“Our research shows that during the past eight years alone, (commodity prices) have undone the decline of the previous century, rising to levels not seen since the early 1900s,” according to McKinsey. “In addition, volatility is now greater than at any time since the oil-shocked 1970s because commodity prices increasingly move in lockstep. Our analysis suggests that they will remain high and volatile for at least the next 20 years if current trends hold—barring a major macroeconomic shock—as global resource markets oscillate in response to surging global demand and inelastic supplies.”

The report talks of the surging demand for energy, food, metals and water as 3 billion new middle-class citizens emerge over the next two decades. In India calorie intake will rise 20 per cent per person, while in China per-capita meat consumption is expected to rise 60 per cent. While such dramatic growth of consumption isn’t unusual historically, and while we have managed to accommodate that growth in the past, McKinsey says things are very different this time around:

There are three differences today. First, we are now aware of the potential climatic impact of carbon emissions associated with surging resource use. Without major changes, global carbon emissions will remain significantly above the level required to keep increases in the global temperature below 2 degrees Celsius—the threshold identified as potentially catastrophic.

Second, it’s becoming increasingly difficult to expand the supply of commodities, especially in the short run. While there may not be absolute resource shortages—the perceived risk of one has historically spurred efficiency-enhancing innovations—we are at a point where supply is increasingly inelastic. Long-term marginal costs are increasing for many resources as depletion rates accelerate and new investments are made in more complex, less productive locations.

Third, the linkages among resources are becoming increasingly important. Consider, for example, the potential ripple effects of water shortfalls at a time when roughly 70 percent of all water is consumed by agriculture and 12 percent by energy production. In Uganda, water shortages have led to escalating energy prices, which led to the use of more wood fuels, which led to deforestation and soil degradation that threatened the food supply.

So where do we go from here? McKinsey, citing forthcoming research, says better resource productivity can maybe meet more than 20 per cent of the forecast 2030 demand for energy, steel, water and land. Higher prices over the long-term will also create incentives for “breakthrough” innovations that could reduce carbon emissions. But even then, a heck of a lot more needs to be done, the consultancy argues — and it won’t be easy. “Major policy, behavioral, and institutional barriers must be addressed,” it argues. “Yet as we enter a new era for commodities, there’s little choice but to act.”

Action. Now isn’t that a novel concept. Sure beats denial.

Mad Like Tesla: Underdog Inventors and Their Relentless Pursuit of Clean Energy was launched this month and has been well-received. The reviews so far have been positive, and awareness of the book is slowly building. But not fast enough. I want to take this moment to ask my readers, many of whom have already purchased the book (thank you!), to help spread the word. Share this link or the Mad Like Tesla website (www.madliketesla.com) on social media sites such as Facebook and Twitter. Refer to it when commenting on the various blogs you might follow. And for my media friends out there — whether in the mainstream press or the blogosphere — please consider a review, or alternatively, I’m happy to chat about the many odd and inspiring stories in this book. Please see press release here.

Thank you all for your ongoing interest and support. BTW: Many have asked, so I’m happy to report that the e-book version of Mad Like Tesla is now available at Amazon.com.

Why Mad Like Tesla? That’s explained in the introduction, but in a nutshell Serbian-American engineer Nikola Tesla invented many important technologies in his lifetime. yet he faced constant struggle against naysayers and skeptics who couldn’t, at first, grasp the significance of what he was sharing with the world. Many dismissed Tesla as a mad scientist, and yet his inventions shaped the world largely for the better. So, in my view, if someone today is mad like Tesla, that’s not necessarily a bad thing. It’s quite a good thing, actually — we need more of these people, for the changes necessary in our world will not come from the kind of cautious, incremental steps being taken today.

I have a website for the book in the works, but it won’t be ready until end of August.

Thanks for your support!

