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Showing posts with label renewable. Show all posts
Showing posts with label renewable. Show all posts

Thursday 12 October 2017

Data is not the new oil

How do you know when a pithy phrase or seductive idea has become fashionable in policy circles? When The Economist devotes a briefing to it.


Amol Rajan in BBC

In a briefing and accompanying editorial earlier this summer, that distinguished newspaper (it's a magazine, but still calls itself a newspaper, and I'm happy to indulge such eccentricity) argued that data is today what oil was a century ago.

As The Economist put it, "A new commodity spawns a lucrative, fast-growing industry, prompting anti-trust regulators to step in to restrain those who control its flow." Never mind that data isn't particularly new (though the volume may be) - this argument does, at first glance, have much to recommend it.

Just as a century ago those who got to the oil in the ground were able to amass vast wealth, establish near monopolies, and build the future economy on their own precious resource, so data companies like Facebook and Google are able to do similar now. With oil in the 20th century, a consensus eventually grew that it would be up to regulators to intervene and break up the oligopolies - or oiliogopolies - that threatened an excessive concentration of power.

Many impressive thinkers have detected similarities between data today and oil in yesteryear. John Thornhill, the Financial Times's Innovation Editor, has used the example of Alaska to argue that data companies should pay a universal basic income, another idea that has become highly fashionable in policy circles.

Image copyrightGETTY IMAGESImage caption A drilling crew poses for a photograph at Spindletop Hill in Beaumont, Texas where the first Texas oil gusher was discovered in 1901.

At first I was taken by the parallels between data and oil. But now I'm not so sure. As I argued in a series of tweets last week, there are such important differences between data today and oil a century ago that the comparison, while catchy, risks spreading a misunderstanding of how these new technology super-firms operate - and what to do about their power.

The first big difference is one of supply. There is a finite amount of oil in the ground, albeit that is still plenty, and we probably haven't found all of it. But data is virtually infinite. Its supply is super-abundant. In terms of basic supply, data is more like sunlight than oil: there is so much of it that our principal concern should be more what to do with it than where to find more, or how to share that which we've already found.

Data can also be re-used, and the same data can be used by different people for different reasons. Say I invented a new email address. I might use that to register for a music service, where I left a footprint of my taste in music; a social media platform on which I upload photos of my baby son; and a search engine, where I indulge my fascination with reggae.

If, through that email address, a data company were able to access information about me or my friends, the music service, the social network and the search engine might all benefit from that one email address and all that is connected to it. This is different from oil. If a major oil company get to an oil field in, say, Texas, they alone will have control of the oil there - and once they've used it up, it's gone.


Legitimate fears

This points to another key difference: who controls the commodity. There are very legitimate fears about the use and abuse of personal data online - for instance, by foreign powers trying to influence elections. And very few people have a really clear idea about the digital footprint they have left online. If they did know, they might become obsessed with security. I know a few data fanatics who own several phones and indulge data-savvy habits, such as avoiding all text messages in favour of WhatsApp, which is encrypted.

But data is something which - in theory if not in practice - the user can control, and which ideally - though again the practice falls well short - spreads by consent. Going back to that oil company, it's largely up to them how they deploy the oil in the ground beneath Texas: how many barrels they take out every day, what price they sell it for, who they sell it to.

With my email address, it's up to me whether to give it to that music service, social network, or search engine. If I don't want people to know that I have an unhealthy obsession with bands such as The Wailers, The Pioneers and The Ethiopians, I can keep digitally schtum.

Now, I realise that in practice, very few people feel they have control over their personal data online; and retrieving your data isn't exactly easy. If I tried to reclaim, or wipe from the face of the earth, all the personal data that I've handed over to data companies, it'd be a full time job for the rest of my life and I'd never actually achieve it. That said, it is largely as a result of my choices that these firms have so much of my personal data.

Image copyrightGETTY IMAGESImage captionServers for data storage in Hafnarfjordur, Iceland, which is trying to make a name for itself in the business of data centres - warehouses that consume enormous amounts of energy to store the information of 3.2 billion internet users.

The final key difference is that the data industry is much faster to evolve than the oil industry was. Innovation is in the very DNA of big data companies, some of whose lifespans are pitifully short. As a result, regulation is much harder. That briefing in The Economist actually makes the point well that a previous model of regulation may not necessarily work for these new companies, who are forever adapting. That is not to say they should not be regulated; rather, that regulating them is something we haven't yet worked out how to do.

