Energy Transition Periods: Lessons Learned from the Past

Prof. Volkan S. Ediger Energy Advisor to the President of Turkey, Professor of Energy Economics, & Director of Research and Graduate Policies Izmir, University of Economics, Republic of Turkey Russia seems to be regaining power and influence today as it holds the world's largest natural gas reserves. The US, China, and India are trying to maximize coal consumption before they become fully dependent on natural gas. The energy sources of the future are therefore expected to be natural gas – together with some coal – for electricity generation, and hydrogen for transportation. China's energy choices will also shape the future balance of power in world politics. The policy implications of our study indicate that growing international cooperation in natural gas projects will help in decreasing geopolitical tensions since it creates interdependency between nations.

The shifts in the dominant global energy source from wood to coal, coal to oil, and oil to natural gas have been driven by competition between sources based on properties such as calorific value, harmful emissions and practicality, rather than by reserve depletion. Only about 25% of total world coal reserves have been exploited, for example.

A dominant energy source has always been substituted by a "better" energy source — which means "cleaner," "more energy-intensive," and also "more technologically sophisticated."

After its peak as the global fuel of choice in 1973, oil began competing on unfavorable terms with natural gas. However, this trend was arrested by 2000, when the share of coal again began to increase. Coal remains a more widely used fuel than natural gas.

We are currently very close to the expected peak production of oil. Future transitions will thus be directly related to resource depletion, and the production of coal will not peak until 2056. Coal represents more than half of the world's remaining fossil fuel reserves. The US, Russia and China have the largest share of these reserves, and the largest share of production of fossil fuels as a whole. With the exception of Russia, all countries are depleting their oil and gas much faster than they should.

A close relationship occurs between the dominant energy source and the world's hegemonic power – most recently between oil and the USA. The high points of oil and coal use correspond with the high points – the peaks of the Hubbert curves – of production in the dominant economic power of the day; this was 1913 for coal in Britain and 1973 for oil in the US.