7.5.2: Background - From Fossil Fuel Boom to Energy Transition

Learning Objectives

By the end of this section, you will be able to:

• Identify efforts toward a new global "energy transition"
• Recognize major international organizations related to the management of global energy

The Looming Specter of Climate Change

Over the last two to three centuries, humans have drawn from a growing menu of energy sources. This has fueled unprecedented human population growth and prosperity but also deep inequalities and crises. Innovations in the harnessing of energy have brought revolutions in transportation, communication, the organization of local, national, and global economies, and urban life. Billions of people have higher material living standards than their predecessors two centuries prior. Yet these energy revolutions have come at a steep price, some of which is becoming increasingly evident in our age of climate change.

Up until the Industrial Revolution of the Eighteenth Century, humans relied primarily on biomass (firewood, manure, and charcoal) as well as domesticated animals and human muscle power for energy. Wind and moving water were also sources of energy, for example to power grist or grain mills. But by the Nineteenth Century, a transition was underway to coal as a cheaper and more abundant fuel source. In 1800, coal was less than 2 percent of the energy mix among industrializing economies. By 1880, it had jumped to over 26 percent and reached 54 percent by 1920. Coal fueled many key inventions of the Industrial Age, including the steam engine.

Coal as a percent of the energy mix of industrializing countries, 1800-1940

Year	Traditional biomass, as a percent of total energy mix	Coal, as a percent of total energy mix
1800	98.3%	1.7%
1820	97.6	2.4
1840	95.1	4.9
1860	86.8	13.3
1880	73.0	26.7
1900	50.4	47.2
1920	38.4	54.4
1940	31.6	50.7

Table 10.2.1: Coal as a percent of the energy mix of industrializing countries, 1800-1940 (CC BY-NC-ND 4.0; Data source: World Economic Forum and Visual Capitalist)

During this boom in coal demand, inventors and speculators began to exploit another major energy source, oil. The first commercial oil well was drilled in Pennsylvania in 1859. Lagging behind oil but rising in prominence during the Twentieth Century was natural gas, which required new technologies to extract, transport, and use. By 2000, coal was approximately a quarter of the industrialized world’s primary energy source, oil was one-third, and natural gas was one-fifth. Together these added up to just over three-quarters of the total energy mix, with the remaining quarter comprising biomass, renewables such as wind and hydropower, and nuclear power (Bhutada, 2022).

Exploitation of these new energy sources, combined with more intensive use of energy worldwide, has one critical consequence: the release of greenhouse gases. Greenhouse gases include carbon dioxide, methane, and nitrous oxide. The burning of coal and oil-derived gasoline emits substantial amounts of carbon dioxide, while natural gas emits a great deal of methane, among other greenhouse gases. These greenhouse gases absorb radiation reflected from the earth and create an effect similar to the warmth created by a greenhouse, in this case trapping heat around the planet. One effect of this warming is a change in the balance of frozen and liquid water on the planet; polar ice sheets and glaciers have been retreating in recent decades, which has led to rising sea levels and shifts in marine ecosystems. This has been further exacerbated by ocean acidification as higher concentrations of carbon dioxide in the atmosphere are absorbed into the oceans.

Figure 10.2.1: Due to climate change, polar bears are facing a shrinking world as polar ice caps melt and their natural habitats disappear (CC BY-NC 2.0; Tim Ellis via Flickr)

The connection between greenhouse gases and climate change has been theorized and studied since the Nineteenth Century, but it was in the 1950s that U.S.-based scientist Charles David Keeling generated the first high-accuracy measures of carbon dioxide in the atmosphere. With these measurements, he could demonstrate that human use of fossil fuels was causing climate change (Le Treut et al., 2007). The link between human activity and climate change is now established scientific fact.

Climate change has meant a dramatically changing planet for humankind: more severe weather events, inundation of coastal zones and island communities, shifts in the ecosystems of flora and fauna throughout the planet.  For humans, this will affect fundamental issues such as where and how we live, where we grow food, and what changes are needed in our global energy profile.

