Globalization: an 'Energivorous' System

Globalization: an 'Energivorous' System
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    FACULTY OF POLITICAL SCIENCES Master’s degree in International Relations   Theories of Globalization Globalization: an Energivorous   System Prof. David Held Marco Paneni 618342 ACADEMIC YEAR 2011/2012   2 Introduction Supplying enough energy on a reliable basis at prices that will not hobble world economic growth is an emerging challenge. In fact energy demand is rising due to the increased needs of developing countries and the increased consumption of industrialized ones. Nonetheless energy demand is closely connected to population growth: in the opening of the twenty-first century worldwide population accounted for over six billion people, in comparison to the figures prior to the Industrial Revolution reporting only one billion. According to experts’ estimates by 2050 the world population could reach 10 billion. 1  In the event of this types of massive and rapid increases the world would, and had, experienced enormous consequences: accelerated urbanization, growing consumption of real food, water, resources and territory. Energy is a topic that has undergone substantial changes, just as the result of globalization. Market economies are based on production, consumption and economy growth. As a consequence, the growth of energy consumption caused acceleration of the processes of exploitation of resources and of their transformation. Instances of globalization have led to  behave as if there were no physical limits to energy consumption, considered as a factor of  production available in an unlimited extent 2 . As a matter of fact globalization is a system that we can define as “ energivorous ” (or energy-consuming) since it is based on a continuous and exponential growth in demand (and supply) of energy. Such a growth is based on the use of an energy mix made up of several components, constantly evolving but essentially relying on the exploitation of resources like fossil fuels (coal, oil and gas) 3 . Another important aspect was the increase in the flow of goods which has in turn raised energy costs. Moreover, the reduced availability of fuels has increased energy value. In fact, the last 15 years have been marked by continuous growth in the price of oil and natural gases as never before. Here lies the problem. An era of supply-demand mismatch is looming. As a matter of fact,  places with greatest demand cannot supply their own needs autonomously. Over the next few decades, oil and gas production in the North Sea, North America, and China are expected to 1  Gianfranco Lizza, Scenari geopolitici , Utet Università, 2009, pag. 68 2  David Held and Anthony McGrew, Globalization theory  –   Approaches and Controversy , Polity Press2007, pag. 107. 3  Nicola Armaroli and Vincenzo Balzani, The Future of Energy Supply: Challenges and Opportunities , Renewable Energies, 2006.   3 fall, or rise too little to keep the pace with current demand. Only a few places all over the world have surplus reserves - chiefly the Middle East, Africa and Russia. Meanwhile, massive infrastructure additions are required. New constructions, repairs, and upgrades are imperative all along the energy supply chain, from oil and gas branches to  pipelines and tankers to power plants and grids. Nevertheless, forecasts suggest costs will be substantial  –   the International Energy Agency estimates a $16 trillion flow between now and 2030 4 . Among the most critical needs are new production and transport facilities in the Middle East, Africa, and Russia, none of which can muster the necessary capital on its own. Decision-makers within the energy industry, government, and international agencies thus face difficult decisions. Furthermore the proven reserves of fossil fuels are progressively decreasing, and their continued use produces harmful effects, such as pollution that threatens human health and greenhouse gases associated with global warming. As a consequence, we have to deal with the re-emergence of the environmental issue that is affecting energy policies in strategic, technical and economic terms. The exploitation of resources and energy supply are in fact able to influence the environmental, social and economic destiny of developing countries and can also decide the future of the richest ones, playing a crucial role for their competitiveness in the international arena. In these terms, energetic sustainability may be treated by the International Community as an opportunity rather than a threat, making it a new tool that would help regulating and coordinating future strategies. Fossil Fuels The primary issues of the global energy scenario are on one hand the scarcity of resources compared to the level of demand and on the other the constant growth of this energy demand, which in the last half century has not had substantial interruptions. 4  http://www.eia.gov/    Fossil fuel reserves-to-production (R/P) ratios at end 2010 Modified in Eni.com   4 In the early twenty-first century, the three different hydrocarbons (oil, coal, gas) alone accounted for 81% of all energy sources used on the planet 5 . The major industrialized economies of the West (USA and Europe) and Asia (China and India) were all net importers. The only exception was Russia, a major exporter of oil and gas mainly towards Europe. Due to the severe financial and economic crisis that, since 2008, has hit the world economy there has been a setback compared to normal growth. However, there is no doubt that the global energy scenario, at least until 2030, will be characterized by a recovery in demand, due to the increase of population and rapid economic development in the LDCs. A growth of 1.5% per year in demand is expected for primary energy, with an overall increase of 40% by 2030. This is mainly due to demand from to developing countries in Asia and in the Middle East 6 . Despite the development of renewable energy and low CO2 emissions technologies, as a result of the global politics in favor of reducing greenhouse gases to combat climate change, the main sources of primary energy will remain fossil fuels, with an incidence of 75% at least until 2050 7 . Coal Demand for coal is expected to grow due to the Chinese and Indian industrial systems that massively use it 8 . Since 2009, China, while remaining the largest coal producer in the world (it produces 43% of the total) have not only begun to fully utilize domestic production, but also import coal from abroad. The same situation characterizes India, which is the third largest coal producer in the world, but in 2010 began to import 20% of all coal consumed for running their own industries and especially for generating electricity. 5  International Energy Agency, World Energy Outlook 2010 , OECD/IEA 2010. 6  Ibidem 7  Ibidem 8  http://www.eniscuola.net/en/energy/contenuti/coal/#title   Coal consumption  - modified in World Energy Outlook 2010 (IEA)   5 Oil Once again, China will play a key role, being already heavily committed in Africa, Latin America and Canada. Originally exporter of oil, China depends on imports in this sector since 1993 9 . This is due to the boom of  private transport, which brought the volume of cars on the road to grow extraordinarily, with an annual growth rate of 19%. Latin America and Africa will be extremely important. Africa in the coming decades will be very strategic despite that the proven oil reserves in Africa amount to only 9.7% of the world. Since 2004, the discovery of new oil wells and the more methodic exploitation of those already operative have meant that African production has grown at a rate exceeding 3% per annum 10 .  Gas With respect to gas, as estimated  by the IEA, the global demand for natural gas will grow from 3000  billion cubic meters consumed in 2010 to 4300 billion cubic meters in 2030, with an annual average increase of 1.5% 11 . Moreover, most of the increase between now and 2030 is attributable to non-OECD countries with a particular peak in the Middle East even though the record goes to China and India.   Realistically, in the next century fossil fuels will remain by far the dominant source of energy on the planet. This is also due to the driving force that in coming decades Asia will play in the wake of both population and economic growth. 9  Gianfranco Lizza, Scenari geopolitici , Utet Università, 2009, pag 201 10 Ivi, pag. 204 11  International Energy Agency, World Energy Outlook 2010 , OECD/IEA 2010. Oil consumption  –   modified in World Energy Outlook 2010 (IEA) Natural Gas consumption  –   modified in World Energy Outlook 2010 (IEA)
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