With oil prices rising towards the historic benchmark of 100 dollars a barrel, fears of economic crisis are growing. Surprisingly, this might be exactly what we need to save the Earth's climate.
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Gasoline Price IncreaseA worker changes the prices of gasoline and diesel on a board at a gas station in Chengdu, China. China unexpectedly raised domestic gasoline and diesel prices by a tenth in November 2007, the first increase in 17 months, to address a worsening supply crisis (Photo: Reuters) |
The shock was massive. In 1973, Arab countries of the Organization of Petrol Exporting Countries (OPEC) caused a worldwide energy crisis by cutting oil production by five percent. Countries that supported Israel in the Yom Kippur War against its Arab neighbors faced a full-blown oil embargo. In a matter of months, oil prices quadrupled and fuel became scarce. Industrialized countries in Europe, North America, and Asia woke up to the bitter truth that they had been far too reliant on cheap oil.
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Many countries entered periods of economic stagnation and monetary inflation called “stagflation,” a phenomenon previously unknown to economists. Energy intensive industries struggled, while many countries cut their oil consumption in a desperate attempt to reduce dependence.
The United States rationed gasoline and introduced lower speed limits. Germany opted for Sunday traffic bans on all but the most indispensable rides. And many European countries introduced daylight savings time as a way to make better use of daylight and save energy.
The efficiency revolution
While many of this urgency measures had little effect on energy consumption, the long-term impacts of the shock did. With smaller and more efficient cars, Japanese carmakers began to gain traction in the U.S. and European markets. Western European car makers responded to the challenge and launched hatchbacks like the Volkswagen Golf and Ford Fiesta, small and fuel efficient models that had been virtually unknown in Europe before the oil crisis.
Brazil, importing about 80 percent of its crude oil in 1973, launched a new biofuel policy in the 1970s. The project called "Proálcool" involved mixing of ethanol and gasoline and the development of new motors that could burn such blends. As of today, Brazil meets around 40 percent of its gasoline demand with ethanol from domestically grown sugar cane.
Renewables: breaking the fossil fuel dependence
The energy sector tried to move away from oil towards nuclear power and natural gas. Home heating from natural gas and ethanol blended gasoline further reduced global demand for oil. Renewable energies also profited from the price shock. Solar power and wind energy started to attract interest.
In 1974, the U.S. government founded the Energy Research and Development Administration and started to invest heavily in solar power cells developed at Bell Laboratories since the 1950s. Within one year, the agency’s budget for solar, wind, biomass, and thermal projects rose from 35 million dollars to 167.5 million dollars.
“The proposal could, in its present form, see businesses producing biofuels by destroying rainforests and wetlands, not only threatening endangered habitats and species, but also releasing far more carbon into the atmosphere than could ever hope to be saved by replacing fossil fuels,” the organizations, which urged tougher regulation of the biofuels industry.
Sugar cane – sweet efficiency?
Biofuel can be made from all sorts of crops, including soy, rapeseed, and sugar cane. Depending on the source, the fuel gives different savings in greenhouse gas emissions. Sugar cane, for example, is believed to be the most efficient source for biofuel. The distilling process is fairly simple, and the energy required to heat the cauldrons comes primarily from burning dried sugar cane waste. Turning starch-based crops like corn into biofuel is more complicated. Corn or rapeseed also produce less biomass to fuel the refining process.
So far, biofuel production without subsidies has only been possible in a tropical climate with sufficient water supplies. Brazil, the world’s leading producer and consumer of biofuel, has been capitalizing on its favorable climate for decades. The country now produces about 16.5 billion liters of ethanol from sugar cane annually. Its per capita greenhouse gas emissions are less than half the world’s average. On the downside, 75 percent of the country’s carbon emissions stem from deforestation, which is partly fuelled by demand for agricultural land.
A vicious circle
Diana Profir of the U.S.-based think tank World Resource Institute says the rush for more arable land can accelerate deforestation. "It is one of these vicious circles,” she explains. “Palm oil has become a feedstock for biofuel and there is an increasing demand for it. So there is an incentive for developing countries, including Indonesia, to increase their rate in which they cut down forests.”
Vast areas of forest have already been cleared in Indonesia and Malaysia to make way for palm plantations. Orangutans are among the most prominent species losing their natural habitats as a result. Indonesia’s 90 million hectares of tropical forest represent 10 percent of the world’s remaining total, but it has already lost close to three quarters of its original forest cover.
Advocates say the long term success of biofuels will depend on next-generation products. Ethanol, for example, is currently made from starches and sugar, but scientists are developing technology to allow it to be made from cellulose and other fibrous plant materials. The hope is that technical developments will expand the range of materials that can be used to make biofuels, improve their efficiency, and help bring down their cost. For the time being, second-generation fuels are far too expansive to lighten the price pressure on food crops and the Tortillas market.
editor: Patrick Blum, Thilo Kunzemann
publishing date: September 19, 2007