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[MUSIC PLAYING] Welcome back. In Module Two, we'll cover energy transitions over time. For this lecture, we'll see how our energy consumption has changed over the decades and centuries, and that, in fact, our energy consumption differentiates modern times from antiquity. So let's get started. Module Two. We're going to talk about energy transitions over time. We just went through the objectives of the course, the background, the introduction Now, I want to talk to you about what energy means over time. For the last decade, headlines had declared the end of oil. So we see these different covers of National Geographic with "The End of Cheap Oil" in 2004. Or in 2005, "After Oil Powering the Future." The Economist in 2003 saying, "The End of the Oil Age." So we have these headlines that said, the end of oil is here, we need to move onto something else. But those headlines can change. Today's headlines are very different. In March, 2013, National Geographic has "America Strikes Oil." In May 2013, The Atlantic says, "We Will Never Run Out of Oil." In a decade, we went from we're running out of oil, it's over, to now, we've got more oil than we know what to do with. And that's part of the themes of energy, which is energy situations can actually change quickly, more quickly than we might anticipate. And energy transitions have happened before. They've happened many times before. And there are a few features of these transitions. They are more typical that we might expect. They take a long time. They tend to follow a path toward higher-performing fuels-- we tend to go from one fuel to something better. They solve one problem while introducing another. And they tend to follow a path towards decarbonization. I'm going to go through each of these points one by one. First off, if we look just at the US fuel mix, it has changed with time. On the y-axis is the energy consumption per year for the entire United States in quads, or quadrillion BTU. And then on the x-axis, is time from the early 1800s through today, over the last year for which we have good data. And there are a couple things to see. One is in the 1700s through the 1800s wood was dominant. Wood

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was used as a feed stock, for building material, it was used as a fuel source for heating and cooking, it was also used to smelt metals. Wood was the dominant fuel until about 1885, when coal overtook it. And then coal began the era of dominance from 1885 to 1950. As we found out that coal was a better performing fuel, and it was dominant until 1950, until petroleum, or oil, became dominant. Oil actually started in 1859 in terms of large-scale production, but didn't really take off until the early 1900s for internal combustion engines. And that became a more popular fuel than coal in 1950. And it's still dominant today. So we see these transitions from wood to coal to oil, and then we see a lot of growth in other fuels across the years. We see the rise of nuclear, the rise of natural gas, and the rise of renewables, none of which are as dominant as petroleum, but seem to be on the way up. So we've had these transitions several times before, and these periods of dominance by different fuels. And most of this has been a diversification. We went from purely wood, or mostly wood, to wood plus coal, to wood plus coal plus oil, to wood plus coal plus oil plus natural gas and others. So we have diversified the fuel mix over time. And one of the stories is just what's happened over the last decade, which is renewable energy consumption is growing significantly. We see just the renewables now, taking all the other fuels off the chart, zooming in, hydroelectric grew until around the 1970s and then kind of has bumped around level- up and down, based on whether it's a wet year or dry year, based on the rains-- but kind of level. Wind has grown significantly in the last decade. Biofuel has grown in the last decade. Wood has actually been declining, but leveling out, we might say, after some growth in the '70s. And that's mostly for the pulp in the paper industry. And then the wind has grown mostly for the power sector. And biofuel has grown mostly for the transportation sector. So we see some sudden or exponential growth in the last decade, which means that renewables are rising, which is one of those recent trends. Now, when we think about these fuels going from wood to coal to oil, one of the things we need to keep in mind is that they can solve each other's problems. We went to coal from wood for a couple reasons. One is we were running out of wood. If we look at the map of deforestation from the 1600s through today, a significant amount of wood is lost. We went from 820 million acres of virgin forest down to 138