Hamilton, energy and technology writer for the Toronto Star, examines some of the latest, most far-out green energy innovations and the people behind them. How far-out? Take, for example, a retired engineer’s idea to produce electricity via an artificial tornado, or a plan for a space-based power station that would harvest the sun’s energy, using microwaves to beam it down to earth. Other gizmos and processes seem more amenable to commercial success and social acceptance: Hamilton tells of a secretive company called EEStor that claims to have made a breakthrough in energy storage, and of a team building a low-cost nuclear fusion reactor. He strikes a fine balance between hope and hard realism when considering barriers to energy transition. As the “tornado guy” says, upon considering financial and regulatory obstacles: “Holy crap, that’s a lot to get through.” VERDICT: Mad Like Tesla is easy to get through, even for readers with only a basic knowledge of energy issues. Hamilton makes complex technologies comprehensible, and he clearly enjoys the remarkable human stories behind the science. Many of the risk takers and visionaries portrayed are Canadian (rocker Neil Young makes a cameo appearance!), but this book’s strong appeal should transcend all borders.

Can’t complain with that. The book is scheduled for public release on Sept. 1 and is already available for pre-order on a number of sites, including Amazon.com/Amazon.ca and Indigo.ca. The book won’t break the bank, either. We decided to do paperback release on first run to make the book more accessible to a larger audience. You can likely pick it up for $13 or so. I built a Web site I’m not entirely happy with, so plan to have a newly designed site finished by the end of August. Stay tuned!

Natural gas is often called a “transition” fuel because it emits fewer greenhouse gas emissions and pollutants than coal and is a good dance partner with renewables — that is, when the sun doesn’t shine or the wind doesn’t blow a natural gas-fired power plant can kick in quickly to fill the gap. But beyond serving that purpose, the two organizations argue natural gas shouldn’t become the default option, especially if a rising portion of that gas is coming from shale deposits where drilling and extraction processes can affect local drinking water and lead to higher emissions compared to conventional natural gas development.

“Shale gas requires up to 100 times the number of well pads to extract the same amount of gas as conventional sources, and recent shale gas development in the U.S. has had major environmental impacts,” said Dale Marshall, climate change policy analyst for the David Suzuki Foundation. “Expanded natural gas production in Canada would bring a host of problems — as well as making it harder to fight climate change.”

I’ve written extensively about the environmental risks of shale-gas development, how low natural gas prices resulting from shale development are contributing to increased oil sands development, and how the physical footprint of shale gas developments should give wind NIMBYs pause for thought. I’ve also been sounding the alarm for a couple of years now on the dangers of becoming over-dependent on natural gas and how this “cleaner” fossil fuel would, with the rise of shale gas, eventually become a lightning rod in the climate-change (and water quality) debate. In my view, and to reuse one analogy I’ve used in the past, natural gas might be the “light” fossil fuel, just as you can purchase “light” cigarettes. But in the case of cigarettes, whether light or normal, they still cause cancer and heart disease, and certainly smoking twice as many light cigarettes to wean yourself off regular cigarettes will make matters worse. The point is you have to wean off all cigarettes, period. We need to treat natural gas like we treat nicotine patches and gums — something that’s used temporarily and in moderation to beat an addiction to something we know, from a health and environmental perspective, is bad for us over the long term.

Stephen Colbert gets it. (link only works for Canadians — Americans can see clip here).

Unfortunately, when Canada’s energy ministers meet next week in Alberta, I’m sure any talk of a national energy strategy will put the economy first. After all, we know asbestos causes cancer yet Quebec is permitted to continue selling the dangerous stuff to third-world countries. So will the Pembina-Suzuki report have any impact on outcomes? I doubt it. There will be welcome talk on the need to develop shale gas resources more responsibly, but the focus will be simple: let’s develop as much as possible as quickly as possible, sell it to the world, create jobs, and make a few hundred people really rich. There will be no talk of moderation, either for natural gas development or the oil sands.

That seems, these days, to be the Canadian way. Drill baby drill. Extract baby extract. Sell baby sell.

That’s the good news — and let’s be clear, that is truly good news. But it comes with some bad news as well that we simply can’t ignore.

