Invited Perspective: Switch: Coming Your Way

Source: ExxonMobil’s 2015 The Outlook for Energy: A View to 2040.
Fig. 1—The short-long term.

Questions posed by 2015 SPE President Helge Hove Haldorsen

Answers provided by Professor Scott Tinker, Director of the Bureau of Economic Geology, The University of Texas at Austin (UT)

Dear Fellow SPE Member,

This is my last JPT column as your 2015 SPE President. Come end-September at the Annual Technical Conference and Exhibition (ATCE) in Houston, you will witness “the switch” to 2016 SPE President Nathan Meehan. There is another, much slower switch going on as well.

Recently, the G7 members (Council on Foreign Relations 2015) announced their ambition to switch away from fossil fuels altogether 85 years from now in 2100. They also agreed to make a switch in electricity generation by 2050 so that 100% of electricity generation comes from “clean” sources from this time onward. This call to long-term decarbonification action, if followed up by laws, rules, regulations, incentives, and a carbon dioxide (CO2) tax, will give new momentum to a long-term global energy-mix switch away from fossil fuels.

This “85 years from now ambition” must, of course, be held up the against the “next 30-plus year projection” that more, not less, oil and gas will be needed during this period (Figs. 1 above and 2).

Fig. 2—The long-long term. Chart created by Helge Hove Haldorsen.


Holding these two seemingly conflicting thoughts in our minds at the same time is difficult, but very important. Being for fossil fuels until new viable energy sources are ready to take over does not mean being against alternative energy and renewables and massive “Manhattan Project”-style research and development to make them viable.

On the contrary, as pointed out by Alex Epstein in his book The Moral Case for Fossil Fuels, if we look at the big picture of fossil fuels (which provide more than 80% of the global energy supply in 2015 while sun, wind, and geothermal provide 1% to 2%) compared with the alternatives, the overall impact is to make the world a far better place. This is why exploration and production (E&P) professionals for the foreseeable future will continue to have “making the world a better place” in their job descriptions.

Scott Tinker, Bureau of Economic Geology director and professor at The University of Texas at Austin, along with film director Harry Lynch recently produced an award-winning, thought-provoking documentary titled Switch, which discusses the “switch” from one global energy mix to the next. Tinker concludes that all forms of energy sources have positive and negative issues associated with them and the winners will be those sources that best navigate success in the 4E space:

  • The Energy supply must be sufficient to meet global demand and to solve “energy poverty” (i.e., to supply energy to the 1.3 billion people without electricity and the 2.6 billion using wood or dung stoves for cooking inside).
  • The supply must be Economically competitive to generate or produce.
  • The Environmental footprint including air, land, and water must be increasingly minimized (both during energy production and energy use).
  • We must become more Efficient in our generation and use of energy.
  • Finally, the whole E&P ecosystem must relentlessly strive for E&P 2.0 in all four E dimensions by attracting the best minds to science, technology, engineering, and math (STEM) and by incremental and radical E&P technology and E&P business model innovations.

We invite you to read our exchange on these important topics facing the planet, every country, every competing energy source, every energy company, and every SPE member.

Why did you embark on this project?

Harry Lynch and I felt it was time for a film and associated website on energy that was objective, fact-based, and without advocacy. Too often, energy documentaries start with an advocacy position and edit accordingly, sometimes bending reality to lead the viewer. We agreed we would not do this.

What would you say are the main points in Switch?

The main takeaways in Switch are as follows:

  • The scale of energy demand is huge.
  • Energy transitions take a long time.
  • Energy security—affordable, available, reliable, and sustainable—drives energy behavior.
  • Energy transforms lives for the better, which is something that many other advocacy-based documentaries do not bring out.

How has the Switch project become bigger than a documentary?

The Switch Energy Project comprises the film, a major video-based website, the Switch Energy Lab (all new video content for primary and early university education), and social media. The project has hit a tipping point: The film has now surpassed 10 million viewers, more than 30,000 educators have requested personal copies for the classroom, and it is available on Amazon.

Will we go straight from fossil fuels to renewables or will a “natural gas age” be a bridge?

