The future of energy will not be the linear continuation of the past. It will be a wild, twisted and contorted process and the world will look very different from now 20 years down the road.
I am a futurologist. What that means is easily explained. I think and live a couple of years from now, in the future. Not a future hundreds of years from now, when mankind dissolves into the ether although I occasionally like to drift off into those thoughts as well. No, my future is the next 10 – 20 years from now. Because the next 20 years will be infinitely more exciting than the last 60.
Ever since re-combining amino acids 4 billion years ago formed the first primitive RNA like structures, the pace of evolution had accelerated. It took half of those 4 billion years only to go from RNA to first really complex cells. I took a further quarter for multicellular life to spring up just over a billion years ago and simple animals appeared about one eight of that time span from now. First dinosaurs appeared one-sixteenth and died out one sixty-fifth of those 4 billion years before now. Modern humanoids appeared just 2,5 million years – a mere two-thousandth of lives existence on earth – ago. Human cultural history was a blimp and an accelerating journey of technological evolution in its own right.
Do you get the picture? 100 years or more ago it took a lifetime or more for humanity to advance one single significant step, to jump a paradigm. Advances of any kind were measured in eons. One would have been lucky to experience only one in his lifetime. Today, mind-bending things happen every year. This is LOAR (the Law Of Accelerating Returns). Its the fundamental law that dictates that the calculating power of computers doubles every about 24 months and also that is the basis of Darwin’s theory of evolution.
The next 20 years will be exhilarating. And I mean that in every sense of the word. Communication, social life, medicine, travel, the environment, the way we have and raise children but also learning and the pursuit of happiness will change beyond anything you dare to dream of. Dare we say that energy is going to be an exception? I would not.
Energy for all its advances in recent decades is still a pretty unsophisticated industry. We still cook oil in order to separate the vapors into different fuels. That technology was essentially employed in old China more than 500 years before the Roman Empire saw its climax. The only significant advance in oil refining has been catalytic crackers. That means throwing stuff on oil in order to produce chemical reactions. Hardly breathtaking, wouldn’t you agree? Electric energy is still produced at colossal central facilities and sent over thousands of miles, warming copper lines in the process. The fundamental science behind transport and storage is no more advanced than at Edison’s times. LNG business models and contracting are hardly any more sophisticated than when the Camel plant was built.
Randy Bachman sang in 1974 “You ain’t seen nothing yet”. He did not know what the world in 2012 would be like. But he knew that it would not be the same.
The molecular age hits oil. New, improved refining technologies will vastly increase the thermal efficiency of the combustion process and leave much less waste behind. Heavy fuels will be treated at the molecular level and become cleaner than today’s diesel. The pathways for the creation of those fuels will not be thermal or chemical; they will be physical and molecular doing away with expensive and inefficient reformation processes.
Part of this can be seen in ongoing fuel emulsification technology projects. The idea of water in fuel is mind-bending but it’s hardly new. A step further is fuel cavitation, a physical process that breaks long molecular chains into their constituents. But also at the other end, there is lots of progress. The smart grid starts to rear its head and will unfold its true potential over the next two decades. Not only will grids be smart, they will also be much more resilient to any breakdown due to any imaginable reason. Distributed generation combined with Smart Grid technologies as well as mid-scale and micro LNG fueling solutions will stealthily change the way we consume energy.
At 20 USD a barrel, all those technologies were not commercially interesting. Nobody invested money in R&D necessary to unlock the still vast potential of oil and gas. The current high price environment for hydrocarbons is the best amplifier for all those trends. Some of them have been decades in the making. Today they reach for the stars and some will undoubtedly get them.
Natural Gas and LNG break wide open. The industry sheds its shackles, develops pricing mechanisms of its own and the pressure in the Atlantic basin will force players to radically revamp their business models. Many will lose their shirts in the process as it always happens when radical change occurs but those who succeed will remake the face of the earth.
I have said in a couple speeches that I expect the equivalent of Apple, of Microsoft, of Google, of Facebook, to be created in the energy world now or very soon from now. It will look insignificant when it gets born but it will blast the world. We can only speculate about what the world will look like in 2022 and 2032 and I will repeatedly do so on this blog. One thing though is certain. It won’t feel like Kansas anymore.