Indeed, the list of items on the bad news side is just as long — maybe even longer — which makes me wonder whether this love affair we seem to be having with natural gas is justified. It’s a relationship that can’t end well over the long term, not on a planet that needs to end its dependence on fossil fuels — all forms of fossil fuel. Natural gas, increasingly coming from shale gas projects, is like smoking “light” or “mild” cigarettes as part of a strategy to stop smoking and lower the risk of getting lung cancer. It’s an illusion. As we know from studies, smoking light cigs only strengthens the addiction, it doesn’t reduce cancer risks, and it gives the smoker a false sense that they’re taking meaningful action to avoid a deadly disease.

So, what is so bad about natural gas? Used strategically to realize efficiencies or as a bridge to renewables, there’s not a heck of a lot wrong with natural gas. But with shale gas on the scene, natural gas is cheap and plentiful, meaning that it is being used less strategically and more generally as a fuel of choice. What were once called “smart gas” strategies are out the window. To use the smoking analogy again, natural gas was once thought of as a more expensive nicotine patch designed to gradually wean us from smoking. Now, it’s a lower-cost light cigarette that only encourages us to smoke more. As a result, we’re seeing a mad dash to gas, and because a greater portion of that gas is coming from shale projects, we should be concerned. Here’s why:

• Shale gas projects are a serious threat to local drinking water, as concluded in a recent Duke University study. It found that methane levels were 17 times higher in water wells located within 1 kilometer of a shale-gas fracking site, adding weight to anecdotal evidence from folks living near shale-gas projects. The study also shined a light on the lack of research and regulation in this area, and how the industry’s “trust us” approach doesn’t provide the transparency needed to keep this emerging industry in check.
• There’s also big concerns about the chemical cocktails used during the hydraulic fracturing process. Do they leak into wells? Certainly, there’s the potential for accidents.  A Chesapeake Energy shale gas well in Pennsylvania had a blowout in April that sent thousands of gallons of toxic fracking fluid into nearby farm fields and streams. Companies are not required to disclose what chemicals they use for fracking. Why not? Again, the trust-us approach doesn’t cut it and has failed us in the past.
• There are even concerns that the fracking process can trigger earthquakes. This is, in my view, an overblown concern but it adds to the public’s perception that fracking on a large scale is potentially dangerous.
• There is concern that fugitive methane emissions from shale-gas projects make this form of natural gas no better than coal from a GHG emissions perspective, as raised by Cornell University’s Robert Howarth in a recent study. This, of course, has been widely challenged by industry and others, such as MIT. Again, it’s tough to know for certain as the industry has not historically disclosed the data required to make a proper assessment. At this point, IMHO I think it’s fair to say that shale gas lies somewhere between conventional natural gas and coal and the outcome depends heavily on drilling and fracking practices. Also, I think we underestimate the short-lived climate impacts of stray methane emissions from shale-gas projects. If methane emissions aren’t a big issue, why is the U.N. Environment Program churning out reports preaching the need to crack down on tropospheric ozone, including methane, to slow down the global temperature increase and delay tipping points that could trigger runaway climate change?

I’d like to say at this point that many of the above issues can be addressed with technology and best practices, but without adequate industry transparency or regulation, and with environmental protection agencies seeing budget cuts across the continent, how can we assume industry will act in the best interests of the environment and citizens? There’s the added challenge that these projects are small and distributed — i.e. there’s a heck of a lot of them, making it difficult even under a stricter regulatory environment to monitor compliance. Furthermore, what happens when developing countries such as China begin their shale gas revolutions? Can we expect the highest of standards and most advanced technologies to be used there? Yes, shale-gas development can be made to be cleaner. That industry worldwide will aim for the highest bar is a big, dangerous assumption to make.

Here are some other reasons why shale gas is potentially a greater problem than solution:

• Certainly, it’s great if plentiful, cheap natural gas is used instead of coal for power generation. The concern is if, in a post-Fukushima world, natural gas is chosen to fill the gap left behind in countries that have declared a moratorium on nuclear power generation or declared their intention to close down older nuclear plants. Likewise, it wouldn’t be good if solar, wind and other renewables are impacted by the dash to gas. Yes, natural gas generation is a good bedfellow with certain renewables, but the fear is that natural gas will hog the bed, steal the covers and overstay its welcome. It may bridge the transition to renewables but it could also delay it significantly, and time is something we can’t afford when it comes to keeping the worst effects of climate change in check. Nobuo Tanaka, executive director of the International Energy Agency, made this point recently when the agency issued its “golden age” of gas report. “An expansion of gas use alone is no panacea for climate change,” Tanaka warned. Absent a carbon tax with some bite, it’s unlikely industry or utilities will care much.
• One of my biggest concerns is how cheap gas — i.e. the impact of shale gas on natural gas prices — is spurring the production of dirtier oil, mainly from oil sands. It’s well known that natural gas is a key fuel input for oil sands mining, bitumen extraction and refining. It can represent more than half the cost of production, and in-situ projects that represent about half of all projects require tremendous amounts of steam, meaning tremendous amounts of natural gas. We’ve got this interesting scenario in which natural gas is consistently below $5 per million BTU and oil is consistently around or above $100 a barrel, creating a 20-to-1 spread. For perspective, the spread at the height of the 2008 oil sands boom was 13-1, so certainly the economics of producing dirty oil in an age of plentiful, cheap shale gas has improved significantly. The end result is a dirtier form of natural gas threatening to slow down the deployment of renewables while also driving greater production of a dirtier form of oil.

Again, this is why a carbon tax is so important. In B.C., for example, a $25 a tonne carbon tax is having a significant impact on natural gas costs by effectively adding a 25 per cent levy. “This sends quite a different price signal in terms of substitution,” say Don Roberts, who heads up the cleantech and renewables practice as CIBC World Markets. “At the end of the day it’s still the best policy to get that carbon tax.”

On a final note, I’d like to consider the land footprint of shale gas. Some people in the oil and gas sector take issue with the land footprint of wind turbines while ignoring the similar footprint that comes with shale gas development. Let’s compare the two. In the United States, there are roughly 20,000 installed wind turbines and roughly 20,000 shale-gas wells. Both forms of energy extraction require access roads, access to ideal sites, and connection to a main collector (transmission in the case of wind; pipelines in the case of shale gas). Over 25 years, the average shale gas well might produce 2 billion cubic feet of gas that, when used for power generation in a combined-cycle natural gas plant, produces about 285,000 megawatt-hours of electricity. Over 25 years, a 2.3-megawatt onshore wind turbine would produce about 150,000 megawatt-hours of electricity based on a 30 per cent capacity factor.

From this very rough calculation, it would seem that a shale gas well could result in roughly twice as much electricity production than a wind turbine over a 25-year period, but the question we need to ask is whether the additional energy is worth it for the footprint it occupies. A shale-gas well results in both upstream and downstream GHGs emissions; a wind turbine doesn’t. A shale-gas well poses a risk to local drinking water; a wind turbine doesn’t. A shale-gas well requires that a stew of toxic chemicals be injected underground at high pressure; a wind turbine doesn’t. A shale-gas well can pose local odour problems; a wind turbine doesn’t. A shale-gas well can leak bad stuff; a wind turbine can’t. A shale-gas well requires a large amount of water during drilling and fracking; a wind turbine doesn’t require water. I should point out that a wind-turbine site can produce energy practically forever, though the turbine will have to be replaced with a new one around the 25-year mark. Not so for shale gas — once a well is depleted it is of no more use, though its impact on the surrounding environment can be felt much longer.

Yes, wind turbines can kill birds and bats, and yes, some people don’t like the look of them and they can produce bothersome noises, but given the choice — a wind turbine within 1 kilometre of your home or a shale-gas well — which would you choose?

All of this isn’t to completely crap on natural gas and the many benefits it can offer. We need natural gas, and it will be an important part of the transition to an economy powered by renewables and other emission-free sources of electricity. It is, generally, cleaner than the other fossil fuels out there. But shale gas is making natural gas dirtier than it has been, just like the oil sands are making the world’s oil resources dirtier and less climate friendly. And if we depend on it too much, we risk taking a serious step backward by delaying our embrace of truly low-carbon and zero-emission energy sources. This will happen — guaranteed — if the market is left to its own devices.