It is because the debate over regulation of these companies is so live that I think we need to interrogate superficially attractive ideas such as 'data is the new oil'. In fact, whereas finite but plentiful oil supplied a raw material for the industrial economy, data is a super-abundant resource in a post-industrial economy. Data companies increasingly control, and redefine, the nature of our public domain, rather than power our transport, or heat our homes.

Data today has something important in common with oil a century ago. But the tech titans are more media moguls than oil barons.

Tuesday 24 February 2015

Are low oil prices here to stay?

 By Richard Anderson 

Business reporter, BBC News

Predicting the oil price is a bit of a mug's game.
There are simply too many variables involved to make any kind of meaningful, definitive forecast.
What we do know is that, despite a recent upturn, the price of oil has slumped almost 50% since last summer following the longest-running decline for 20 years.
And we know why - US shale oil, and to a lesser extent Libyan oil returning to the market, has pushed up supply while a slowdown in the Chinese and EU economies has reduced demand.
Add to the mix a strong US dollar making oil more expensive in real terms, pushing demand even lower, and you have a recipe for a plummeting oil price.
What happens next is a little harder to see.
With the booming US shale industry showing little signs of slowing, and growing concerns about the strength of the global economy, there are good reasons to suspect that the current slump in the oil price will continue for some time.
This is precisely when Opec, the cartel of major global oil producers, would normally step in to stabilise prices by cutting production. It has done so many times in the past, so often in fact that the market expects Opec to intervene.
This time it hasn't. In a historic move at the end of last year, Opec said not only that it would not cut production from its 30 million barrels a day (mb/d) quota, but had no intention of doing so even if oil fell to $20 a barrel.
And this was no empty threat. Despite furious opposition from Venezuela, Iran and Algeria, Opec kingpin Saudi Arabia simply refused to bail out its more vulnerable cohorts - many Opec members need an oil price of $100 or more to balance their budgets, but with an estimated $900bn in reserves, Saudi can afford to play the waiting game.
Opec now supplies a little over 30% of the world's oil, down from almost 50% in the 1970s, partly due to US shale producers flooding the market with almost 4 mb/d from a standing start 10 years ago.
"Given this scenario, who should be expected to cut production to put a floor under prices?" Opec argued last month.
Equally, Saudi is not prepared to sacrifice more market share while its competitors, not least US shale oil producers, prosper. Safe in the knowledge that it can withstand very low oil prices for the best part of a decade, it would rather stand back and, as Philip Whittaker at Boston Consulting Group says, "let economics do the work".
The implications of Opec's decision, therefore, go way beyond sending the oil price crashing even further.
"We have entered a new chapter in the history of the oil market, which is now starting to operate like any non-cartel commodity market," says Stuart Elliott at energy specialist Platts.
The fallout has been immediate in many parts of the industry, and promises to wreak further havoc in the coming months and, quite possibly, years.
'Serious risks'

Without Opec artificially supporting the oil price, and with potentially weaker demand due to sluggish global economic growth, the oil price is likely to remain below $100 for years to come.
The futures market suggests the price will recover slowly to hit about $70 by 2019, while most experts forecast a range of $40-$80 for the next few years. Anything more precise is futile.
At these kinds of prices, a great many oil wells become uneconomic. First at risk are those developing hard to access reserves, such as deepwater wells. Arctic oil, for example, does not work at less than $100 a barrel, says Brendan Cronin at Poyry Managing Consultants, so any plans for polar drilling are likely to be shelved for the foreseeable future.
World's top oil producers, 2014 (million barrels a day)

