Friday, June 05, 2009


Green Energy Investment: Things to Consider

An article in the Guardian, Green energy overtakes fossil fuel investment, says UN, trumpets the large amount of money being pumped into renewable energy. Of course, building plenty of renewable-energy infrastructure now, while we have the opportunity, is a good thing. But it’s not necessarily the case that the more money invested in renewables, the better, and dirty old fossil fuels be damned. Let’s consider why.

First, we need fossil fuels to manufacture renewable energy infrastructure (just try manufacturing and installing a wind turbine with electricity and ethanol!), and indeed to maintain all the infrastructure we already have. Since last year’s crude price crash, there has been woefully insufficient investment in finding and developing new oil fields. Unless a lot more money is pumped into oil, that lack of investment is going to come back to haunt us. As noted in previous posts, infrastructure in developed nations is already crumbling and in urgent need of repair and replacement. That repair and replacement would have to be done with coal and oil, not with electricity and biofuels provided by renewables. This of course reveals dark clouds on the horizon for renewables because if we cannot maintain existing infrastructure, how will we build and maintain more?

A second problem to consider is where all this money is coming from. Of course, it’s debt. But there is already far too much debt in the world — let’s get real, much of it is already bad debt — and adding more is just aggravating the situation. And the money invested in renewables is not being invested in oil.

So in this light, we shouldn’t be unreservedly celebrating the fact that investment in renewables has outstripped that in fossil fuels. As oil has likely already peaked, and coal will peak far sooner than previously anticipated, the world ought to be investing more in fossil fuels if people expect to maintain their industrial lifestyles and help developing countries to achieve the same.

So far we are on course toward a world in which fossil fuel energy becomes too expensive to use in the near future because of insufficient investment, where infrastructure further crumbles, and where the boom in renewables fizzles for lack of fossil fuel energy to bootstrap them.

<< Home

This page is powered by Blogger. Isn't yours?