Environmental Engineering Reference
In-Depth Information
oil prices, nations such as the United States and Germany adopted more
aggressive renewable energy promotion policies.
31
On the other hand, if
oil prices are too low, oil producers squander proit opportunities because
the demand for oil is relatively inelastic between the $30-$60 per barrel
range.
32
Consequently, the oil producing nations have sought to maintain
a balance that optimizes proitability without precipitating a shift to alter-
native energy forms. However, the demand for oil has escalated over the
past decade to the point where oil producers have lost control of the mar-
ket.
33
Opening the supply taps in order to maintain low enough oil prices
to discourage adoption of alternative energy sources has simply accelerated
depletion of oil reserves.
34
Robert Hefner, the founder of the GHK Company which specializes in the
development of natural gas projects sums up the coal and oil situation thusly:
Unfortunately, our existing energy infrastructure and its principal fuels of coal
and oil are basically 18th, 19th and 20th century technologies that have not
changed that much and can no longer meet our 21st century needs.
35
Natural gas is increasingly viewed as an attractive substitute for oil in
many energy applications due to superior combustion eiciency and lower
CO
2
emissions. On average, in comparison to electricity generated from
coal, natural gas emits less than half the CO
2
for every kilowatt hour gener-
ated.
36
he IEA anticipates that between 2007 and 2030 global demand for
natural gas demand will increase by 41%, with the power generation sector
accounting for 45% of this increase.
Unfortunately, the supply of natural gas exhibits the same undesirable
characteristics as the supply of oil does. For starters, the nations that have
rich reserves of natural gas are almost as unstable as the oil-producing
nations. In fact, in many cases, they are one and the same in that natural
gas and oil are frequently found in combination with one another.
37
Russia,
for example, which is the number one producer of oil in the world, is also
the number one producer of natural gas. It possesses 26% of global natu-
ral gas reserves and has demonstrated a propensity to use this resource for
political gain and to exploit periods of high demand to gouge consumers.
38
For example, a week prior to the conclusion of negotiations over the Black
Sea Fleet in 1993, Russia cut natural gas supplies to the Ukraine by 25%.
In 1998, it threatened to curtail natural gas provisions to Moldova unless
Russia was permitted to retain troops in a breakaway region of the country.
hen, in 2006 and 2008, Russia again cut of gas supplies to the Ukraine
in the middle of winter when the Ukraine refused to renegotiate a favor-
able contract that they had in place for Russian natural gas. Russia exhibited