Twenty-first Century Energy Transition

We continue to live in a world devoted to intensive fossil fuel use, but this devotion is waning. Peak global demand for oil is projected to occur by the end of the 2020s. This may be followed by peak global demand for natural gas by the end of the 2030s (International Energy Agency, 2023). Such predictions tend to have high bands of uncertainty around them, however, given the volatility of global demand and the intervening effect of unexpected global events.

As awareness of, and anxieties over, climate change grow, calls for a global energy transition have become more urgent. An energy transition is the movement away from one primary energy source to another. This entails the development of relevant technologies and markets for the newer energy source(s). In the present century, this transition must be from the world’s heavy reliance on fossil fuels to more sustainable, renewable sources of energy.

One theme that might be gleaned from past transitions is that each energy transition carries intended and unintended consequences. Great excitement accompanied the natural gas boom of the early Twenty-first Century, on the grounds that natural gas emits less carbon dioxide than oil, but subsequent analysis revealed the problem of methane emissions and other environmental risks. Oil transformed markets and societies in the Twentieth Century, but it has poisoned our planet. Renewables may bring energy that emits less to no greenhouse gases, but many of the components of battery storage systems and photovoltaics are toxic and the extraction process has led to grave human rights violations.

An energy transition implies changes in both the supply of, and demand for, energy. On the supply side, the current energy transition entails large scale adoption of renewable energy sources. Major renewables include biofuels, wind, solar, hydro, and geothermal power. Renewables cannot be exhausted the way that fossil fuels are exhaustible, but they tend to be time-limited in the amount of energy that they can generate. Another related issue surrounding many renewables is energy storage, which has piqued interest in battery technology. When the wind stops blowing, energy saved from prior windy periods must be tapped to maintain a constant flow of energy to end users. On the demand side, energy transition focuses on reducing human reliance on goods and practices which are heavy emitters of greenhouse gases. This includes changes in various fossil fuel-based transportation industries (e.g., cars, trucks, airplanes, boats, and tankers) as well as reliance on fossil fuels to provide energy for homes and factories. The petrochemical industry – producer of plastics – is also a significant source of demand for fossil fuels.

Figure 10.2.2: Harnessing wind power and converting it to electricity is one form of renewable energy (CC BY-ND 2.0; Paul Lim via Flickr)

Transition to renewable sources of energy, or at least less greenhouse gas-emitting ones, will be a slow process. Throwing a dose of realism into the conversation is natural gas executive Charif Souki, the chairman of the global natural gas firm Tellurian. He mused in 2022, “Nobody has been confronted with what the cost of this energy transition is. You still need to increase energy by 50 percent in order to satisfy the aspiration of 90 percent of the world. Eight-five percent of the world’s energy is hydrocarbons. There is no realistic way by which you can say we’re gonna eliminate hydrocarbons out of the energy mix. Renewables is about five percent. So before it becomes a significant piece of the energy mix, it’s going to take decades,” (as quoted in Edge et al., 2022, The Power of Big Oil, Part 3: Delay). Yet the United Nations Intergovernmental Panel on Climate Change has issued a science-backed warning that the world must reach “net zero” in carbon emissions by 2050 in order to stave off the worst effects of climate change. The world has decades to navigate an energy transition, but those decades are short.

The coming energy transition will cost dearly in material terms, but also in the scope of what must be accomplished. Energy scholars have asserted, “The clean energy transition demands a complete transformation of the global economy and will require roughly $100 trillion in additional capital spending over the next three decades,” (Bordoff & O'Sullivan, 2022). Part of that spending might be directed at the most promising technologies with “breakthrough potential” ranging from advanced nuclear reactors to electric grid modernization. Researchers have been exploring dozens of new technologies to expand the portfolio of clean energy options available to governments, firms, households, and ultimately individuals (IHS Markit & Energy Futures Initiative, 2019, Ch. 3).

