Recently, CNN has commented on China's record levels of investment in its energy future, in particular renewables and electric cars. Was it a humorous gesture when CNN also used a comparison that the US is going in the opposite direction by investing in coal which is more like an energy choice from the past? When we take a look at the broader view, perhaps we can make better sense of CNN's perspective.
Each nation, based on its own energy security and insecurity, will have to face tough choices for the increasing demand by growing populations. Current population of the newer developed world such as China and India far outnumber the United States, with the developing world's middle class rising at rapid rates. According to Bloomberg New Energy Finance and The Business Council for Sustainable Energy, China's and India's current and projected emissions levels exceed the United States by far, and are headed even higher - please review slide below.
Both China and India are fast-growing, insatiably energy-thirsty nations that are top net importers of crude oil, natural gas, and other fossil fuel sources of energy from every part of the world. Based on necessity, they have no technological alternative but to diversify away from much-relied upon hydrocarbon supplies into every possible form of renewable energy source in order to sustain current growth and move their economies forward. They are forced to adopt an "all-in" approach to energy, because there is no one best solution.
If the United States has the same necessity as China has, it would certainly react as boldly. The United States has no shortage of ingenuity, ideas, innovation - it has led in energy resources development that have made the world we live in today. In oil and gas production, US levels are on the upswing while the production costs per barrel of crude oil have been managed well. The United States has strived towards less dependence on foreign oil, led by its domestic oil producers; and with the latest administration, this goal has turned into energy dominance. The reality faced by China is somewhat of a different picture. For example, domestic production of China's Daqing oil field has incurred costs that make production almost unfeasible at today's lower oil price levels. There are sharp declines of major, mature oil fields globally and the "easy oil" cannot be replaced automatically.
In the global context, the United States' investment in clean energy is nothing to scoff at. If we calculate the dollar figure per capita, the United States actually invests more than China, based on population levels in the respective nations (please review Bloomberg New Energy Finance slide above).
A partial analysis by CNN, stating how aggressively China is moving into wind, solar and power, etc., can mislead a viewer who has limited knowledge about the current and future role of oil and natural gas. Let's ask, where did the innovation begin and by whom?
CNN neglects to mention OIL AND GAS in the conversation about the future energy supply. There is no easy answer to the challenges we face in the coming decades. Hydrocarbons will continue to dominate in energy, demand will continue to increase, and the job of replacing the depleted resources with new discoveries and enhanced production from the existing fields will remain the responsibility of the innovators and their technologies.