  • US: 11.75
  • Russia: 10.93
  • Saudi Arabia: 9.53
  • China: 4.20
  • Canada: 4.16
  • Iraq: 3.33
  • Iran: 2.81
  • Mexico: 2.78
  • UAE: 2.75
  • Kuwait: 2.61
Source: IEA
North Sea oil production is also at serious risk, certainly in terms of new wells that need an oil price of about $70-$80 to justify drilling. Indeed in a recent interview with Platts, the head of Oil & Gas UK said at $50, North Sea oil production could fall by 20%, dealing a hammer blow not just to the companies involved but to the Scottish economy as a whole.
Exploration into unproven reserves in regions such as Southern and West Africa will also grind to a halt.
Questions are also being asked about fracking. Costs vary a great deal, but research by Scotiabank suggests the average breakeven price for US shale producers is about $60. At the same price, energy research group Wood Mackenzie estimates that investment in new wells would halve, wiping out production growth.
"The vast majority [of US shale wells] just don't work at $40-$50," says Mr Cronin.
Oil majors are already suffering, having announced tens of billions of dollars of cuts in exploration spending. But while the share prices of BP, Total and Chevron are all down about 15% since last summer, the majors have the resources to see out a sustained period of low oil prices.
There are hundreds of other much smaller oil groups across the world with a far more uncertain future, not least in the US. Shale companies there have borrowed $160bn in the past five years, all predicated on selling oil at a higher price than we have today. Banks' patience can only be tested so far.
Oilfield services companies are also "feeling severe pain", according to Mr Whittaker, with share prices in the sector down an average 30%-50%. Last month, US giant Schlumberger announced 9,000 job cuts, some 8% of its entire workforce.
But it's not just oil companies that are being hit by lower oil prices - the renewables sector is suffering as well.
In the Middle East and parts of Central and South America, oil is in direct competition with renewables to generate electricity, so solar power in particular will suffer at the hands of cheap oil.
Fuel price calculator 

Elsewhere, falling oil prices are helping drive down the price of gas, the direct rival of renewables. Subsidies, therefore, may have to rise to compensate.
Indeed lower oil and gas prices undermine a fundamental economic argument propounded by many governments to support renewables - that fossil fuels will continue to rise in price.
The impact is already being felt - shares in Vestas, the world's largest wind turbine manufacturer, are down 15% since the summer, while those in Chinese solar panel giant JA Solar have slumped 20%.
Lower oil prices are also a grave concern for electric carmakers, with sales of hybrids in the US falling while those of gas-guzzling SUVs surge.
'Profound impact'

The knock-on effects within the energy industry of a sustained period of lower oil prices are, then, both widespread and profound.
But while Saudi Arabia's decision to call time on supporting the oil price marks an important milestone in the industry, oil's self-stabilising price mechanism remains very much intact - prices fall, production drops, supply falls, prices rise.
As a direct result of lower prices, exploration and production will be curtailed, and while it may take a number of years to filter through, supply will fall and prices will rise. After all, while there may be hundreds of new small suppliers entering the fray, there are still too few big players controlling oil supply for a truly free market to develop.
But real change is on the way. There is a growing realisation that fossil fuels need to be left in the ground if the world is to meet climate change targets and avoid dangerous levels of global warming.
Against this backdrop, it is only a matter of time before a meaningful carbon price - hitting polluters for emitting CO2 - is introduced, a price that will have a profound impact on the global oil market.
Equally, for the first time oil is facing a genuine competitor in the transport sector, which currently accounts for more than half of all oil consumption. Electric vehicles may be a niche market now, but as battery technology in particular advances, they will move inexorably into the mainstream, significantly reducing demand for oil.
The oil market is undergoing significant transformation, but more fundamental change is on the horizon.

Friday 19 October 2012

Petrol from Air - Renewable Energy Solution?


British engineers produce amazing 'petrol from air' technology

Revolutionary new technology that produces “petrol from air” is being produced by a British firm, it emerged tonight.