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today, a significant amount of wood is lost. We went from 820 million acres of virgin forest down to 138 million acres of virgin forest over the span of a couple hundred years, because we cut the trees down. We were running out of trees. We had peak wood, so to speak. And then coal comes along. And coal is a cleaner, better, higher performing fuel. Coal has twice the energy density per ton, or per mass, than wood. It burns more cleanly. It is easier to control. So coal comes along as a better fuel. And it is an environmentally friendly fuel, at least compared to wood in that it's cleaner, and it saves the forest in a way that's kind of not obvious. Today we think of coal as a threat to the forest. But we used to think of coal as a way to save the forest, because it would replace wood as a fuel. Similar kind of story for whale oil. We used whale oil for illumination. And its growth in the 1800s caused a lot of loss of whales. So we had peak whale, so to speak, in 1845. We were running out of whales. Well, along comes kerosene from petroleum, which is a useful substitute for the whale oil, because the kerosene is cleaner, it burns brighter, it burns longer and without all the smoke and the pungent smell of burning whale blubber, essentially. So kerosene is a better fuel, it's a higher performing fuel, and a cleaner fuel, and it saves the whales. It also ends up being cheaper, like coal was cheaper than wood, well, kerosene is cheaper than whale oil. So we move to a more abundant, cheaper, more environmentally friendly, better fuel overall. And so we could think of oil as having saved the whales, which is the opposite of what we think today. People think of oil as a threat to whales today, because oil spills in the Gulf or elsewhere. But really, 150 years ago oil saved the whales. Part of this story in the transition is a trend of decarbonization. We've gone from the most carbon intensive fuels-- wood-- wood's actually pretty carbon intensive-- to coal, to petroleum, and then we'll move onto something else that's cleaner. As we go from wood to coal, to oil, the carbon emissions in grams of carbon emitted per BTU of energy consumed, actually goes down. And that trend shows this downward slide from the highest level wood to coal, to petroleum, to natural gas. Right now, the United States has an average carbon intensity, or carbon emissions, somewhere between oil and natural gas. We have coal in the mix that drives it up, and we have renewables and nuclear in the mix that drive it down as well. And that trend has been continuing for a couple hundred

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years. This is not a modern political invention. Decarbonizing is not a modern policy trick. It's actually a multicentury trend of civilization. It's something societies do as they get richer-- they tend to decarbonize, they tend to clean up their act. Maybe that's happening again with new transitions. If you look at our carbon dioxide emissions, they've been increasing for decades. Here shown from 1951 to 2011, our carbon emissions basically grew unabated, except for minor hiccups, when there's recession or the energy crisis in 1970s. But in the last few years, our carbon emissions have dropped for two reasons-- the recession, which reduced the consumption of energy and also, therefore, reduced the carbon emissions, but also fuel switching and efficiency. We've been switching from more carbon-intensive fuels, like coal, to less carbon-intensive fuels, like natural gas, reducing our emissions in the process. And we're getting more efficient cars and other devices that reduce our emissions. So there's this trend towards decarbonization, not just in per unit of energy, but perhaps is now taking over society-wide. We'll see how this plays out. Well, the good news is that the US energy situation is improving. After 40 years of worsening situation, of declining production and increasing imports, things are finally turning around. I was born in January 1971, basically the month US oil production peaked. My entire life the energy situation has been getting worse, until just a few years ago. So the first time in my life I can have optimism about where the energy situation's going, which is it's getting better. This has been a 40-year trend, where our domestic production was declining, and our consumption was going up, which meant our imports were going up. And now it's turning around. Our domestic production is going up for oil, gas, wind bio-, geothermal-- you name it. And our consumption and imports are going down. This is an improvement. And it's also causing the fuel mix to diversify, which is good. And we're also seeing greater efficiency in our vehicles and other end-use technologies. So we have a good news story about energy for the first time in a while. We haven't had this kind of feeling since the 1960s, probably. So I think, this is good context to keep in mind from the US, because the US situation is actually very different compared to the rest of the world. Keeping that mind, how we

