THE WORLD IN 2025
ITT CONFERENCE
FORUM FOR GLOBAL KNOWLEDGE SHARING
GLOBALISATION OF CHINESE AND INDIAN ENTERPRISES
MUMBAI, NOVEMBER 2-3, 2007

Françoise Pardos, Pardos Marketing

Risks and opportunities

Yet the world is changing in many ways in the next 20 years and beyond, with major macro economic trends to continue in the long term, as long as nothing catastrophic happens to the world and to the planet. But even with no major catastrophe looming, there are many risks to unbalance any smooth forecast for the next twenty years.

Energy

We live in a world characterized by complexity, a world of geopolitical uncertainty, of questions about where our future energy supplies will come from, and of concerns about the risk of climate change.

One essential question may be the oil peak. Will it happen? When? Has it already happened? Will it go slow or fast? What imagination is needed to cope with the oil peak, or end of oil as an energy source?

Anyway, oil was not made for burning. Only Barbarians would burn this earth distillate, refined and cultured organics that took hundreds of millions of years to elaborate. Modern mankind operates like the worst hunters gatherers who had the excuse of ignorance, and burnt forests, killed wildlife for survival. The present world knows, or should, and must still endeavor to save this extraordinary oil, from which all petrochemicals and derivatives are made of, all of the last seventy year civilization.

When it comes to transportation fuels, for cars, jets, ships, trains, the most transportable, economic fuels, and the fuels with the highest energy content, are those that come from oil and gas. To some extent, the liquid fuel supply can be augmented by some bio fuels. But ethanol from corn, for example, has real limitations because it has an impact on the food supply.

The truth is that no combination of alternative fuels or systems for using them will permit to continue the Westernized way of life the way it is. There might be no combination of solar or wind energy, hydrogen, ethanol, tar sands, oil shale, methane hydrates, nuclear power, thermal depolymerization, zero-point energy, to really help continuing, especially the demand for transportation. The change is to rest on the ingenuity of finders, and the forced acceptance of the general public, but major changes will happen, no one yet knowing which way…

The key to understanding the challenge is admitting that other arrangements will have to be found for all the normal activities of everyday life.

For example, commercial airplanes are either going to run on cheap liquid hydrocarbon fuels or there is not going to have commercial aviation as it is now known. No other energy source is concentrated enough by weight, affordable enough by volume, and abundant enough in supply to do the necessary work to overcome gravity in a loaded airplane, repeated thousands of times each day by airlines around the world. No other way of delivering that energy source besides refined liquid hydrocarbons will allow that commercial system to operate at the present scale. The only reason this system exists is that until now such fuels have been cheap and abundant.

The same can be said about cars and the longer and longer commuting. The daily back and forth move of cars from suburbs to town centers is an absurdity, a major waste of time, human energy and sucking resources, which would seem ludicrous for an observer from Sirius.

All rich and all developing countries will have to make other arrangements for the basic activities of everyday life. In general, the circumstances faced with energy and climate change will require living much more locally. More of the food will be grown locally, on a smaller scale than now, with fewer artificial inputs, and probably with more human and animal labor. Farming may come closer to the domestic economic life than now. These changes are also likely to revive old social and class conflicts.

However, according to the oil industry, driven by growing prosperity in the developing world, global energy demand is projected to be close to 40 percent higher in the year 2030 than now, reaching close to 325 million barrels per day on an oil-equivalent basis.

According to the U.S. Geological Survey the earth was endowed with more than 3 trillion barrels of conventional oil. This estimate has grown steadily over the years as the oil industry has developed new and more sophisticated technologies to locate and produce these resources.

If the estimated frontier resources, such as heavy oil, shale oil, tar sands, are added, in spite of their cost and difficulties, this total will rise to over 4 trillion barrels. Considering that 1 trillion barrels of oil have been used in the history of mankind, the outlook for future supply is positive, so far.

After all, the Stone Age did not end for lack of stones, other techniques were found.

But the challenge of meeting future demand is broader than recognizing that the resources are available. They must also be accessible. In the United States alone, an estimated 31 billion barrels of recoverable oil and 105 trillion cubic feet of natural gas are currently ruled off-limits. Many of these restrictions are driven by concerns about the environmental impact of offshore production.

The issue of greenhouse gas emissions and climate change crosses all boundaries, impacts industry and governments, but most importantly will directly impact consumers in every part of the world.

The majority of the growth in energy demand will come from developing nations as their growing populations pursue higher standards of living. With this improvement in living standards will come most of the growth in future greenhouse gas emissions. But no one can deny the right of the emerging countries to improve their living standards, after the only model now known, that of the West. A new model has yet to be invented. There is no sign it is considered now, and maybe, with luck, the present model can be extrapolated, with no major hardships, for more decades.

By the years 2025-2030 it is expected that global emissions of carbon dioxide will approach 40 billion tons a year, up from close to 28 billion tons a year today. The impact of this on the widely reported, and controversial, climate warming remains open, as the earth climate is a very complex area of scientific study. Global climate change is still too uncertain to discuss as if it were only a result of mankind activities.

The many aspects of pollution and over exhausting resources are less dramatized, but they certainly are much more important and with far more devastating effects. There too, the world must be in search of a new model, after the transition years of 2025-2050. About which could be the new model, and whether it is to be a break or a continuing trend, is just too far away to assess. Back in recent mankind history, all prophets of doom have proved wrong, so, why should it be different by 2050?

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