An Air Fuel Synthesis technical team member with a flask of AFS fuel: British engineers produce amazing 'petrol from air' technology
Image 1 of 4
An Air Fuel Synthesis technical team member with a flask of AFS fuel Photo: Air Fuel Synthesis
A small company in the north of England has developed the “air capture” technology to create synthetic petrol using only air and electricity.
Experts tonight hailed the astonishing breakthrough as a potential “game-changer” in the battle against climate change and a saviour for the world’s energy crisis.
The technology, presented to a London engineering conference this week, removes carbon dioxide from the atmosphere.
The “petrol from air” technology involves taking sodium hydroxide and mixing it with carbon dioxide before "electrolysing" the sodium carbonate that it produces to form pure carbon dioxide.
Hydrogen is then produced by electrolysing water vapour captured with a dehumidifier.
The company, Air Fuel Syndication, then uses the carbon dioxide and hydrogen to produce methanol which in turn is passed through a gasoline fuel reactor, creating petrol.
Company officials say they had produced five litres of petrol in less than three months from a small refinery in Stockton-on-Tees, Teesside.
The fuel that is produced can be used in any regular petrol tank and, if renewable energy is used to provide the electricity it could become “completely carbon neutral”.
The £1.1m project, in development for the past two years, is being funded by a group of unnamed philanthropists who believe the technology could prove to be a lucrative way of creating renewable energy.
While the technology has the backing of Britain’s Institution of Mechanical Engineers, it has yet to capture the interest of major oil companies.
But company executives hope to build a large plant, which could produce more than a tonne of petrol every day, within two years and a refinery size operation within the next 15 years.
Tonight Institution of Mechanical Engineers (IMechE) officials admitted that while the described the technology as being “too good to be true but it is true”, it could prove to be a “game-changer” in the battle against climate change.
Stephen Tetlow, the IMechE chief executive, hailed the breakthrough as “truly groundbreaking”.
“It has the potential to become a great British success story, which opens up a crucial opportunity to reduce carbon emissions,” he said.
“It also has the potential to reduce our exposure to an increasingly volatile global energy market.
“The potential to provide a variety of sustainable fuels for today’s vehicles and infrastructure is especially exciting.”
Dr Tim Fox, the organisation's head of energy and environment, added: “Air capture technology ultimately has the potential to become a game-changer in our quest to avoid dangerous climate change.”
Peter Harrison, the company’s 58 year-old chief executive, told The Daily Telegraph that he was “excited” about the technology’s potential, which “uses renewable energy in a slightly different way”.
“People do find it unusual when I tell them what we are working on and realise what it means,” said Mr Harrison, a civil engineer from Darlington, Co Durham.
“It is an opportunity for a technology to make an impact on climate change and make an impact on the energy crisis facing this country and the world.
"It looks and smells like petrol but it is much cleaner and we don't have any nasty bits."

Saturday 17 September 2011

Learning From China: Why The Existing Economic Model Will Fail



By Lester Brown
16 September, 2011
Earth Policy Institute

For almost as long as I can remember we have been saying that the United States, with 5 percent of the world’s people, consumes a third or more of the earth’s resources. That was true. It is no longer true. Today China consumes more basic resources than the United States does.

Among the key commodities such as grain, meat, oil, coal, and steel, China consumes more of each than the United States except for oil, where the United States still has a wide (though narrowing) lead. China uses a quarter more grain than the United States. Its meat consumption is double that of the United States. It uses three times as much coal and four times as much steel.
These numbers reflect national consumption, but what would happen if consumption per person in China were to catch up to that of the United States? If we assume conservatively that China’s economy slows from the 11 percent annual growth of recent years to 8 percent, then in 2035 income per person in China will reach the current U.S. level.
If we also assume that the Chinese will spend their income more or less as Americans do today, then we can translate their income into consumption. If, for example, each person in China consumes paper at the current American rate, then in 2035 China’s 1.38 billion people will use four fifths as much paper as is produced worldwide today. There go the world’s forests.
If Chinese grain consumption per person in 2035 were to equal the current U.S. level, China would need 1.5 billion tons of grain, nearly 70 percent of the 2.2 billion tons the world’s farmers now harvest each year.
If we assume that in 2035 there are three cars for every four people in China, as there now are in the United States, China will have 1.1 billion cars. The entire world currently has just over one billion. To provide the needed roads, highways, and parking lots, China would have to pave an area equivalent to more than two thirds the land it currently has in rice.
By 2035 China would need 85 million barrels of oil a day. The world is currently producing 86 million barrels a day and may never produce much more than that. There go the world’s oil reserves.
What China is teaching us is that the western economic model—the fossil-fuel-based, automobile-centered, throwaway economy—will not work for the world. If it does not work for China, it will not work for India, which by 2035 is projected to have an even larger population than China. Nor will it work for the other 3 billion people in developing countries who are also dreaming the “American dream.” And in an increasingly integrated global economy, where we all depend on the same grain, oil, and steel, the western economic model will no longer work for the industrial countries either.

The overriding challenge for our generation is to build a new economy—one that is powered largely by renewable sources of energy, that has a much more diversified transport system, and that reuses and recycles everything. We have the technology to build this new economy, an economy that will allow us to sustain economic progress. But can we muster the political will to translate this potential into reality?

Lester Brown is an United States environmentalist, founder of the Worldwatch Institute, and founder and president of the Earth Policy Institute, a nonprofit research organization based in Washington, D.C. BBC Radio commentator Peter Day calls him "one of the great pioneer environmentalists."
Copyright © 2011 Earth Policy Institute