There is an abundance of natural gas in the world. The so-called unconventional reservoirs (tight, coalbed, and shale gas) are just coming online globally and beyond that are hydrates and other resources. Because natural gas is such a versatile fuel, it will be here for a while. That said, we are always bridging from one fuel to another.

Scientist Jesse Ausubel described “decarbonization” (The Rockefeller University 2003) as the transition from hay and wood to coal to oil to natural gas, which has gone on for the past century and a half. Each of these energy sources has had more hydrogen and less carbon than the previous, and each is a denser form of energy and thus more efficient. Nuclear (uranium and thorium) represents a noncarbon form of energy that is denser still.

The primary challenges with renewable sources of motion (wind, hydro, waves, and tides), heat (solar and geothermal), light (solar), or carbohydrates (biofuels and biomass) are that these are substantially less dense forms of energy and some of them are intermittent: the motion, heat, and light can come and go quickly. Low density and intermittency make them less efficient and more expensive, on average.

In addition, global population demographics show a shift from rural areas to urban areas. Low-density renewable energy needs to be transmitted to consuming cities. Thus, some argue that renewables are not the future, but I think a blend will be the reality.

Economist Adam Smith said that “the invisible hand” of the market picks the winner(s). Do you think that the fuel “switch” will happen more because of the market or because of government incentives, mandates, laws, and regulations?

Although usually well intended, governments are, nonetheless, very poor at picking energy winners, in part because political pressure from conflicting constituencies often drives policy. For example, the use of corn ethanol in the United States is driven by farm policy, not energy policy. The other challenge that governments face is that energy resources vary by region. Nations or states have varying amounts of available sun, wind, geothermal, rainfall, coal, oil, natural gas, uranium, waves, tides, or farmland. Local regions thus use the energy that they have, which makes them more efficient.

Rather than orchestrating from above, it is better in my view for governments to consider what I call the four pillars of energy security—affordability, availability, reliability, and sustainability—and incentivize local governments to improve the energy mix by using the resources that they have, regardless of source. There are cases where the “war on carbon” has actually resulted in the unintended consequence of increased CO2 emissions and higher cost of energy. For example, compare recent increased emissions and cost of electricity in Germany, following moratoria on fracturing and nuclear, to the US without moratoria, where CO2 emissions have fallen substantially and cost of electricity remains relatively low.

While appropriate incentives and regulation are necessary to ensure that major industrial processes are done well, regulation must be exercised with caution to minimize unintended consequences.

Will innovation and “creative destruction” be important driving forces for the “switch” to evolve?

Innovation drives all technology advances. Very few commodity transitions occur as a result of supply exhaustion. Instead, a scarcity of supply drives price up, and technology and innovation create options that are more affordable. Thus, “peaking” is a function of changing demand more than a scarcity of supply. This will happen with oil and eventually natural gas, although the earth contains an abundance of natural gas.

Is there a conflict between oil and gas and renewables, or is it more of an “all of the above” situation to fully supply the world?

Balanced and diverse portfolios make sense in real estate and stock and bond investments, and they make sense in energy. One needs to be cautious with regard to that apparent conflict between fossil fuels and renewables. It may be motivated in part by politics—in the energy sense, politics means desire for control such that the political groups that would benefit by seeing today’s energy change to something else are motivated to create the change, using whatever means and tools necessary.

Is a career choice in petroleum engineering and production geology a good one for millennials in 2015?

My oldest son is in graduate school in geosciences and my second son is in graduate school in petroleum engineering. The jury is still out on if my third son and my daughter will pursue energy as a career.

When do we stop using oil, and why will we?

Petroleum products are present in every facet of our lives and will be around for a long time. Without petroleum, we are left hungry, naked, and shelterless. Petroleum has helped to lift the world from poverty and will continue to do so. That said, the combustion of gasoline, diesel, and jet fuel to move vehicles of various kinds will not go on forever. Not because oil will run out, but because the demand for oil as feedstock for transportation fuels will be dampened by higher cost and the increased efficiency and affordability of other options.

Is the carbon bubble a myth or a reality?

The “carbon bubble” is a relatively new term, seemingly made popular by Bill McKibben, an environmental activist, in Rolling Stone magazine (Rolling Stone magazine 2012). The “bubble” claims the cost of CO2 [in intensifying global warming] is not accounted for in a company’s market valuation. As shown in the film Switch (acclaimed by environmental groups, industry, governments and educators as a truly objective and inclusive look at the global energy scene), no form of energy is perfect and all forms have externalities when considering the full energy production-distribution-consumption cycle.