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use energy in the US or how countries use energy in general, it turns out that how we use energy is a defining element of society. And how we use energy has changed from antiquity to the Industrial Revolution. There were several forms and applications of kinetic energy in antiquity in the old times. There were things like Dutch and Flemish windmills, there were medieval water wheels, there were sails, and muscle power. If we wanted to move things around, we used our muscles for it. And there were medieval uses of it, things like sawing wood, grinding grain, polishing glass, transportation, moving cargo. So we had a few forms of kinetic energy. But not that many, really. That's sort of one of identifying elements of antiquity. And they're also several forms and applications of thermal energy in antiquity. Thermal energy is a heat. Things like cooking and making glass, and boiling soap, and making lime. And the forms of thermal energy, the sources, the fuels were things like wood and charcoal, and peat, and dung, and straw. So we had thermal energy in antiquity and we had uses for that thermal energy. We had forms of kinetic energy and uses for that kinetic energy in antiquity. But those forms and uses have changed over time. And that's actually one of the time stamps or dating elements for how we might describe a society-- what kind of energy that society uses is a sign of how modern or how ancient that society is. The Industrial Revolution, its main breakthrough, its main enabler was a change in how we use thermal energy. The invention of the steam engine in the 1700s enabled the conversion of thermal energy to kinetic energy. So in antiquity, we had kinetic energy and thermal energy, but we did not have a way to go from thermal energy to kinetic energy. By the Industrial Revolution we got that with the steam engine. And once we had the steam engine, we could take heat to motion, it kicked off machines and factories, and assembly lines, and changed everything. If we flash forward now to modern times, US energy consumption has mostly been a story of growth throughout the 20th century. If we just look at the last few decades, it is a growth in our energy consumption-- growth in nuclear, growth in renewables, coal, natural gas, and petroleum. We want more of all of it. We did have a temporary period in the '70s, when our energy consumption dropped because of the oil

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shocks, because of the energy prices or oil crisis. But for the most part, the 20th century is a story of growth. The story of energy consumption for decades has been one of increasing consumption. And if we look over those last few decades, fossil fuels have been the dominant primary energy source in modern history. If we regroup those fuels by fossil fuels, renewables, nuclear, fossil fuels are most of it. Fossil fuels have advantages that are hard to replace in terms of energy density and their performance. So most of our energy comes from fossil fuels. A small fraction comes from renewables and nuclear. If we look at that fossil fuel mix for the United States and compare it to the rest of world, it turns out the US and the world use similar fuel mixes. This bar chart shows the relative fraction of our total energy consumption as a nation, and what fraction comes from different fuels. In the United States, well over 35% comes from oil, about 35% comes from oil for the world. The world's in green, the US is in light brown. Natural gas is about 26% for the United States, and about 23% for the world. In the United States, we use about 22% coal, the world uses more coal comparatively. And then we use about 9% or so nuclear energy, the world uses about 7%. We use a little less hydro compared to the world, but still, well below 10%. And then for other remewables, it's about the same. It's roughly the same fuel mix between the United States and the world, the difference is how much we consume. In the United States, we consume about 100 quads of energy, and the world consumes well over 500 quads. So the United States consumes about 1/5 of our total global energy consumption, but the fuels we use for that consumption is basically the same. We use a little more oil, a little more gas, a little less coal, a little more nuclear, a little less hydro, and about the same in renewables-- but roughly, it's the same. Now, this is a good news story, because it means whatever energy problems we have, the rest of world has. And there's cause for collaboration. We have common cause to solve the energy problem together. If we summarize, the US and the world, United States today gets about 86.4% of its energy from fossil fuels, and the world gets about 87.1% of its energy from fossil fuels-- about the same. And then we both get about 13% or so from other sources, non-fossil fuels. So we have roughly the same fuel mix overall.