Increased environmental regulation, requiring both transparency and best practices, and a carbon tax are what will keep natural gas a climate-friendly fuel. Left unchecked, it will become a climate enemy and our hope of keeping the global average temperature from exceeding 2 degrees C will be sunk.

George Monbiot raised this issue in one of his recent columns. He cited the fact that Fatih Birol, chief economist of the International Energy Agency, revealed in late April that crude oil production peaked in 2006. Yet the global economy didn’t collapse as predicted. Why not? “The reason, as Birol went on to explain, is that natural gas liquids and tar sands are already filling the gap,” Monbiot wrote. ”Not only does the economy appear to be more resistant to resource shocks than we assumed, but the result of those shocks is an increase, not a decline, in environmental destruction.” The problem, Monbiot continued, isn’t that we have too little fossil fuel but too much. “As oil declines, economies will switch to tar sands, shale gas and coal; as accessible coal declines they’ll switch to ultra-deep reserves (using underground gasification to exploit them) and methane clathrates. The same probably applies to almost all minerals: we will find them, but exploiting them will mean trashing an ever greater proportion of the world’s surface.”

We’re letting it happen. Until we stop letting it happen, things will continue as they are, despite talk of peak oil and despite rising oil and commodity prices.

The United Nations, which tracks world population growth, has upped its estimates. We know that we’ll pass the seven billion mark sometime this October, but the U.N. is now saying we could hit 10 billion within the century – nearly a billion more than expected. Actually, by 2050 we will likely hit 9.3 billion. For some perspective, the planet held five billion people back when Johnny Depp was just starting his career on the TV show 21 Jump Street (Yes, I admit, I was a huge fan of that show). That was the mid-1980s – not so long ago, is it?

Ten billion people are a lot of mouths to feed, bodies to hydrate and families to shelter. It translates into more vehicles on roads, more gigawatts of electricity demand, and more land needed for growing crops. And dramatically more garbage and pollution. It will become much more difficult for supply to meet this demand. Commodity prices will continue to rise, as they have been. Fresh water resources will become more scarce. Regional conflicts will grow. Greenhouse gas emissions will rise. This isn’t scaremongering, this is reality. Even climate skeptics must appreciate that the current path is unsustainable. Global warming isn’t the only reason to be concerned.

Now, reducing waste, eliminating inefficiency and doing things in a more intelligence way will help, but ultimately dealing with the planet’s population explosion will also require a complete rethinking of where we get energy and how we use it. We can’t simply “shoe-horn” renewables into an existing fossil-fuel infrastructure, at least not in the long term. We need to imagine an infrastructure that puts renewables and low-emission energy sources first, and then begin the difficult task of making the transition. Many barriers (entrenched interests, risk aversion, lack of political leadership and citizen buy-in) will need to be overcome, but what’s the alternative?

The Intergovernmental Panel on Climate Change released a short preview of an upcoming report today that asserts we can make the transition. It concludes that nearly 80 per cent of the world’s energy supply could by 2050 be met through deployment of renewable energy technologies — particularly those that capture solar energy. Now, it’s a highly optimistic scenario, but it’s what we need to help keep GHG emissions below 450 parts per million and keep the global temperature from rising beyond 2 degrees C.

Are we too intimidated by the daunting task ahead? Perhaps that’s part of the problem. The IPCC spends many years putting together a massive and comprehensive report on the climate and then plunks it down for all the world to see. It’s information overload — simply too much to digest in one sitting — and it gives the impression that we have a problem that’s too big to tackle. The IPCC’s Fourth Assessment was roughly 3,000 pages! The Fifth Assessment, currently in the works, will be an equally large tome filled with depressing conclusions and broad calls for action that no countries appear ready to embrace.

I agree with folks like Andrew Weaver from the University of Victoria, who is perhaps Canada’s top climate scientist. He says we need to start targeting the science and dividing the problem into smaller, more manageable chunks. ”The science behind the problem is so utterly solid is that what we need to do is start carving pieces off and dealing with those,” Weaver recently told me.