Looking to the existential challenges posed by climate change, the possibility for a transition to alternative, renewable energy sources hinges on a combination of institutional change, technological innovation, and popular will. Dependence on fossil fuels for energy has created a “carbon lock-in” that must be undone (Unruh, 2000). The foundation for the economic prosperity of many industrialized countries of the world is fossil fuel-based production, and this path has been locked into place despite growing understanding of the costs of this model in terms of climate change. A key step in undoing carbon lock-in is social and political will: generating momentum to push through policy change and marshal requisite resources, human and material, to move toward a new global energy profile.

International Organizations: Change Leaders or Part of the Problem?

As forums for global and regional dialogue, information exchange, and negotiation, several international organizations are key to addressing the world’s energy needs. UN Climate Change (or the United Nations Framework Convention on Climate Change, UNFCCC), is the main intergovernmental body with the authority and resources to convene interested parties around climate change mitigation. Its most important scientific arm, the Intergovernmental Panel on Climate Change (IPCC), conducts assessments on the science of climate change. Decades ago, in 1990, the IPCC reported that climate change was likely caused by human activity, and by 1995 it concluded “the balance of evidence suggests that there is a discernible human influence on global climate,” (Intergovernmental Panel on Climate Change, 1995). With this evidentiary support, UN Climate Change has convened world leaders repeatedly to broker international treaties on climate change.

Figure 10.2.3: During the UN Climate Change Conference of the Parties in 2022 (COP27), climate strikers gathered in San Francisco and across the world to call for climate justice (CC BY-NC 2.0; Peg Hunter via Flickr)

A milestone was the successful negotiation of the 2015 Paris Agreement. With 196 national signatories, its central goal is to limit global warming to less than a two degree Celsius increase above pre-industrial levels. To achieve this, the world must curb greenhouse gas emissions and execute a whole-of-society change in energy use. As signatories, governments must set national goals and plans to reduce greenhouse gas emissions. The Paris Agreement set up the Conference of the Parties (CMA) to serve as a coordinating body and help pool resources.

Another intergovernmental body which affects global energy trends is the Organization of the Petroleum Exporting Countries (OPEC). OPEC facilitates cooperation across major oil-producing countries. Founding members include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Energy giants Russia and the U.S. are not OPEC members, but the organization nonetheless represents nearly 40 percent of global crude oil production. Its goals are at odds with that of UN Climate Change, since its stated mission is to “ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry,” (Organization of the Petroleum Exporting Countries, n.d.). The power of OPEC was most evident in 1973, when OPEC members imposed an embargo on oil exports to the United States, sparking an energy crisis in the country. That power has diminished on account of US resurgence in oil and natural gas production.

Casting a wider umbrella than OPEC is the International Energy Forum (IEF), which has over 70 member countries. Its main purpose is to promote energy dialogue, especially between producers and consumers of energy. Based in Riyadh, Saudi Arabia, IEF boasts that its membership comprises more than 90 percent of global oil and gas supply and demand – and also includes transit countries. The “Big Three” – Russia, Saudi Arabia, and the U.S. – are all members, and an American was selected to become IEF Secretary General in 2020.

Pushing back against these intergovernmental organizations are various powerful voices in global civil society. This comprises myriad nongovernmental organizations, associations, and groups which have pressured government leaders to adopt their preferred policies. Some are grassroots organizations empowered by large global memberships and deep networks, such as Greenpeace. Others like the Climate Action Network serve as hubs for hundreds of affiliated organizations. Some, such as the now-defunct Global Climate Coalition, received funding and strategic advising from major oil companies to deny any climate change-related legislation that might harm “big oil” and its affiliates. On the flip side, looking toward a future in which the worst of climate change is averted, groups such as Sunrise Movement reflect the collective energy of youth around the world who wish to lead a “climate revolution”.

International organizations are jostling with one another to achieve the ultimate goal of global energy transition and climate change mitigation. They provide spaces for the tough negotiations that must follow in the wake of hard truths. This can take the form of self-interested reductions in oil production to raise global oil prices. Or this may look like the Paris Agreement, a starting point for governments to engage in global climate action. Centuries of intensive fossil fuel use have pushed the planet to a precarious state, and broad-based coordination is imperative.