To be sure, coal and oil, and to a lesser degree natural gas, release CO2 when combusted and have other environmental impact associated with their extraction and transportation and use. Yet, they also have helped lift billions of people out of poverty by providing affordable, available, and reliable energy needed for shelter, clothing, food, education, and electricity. Two billion people still want for these basic human needs. Recent studies attempt to quantify and account for the net financial and environmental costs and benefits of energy, including intermittency. Natural gas and nuclear come out pretty well in these studies, just as they did in 2011 in the film Switch.

Do we also have to do some personal “switching” to reduce demand and improve efficiency?

Until we made Switch, I was not convinced that my individual behavior mattered. But my attitude soon “switched.” My family retrofitted our home over several years during the making of Switch with improved insulation, a radiant barrier on our roof deck, improved lighting, and a different water heater. We even bought an electric golf cart instead of another car for local errands and activities. These things will take many years to pay out economically, but they pay out immediately in terms of decreased energy use and associated environmental impact. My kids are now more aware of energy and how important it is to modern life. And this cultural change translates to the workplace, where major efficiency advances can be made. The subtle switch is thus in the way we all think about energy.


So, there you have it. Oil and gas will be very important elements of the global energy mix for a very long time, but not forever as “the switch” has already started. In 2040, 25 years from now, oil and gas may still add up to more than 60% of the global energy mix, according to Exxon­Mobil’s report, 2015 The Outlook for Energy: A View to 2040.

If natural gas starts being switched for coal to more quickly curb CO2 emissions, this oil plus gas global energy mix percentage may go even higher.

E&P must always make sure it is a part of the solution. Nothing is, therefore, more important than everyone in the E&P ecosystem working very hard to maintain the industry’s license to operate. I predict that great stakeholder and public engagement to build trust will be a competitive advantage.

Picture a large city like New York or London in the 1890s. I bet it would be hard to believe that all those horses, approximately 50,000 in London and 100,000 in New York (Historic-UK 2015), would soon vanish. Fast forward to 1933 and the same streets were full of cars. Automaker Henry Ford put it this way: “If I had asked people what they wanted, they would have said, “A faster horse!” (Goodreads). In 2100, we may be able to cancel gravity altogether and arrive at ATCE in flying cars like in the futuristic cartoon show The Jetsons.

As you may have discerned, I am not worried for a second about the future of energy. In his book, The Innovation Zone: How Great Companies Re-Innovate for Amazing Success, Thomas M. Koulopoulos said, “Mankind’s ability to innovate, adapt and change is ultimately the most encouraging and optimistic aspect of human nature.” Perhaps, the best mental image to prove this is to put a picture of a flint arrowhead (the most high tech in 15,000 BCE) next to a picture of astronaut Neil Armstrong stepping onto the moon on 20 July, 1969. Think about it!

On a final note, a huge thank you very much to SPE members and SPE staff for all your help and support throughout my year as your 2015 President. You are such a force for good! It has been a huge honor to represent the best and finest professional energy association in the universe—on a volunteering mission to share!


Ausubel, J.H. Decarbonization: The Next 100 Years. 50th Anniversary Symposium of the Geology Foundation, Jackson School of Geosciences, University of Texas, Austin, Texas, 25 April 2003. (accessed 8 July 2015).

Council on Foreign Relations. 2015. CFR Backgrounders: The Group of Seven (G7), (accessed 8 July 2015).

Goodreads. Henry Ford Quotes, (accessed 8 July 2015).

Johnson, B. Great Horse Manure Crisis of 1894. Historic UK, (accessed 8 July 2015).

Koulopoulos, T.M. 2011. The Innovation Zone: How Great Companies Re-Innovate for Amazing Success. Nicholas Brealey America.

McKibben, B. 2012. Global Warming’s Terrifying New Math. Rolling Stone, 19 July 2012, (accessed 8 July 2015).

Invited Perspective: Switch: Coming Your Way

Helge Hove Haldorsen, 2015 SPE President

01 August 2015

Volume: 67 | Issue: 8


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