Take, for example, global emission from landfills, which represent up to 4 per cent of total global GHGs. Why doesn’t the IPCC come out with a full report dedicated to the problem of landfill methane emissions and how to tackle it aggressively? Another report could focus on air travel, another major contributor, or tropical deforestation, or agricultural, or even geo-engineering as an attempt to buy time for adaptation programs. “Hiving off these parts and focusing international negotiations on individual sectors is probably where we need to go,” said Weaver. “The problem is so big people don’t know where to begin, so we have to go in this direction. Some are easy to tackle, some are more difficult. All of them are doable if you deal with them bit by bit.”

Now, back to the climate skeptics. Many say Canada is so insignificant that there’s no point in taking any action that could threaten our economy. How, for example, can a country of less than 50 million really register in a world heading toward 9 billion? One can see the allure of the do-nothing position when looked at this way. The problem with this argument is that it ignores the other problems — real, verifiable problems — that come with overpopulation and rapid depletion of resources, particularly fossil fuels. Air quality. Water scarcity. Geopolitical instability. Rising oil prices. Mass immigration that threatens to overwhelm the west’s social systems. Economic volatility. Even if you forget about greenhouse gases, there are plenty of hazards ahead that should concern us. Canada is not an alone. These issues will impact us, and will take a toll on our economy and standard of living.

Moving away from increasingly expensive fossil fuels toward locally generated, zero-emission energy sources, and using clean technologies to reduce waste will enhance our economic competitiveness during these trying times. By becoming more self-sufficient, we can become more insulated from many of the global challenges that lie ahead.

Putting our eggs in the fossil fuel basket, on the other hand, greatly exposes us to these challenges. Sure, a small group of people will get really rich (and this will skew our national GDP, which is a misleading indicator of a country’s economic health). But we will become more vulnernable to the volatility of oil and gas prices, commodity price swings and other gyrations of our international markets.

 I can’t help but think that North America, at the moment, is like a teenage athlete that continues to take steroids to win a race, only to ignore the heart attack that’s likely to come at age 25. Where’s the glory in that? There’s a quote in the Coppola movie Rumble Fish, in which Rusty James asks his brother what California is like (in the 1980s). His brother answers back: “California’s like a beautiful, wild girl on heroin who’s high as a kite, thinkin’ she’s on top of the world, not knowing she’s dying even if you show her the marks.”

One could say this of Alberta. In fact, some kind of are — and they’re not just environmental groups.

• Emerging nations like China and India are going through materially intensive development and a tighter market will continue to put pressure on prices and generate volatility.
• Developing nations, including population giants China and India, are entering their most energy-intensive phase of economic growth as they industrialise, urbanize, build infrastructure, and increase their use of transportation. Demand pressures will stimulate alternative supply and more efficiency in energy use but these alone may not be enough to offset growing demand tensions completely.
•  Ordinary rates of supply growth — taking into account technological, geological, competitive, financial and political realities — could naturally boost energy production by about 50%. But this still leaves a gap between business as- usual supply and business-as-usual demand of around 400 EJ/a - the size of the whole industry in 2000. This gap – this Zone of Uncertainty – will have to be bridged by some combination of extraordinary demand moderation and extraordinary production acceleration.
• By the end of the coming decade, growth in the production of easily accessible oil and gas will not match the projected rate of demand growth.
•  Timescales are a key factor. Buildings, infrastructure and power stations last several decades. The stock of vehicles can last twenty years. New energy technologies must be demonstrated at commercial scale and require thirty years of sustained double-digit growth to build industrial capacity and grow sufficiently to feature at even 1-2% of the energy system. The policies in place in the next five years shape investment for the next ten years, which largely shape the global energy picture out to 2050.
• Future generations may see 2008 as the turning point. The world faces a period of uncertain global politics. Strategic fault lines are emerging. Rising powers are increasingly and confidently asserting what they see as their national interests. This is undermining global mechanisms for ensuring collective security.
• Even with the moderation of fossil fuel use and effective CO2 management, the path forward is still highly challenging. Remaining within desirable levels of CO2 concentration in the atmosphere will become increasingly difficult.

It’s incredible that an oil company can come out with this kind of information yet continue to contribute to the very problems it identifies. Clearly our destiny is on autopilot.