long as you can secure whatever is achieved in energy demand you have the key to maintaining your life-style. Leaping forward from no-haves to haves is another key issue for a vast majority of people, longing for the same thing, maintaining whatever is obtained…
Energy comes in form of, mainly, electricity, fuel, and heat; fundamental things, yet so interlinked in today’s complex world. We do need them and will need them again and again. To sing a common theme, primary energy is always created foremost through energy production that strongly depends on fossil fuels or renewables. This then may imply a sort of limitation; are fossil fuels and renewables endless? And what is the corollary? And can this limitation tamper with the nowadays-perfect dance of business, commerce and our way of spending energy? Without any doubts, we are now entering a very contentious matter by raising such questions.
Let us remember what opinions the mavens of the last decades have expressed about centralized energy production: reliable and safe energy production in tandem with exploitation and distribution of secured fossil fuel provision. It is widely believed and constantly repeated that fossil fuels is not scarce. It is with so many promises that we began to feel like the boy who plugged the dyke with his fingers, only to find out leaks breaking out all around him. Abundance is everywhere and all the time.
The lights of the dark ages were based on firewood, turf and petroleum. Over the years we stumbled upon coal, crude oil, natural gas and even harnessed the power of the atoms. Centralized energy production was the key to successfully provide electricity to households and industrial areas alike. We were ‘smothered” with life-long promises about cheap and reliable electricity and even heat to keep households warm. Finally, and for the moment, perhaps most mysteriously, we never question the fuse of energy production and commerce. We simply rely on it. Are there any restraints related to the given centralized trivia, which, in fact, works so perfectly fine until now? Very often the argument goes that centralized energy production stifles innovation, and, consequently, competition, which goes alongside the emergence of decentralized energy production. Nothing in the argument of securing energy production, nor in the argument that most people make when talking about the subject of doing business as usual, should draw into doubt this simple point; competition, and the necessity to integrate a variety of different energy production solutions provided by variety of players.
Idea sharing is a self-propelling mechanism, which gives room to even more ideas, driving competition forward, and in case of free markets, grants contracts to secure energy production. Does that imply centralized energy production, operated by a few companies, squelches idea sharing, even competition? Hard to tell, yet currently, less than 20 mega-companies, both state and commercial-based, dictate the terms by which energy flows in our world. By centralizing power over the Earth’s energy resources, the energy companies create the very conditions that reward economies of scale, and centralization of economic activity, in many other industries.
As for today, and with the market already divided into strikingly homogenously acting monopolists, who follow the idea of protecting the given monopoly position; will if they are rational, be willing to spend the net present value of their monopoly to defend it. They are more than ready to shoot – even back.
Never aim if you are not ready to shoot
Does decentralized energy production supply key arguments to aim and shoot? Is there really a difference in business approach compared to successfully acting monopolists? Imagine the following:
You are standing at the side of the street. Your flat is on fire. You are definitely annoyed and upset because to some extend you helped start the fire. Next to you is a bucket, filled with gasoline. Most apparently, gasoline will not put out the fire.
As you ponder the overall mess, someone else comes along. In a panic mood, he grabs the bucket. Before you have a chance to tell him to stop – or before he realizes just why he should stop – the bucket is in the air. The gasoline is about to hit the already blazing flat. And the fire that the gasoline will ignite is about to ignite everything around.
The given example indicates how difficult it is to overcome commonly accepted models in nowadays world. You may not solve the energy production and distribution problem by using the same kind of approach you started that set up the problem. It may do mischief because everything around will be affected too. A gentle shift, towards a leaner, cleaner energy production and distribution is the key; starting with natural gas, that can be simply provided from a variety of sources – fossil fuel based, such as conventional natural gas, on coal mine gas and flare gas; and renewables, such as biogas and even landfill gas.
Getting started by accretion in the natural gas market
Natural gas is widely accepted as fossil fuel – with the lowest impact on greenhouse gas emissions if burned or converted to CO2. Oil produces one-third more CO2 than natural gas equivalent unit of energy produced, while coal produces two-third more CO2. More importantly, it is fast becoming the fuel of choice for the generation of electricity. It is also increasingly being used as a fuel for transportation, which, in fact, is crucial for tomorrow’s markets. New technological breakthroughs in converting gas-to-liquids have reduced costs and brought liquids gas to a range that is competitive with traditional commodities, such as gasoline and diesel. Without any doubt, natural gas is one of the key elements to help set up a decentralized energy production and distribution scheme – speaking globally, but acting locally.
Small-scale LMG contribution
As already pointed out in the article “Small is beautiful – LNG your life” LNG and its derivatives, such as LMG (Liquefied Methane Gas) and even LBG (Liquefied Biogas), might be the missing link between traditional commodities, i.e. coal, uranium, natural gas. Do we really need liquefied methane gas produced in small-scale quantities? Is not methane itself considered a traditional commodity?
The very beauty of small-scale LMG applications is the rapid response time between idea sharing and turn-key ready plant delivery. Response time is crucial in businesses where energy commodity prizes are becoming even more volatile in the upcoming future as today. Everything turns to be uncertain, yet energy production and distribution MUST be secured, but not by using old business models. Moreover, LMG is a respected way of energy storage and easy to transport as it will use an existing infrastructure. Small-scale LMG applications follow the philosophy of mainly off-the-shelf-components, which is an intrinsic part of doing business in the future due to small prices and increased competition. More than that, the utopia of LMG is inherently plausible because LMG is the fuel-of-all-trades, the general-purpose-fuel: it can be produced in many ways but stored and distributed in only one.
How many days left until the energy crisis?
We have pulled down the stars to our will, one may argue, why not secure energy supply, production and distribution on a global scale without incurring any crisis?
What day will be tomorrow? Someday after dawn. So will there be a crisis related to the supply, even the distribution of energy? Easy to tell, if you use the missing link between traditional and renewable energies.