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The difference is in the trends-- where we're headed. In United States, our dependence on fossil fuels is dropping with time, and in the world, it's level or growing, depending on what time frame you look at. We have dropped from about 88% fossil fuels in the United States to about 86.5% over the last few years, whereas the world is actually level or starting to increase. We are turning away from coal and oil in the United States towards other things, and the world's turning towards oil and coal. So we have different directions with our decision making. If we look to the future, what these trends mean, it gets pretty tricky. In fact, "It's tough to make predictions, especially about the future," a famous quote Yogi Berra gave. Yogi Berra actually wrote a book called I Didn't Say All the Things I Said, because he was famous for making all these funny quotes, and many of them were attributed to him, even the ones he didn't say. So "it's tough to make predictions, especially about the future." If you get the official analysis, the official projections from the EIA, the Energy Information Administration of the United States, the prediction is that the source of US energy supply is expected to change very little in the coming 20 years-- that we have oils dominant, followed by natural gas, followed by coal, followed by nuclear and renewables, and that they will keep their relative fractions as far as the eye can see. And this is a little tricky for these projections, because it's easy be wrong. In fact, I want you to zoom in at the year 2011. The projections are by the EIA that someday, decades in the future, renewables might overtake nuclear. But it turns out that, actually, that happened in 2011-it has already happened. So it's easy to be wrong with the projections. Renewables are actually already providing a greater fraction of US energy mix today than nuclear. These are historical projections shown on the left part of the chart, and then there's forward-looking projections about what our energy consumption will be in 2030. And let me walk you through what this means. In 2006, looking forward, the EIA says, our energy consumption is going to go up to about 134 quads of energy. In 2007, that production was lower a little bit. In 2008, it was lowered again. In 2009, it was lowered, in '10, '11, '12. So each year a new projection is made about what our energy consumption will be in 2030. And each year that revision was adjusted downwards to reflect new thinking. And so in 2006, we thought in 2030, we would use 134 quads of energy, but now our projection is we'll use 104 quads of energy, which is

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not much different than today. So we can be wrong with these projections. It's easy to be off by 30 quads with your projections. And this is part of the business of energy-- it's very hard to know the future of energy. Let me give you another example of projections. Here's our projection for US natural gas imports that were made in 2006. In 2006, we thought our imports would grow from about 3 trillion cubic feet a year to almost 6 trillion cubic feet per year. In 2012, just a few years later, the projections now say, our imports will go to zero, and then we'll have net imports that are negative, which means we will export natural gas. In a handful of years, we have changed our mindset that we're going to be a major net importer of natural gas, who now a major net exporter of natural gas. So this is the tricky business of energy. And that's actually a sign that something is happening, that energy's going through a transition globally. There are several global trends driving the system. There's population growth, economic growth, urbanization, industrialization, electrification, and motorization. There's more of us, we're richer, we're moving into cities, we're building industries, we're using electricity more, and we're driving. These are the changes. And those all drive their own shifts. A change in total demand for energy is going to occur because of more people who are getting richer, as are more people, they demand energy, as they get richer, they demand more energy per person. So that means growth in total demand for energy. As we electrify and motorize, that means a change in our end uses of energy-- we're going to use more electricity and more oil. And then there's a change in our source of energy for societal priorities, things like domestic sources, low-carbon sources, sustainable sources. So we're going to change how much we use, what we use it for, and what we get it from. All of those are changing in the energy system, causing this major energy transition. And so the prediction is from me and from the outcome of the course, maybe you would think this as well, is that energy will get cleaner, smaller, and smarter. Energy's changing, and this is one of the outcomes-- energy will get cleaner, smaller, and smaller. Another prediction is that natural gas will overtake petroleum in United States to become the dominant fuel source within 10 or 20 years. And we

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can sort of layout that prediction. We can look at historical natural gas consumption and historical petroleum consumption, and project those trends forward. If we just take what happened to natural gas last few years and project forward a few decades, and take what's happened with petroleum in the last few years and protect that forward a few decades, we see a crossing point, where natural gas overtakes petroleum around 2030, or so. And that just builds on the declines of petroleum consumption and the increases in natural gas consumption that we have witnessed in society. But it could happen even faster. We could see a transition in a decade or less. And that would happened, because we have mandated drops in petroleum consumption, because we have fuel economy standards that reduce how much energy we use in our cars, and we have biofuels mandates that displace petroleum with ethanol and other biofuels. So we are mandating a reduction in a petroleum consumption and we are seeing increases in natural gas consumption from fuel switching in the transportation sector, fuel switching in the power sector, more uses of natural gas in our homes, instead of heating oil, for example. As we see all the growth opportunities for natural gas and the decline of petroleum, they could cross within 10 to 20 years. I think that's one of the looming transitions that's about to occur. And by the way, the official projection by the EIA and others is that there'll be no transition, no crossing point any time soon. [MUSIC PLAYING] In this lecture, we learned that energy transitions are more common than we think and that it's difficult to predict the future of energy. I encourage you to go online and do the exercises to reinforce what you learned in this lecture. I look forward to seeing you next time. [MUSIC PLAYING]

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