To The Moon

Jimi Hendrix is one of my favourite artists. Musicality, creativity, authenticity, rawness, soul and power were wrapped up in this short 28 years of living. On the tombstone, his name, year of birth and year of demise were engraved. Yet, his milestones have been reduced to a “dash (—) on his tombstone. In this dash, there were many life-changing musical performances & extensions of musical boundaries. In this one dash, there are many transitions that have taken place.

Tombstone of one of the greatest musicians Jimi Hendrix (1942 - 1970)

From an electrifying artist, let us turn our attention to Electrification as the worldtransitfrom fossil fuel to sustainable energy.

Global renewable energy market

Global renewable energy market size 2020-2027

Published by Madhumitha Jaganmohan , Aug 6, 2021

The global renewable energy market is expected to continue its upward growth over the next years, reaching 1.1 trillion U.S. dollars by 2027. Environmental concerns regarding fossil fuels, rapid urbanization, and economic growth in emerging regions are all major factors that are contributing to the projected market growth.

Source: https://www.statista.com/statistics/1094309/renewable-energy-market-size-global/

Global renewable energy is expected to grow exponentially over time.

Global oil consumption and forecast

The world is energy hungry. Though there are other energy sources (hydro, wind, solar and more), the demand for crude oil looks to rise beyond 100 million barrels per day.

Daily demand for crude oil worldwide from 2006 to 2020, with a forecast until 2026*(in million barrels per day)

Daily global crude oil demand 2006-2026 Published by N. Sönnichsen, Oct 10, 2022

Global demand for crude oil (including biofuels) in 2020 fell to 91 million barrels per day and is projected to increase to 96.5 million barrels per day in 2021. The decrease in 2020 was due to the economic and mobility impacts of the coronavirus pandemic, including widespread shutdowns across the world. When compared to the daily oil demand of 86.4 million barrels in 2010, the increasing demand trajectory that occurred in the past decade is nevertheless still clear.

Source: https://www.statista.com/statistics/271823/daily-global-crude-oil-demand-since-2006/

Despite the recent drop (during Covid19), the consumption of crude oil looks set to overtake the pre-pandemic levels in a few years.Can we wean ourselves off fossil fuels?

Products & applications of oil

Application of oil from Canadian Association of Petroleum Products (CAPP) - graphics from Visual Capitalist

Source: https://elements.visualcapitalist.com/visualizing-the-products-and-fuels-made-from-crude-oil/

From the diagram above, the use of crude oil is not limited to gasoline and diesel. But there is a wide application of the products and byproducts that go into our daily lives from plastics, paints, synthetic rubber, wax, lubricants, grease, bitumen (road) and more.

Projected plastic use worldwide in 2019 and 2060, by polymer (in million metric tons)

 Global plastic use outlook 2019-2060, by polymer

Published by Lucía Fernández, Nov 9, 2022

Global plastics use is projected to reach 1.2 billion metric tons by 2060 - an increase of 168 percent compared with 2019. Approximately 195 million metric tons of that figure will be polypropylene (PP), accounting for 16 percent of polymers in use. Plastic waste generation is expected to have tripled by 2060, when compared with current levels.

Source: https://www.statista.com/statistics/1338900/global-plastic-use-outlook-by-polymer/

The global consumption of plastics is expected to grow from 459 million metric tons in 2019 to 1,229 million metric tons in 2060. This is a staggering growth of almost 168% in 40 years. Doesn’t this imply that we will need to see a demand increase for crude oil by 168% too by 2060 based on our demand for plastics alone? We will need to find other suitable and affordable replacements for plastics, bitumen (roads), lubricants and grease for our machines, infrastructure & daily living.

If we take another look around us, we are surrounded by plastics and their derivatives. Before we can steer away from fossil fuels and their various products, let us look at the transition needed. Time, finance, research, planning and much more are necessary to ensure a smooth transition.

The Ukraine lesson

We need to learn from the current Ukraine lesson as we transit into a more sustainable future. Europe hit Russia with sanctions following the Ukraine conflict. However, Russia is able to hold Europe at ransom due to Europe’s reliance on Russia for energy and oil. This has spiralled into inflation that is crippling Europe with the UK entering a recession. Be it the supplies of energy, grain or fertilizer, Europe looks to heading into a tough winter where households struggle to cope with the rising costs.

WSJ reports strike in UK as workers struggle to get by

WSJ has just reported that the UK will see one of the biggest strikes in recent years as workers struggle with costs of living. Source: https://www.wsj.com/articles/u-k-braces-for-biggest-strikes-in-years-over-the-holiday-period-11670540377?mod=Searchresults_pos4&page=1

Europe does not have the bargaining chips to put pressure on Russia as they are relying on Russia for important commodities like energy. They do not have the necessary options (in the near and mid-term) to transit away from Russia. It is not just their sourcing from other countries, it is also the strain that they will put on the global supply chain. One of the lessons taught by Covid is that the supplies are only as good as the supply chain.

Russian oil imports into the European Union and United Kingdom fell 35% to 1.7 million barrels per day (bpd) in August from 2.6 million bpd in January, but the EU was still the biggest market for Russian crude, according to the International Energy Agency (IEA). The largest tankers trading today are comparable in size and can carry up to 2 million barrels of oil. That's equivalent to 84 million gallons, or enough petroleum to fill over 5 million average sized automobile gas tanks.

How long is standard shipping from the US to Europe? Shipping may take anywhere from 10 to 16 business days for standard shipping.

Oil is supplied from Russia to Europe using pipelines. If Europe decides to import crude oil from North America to Europe, it needs to invest in its ports, oil tankers and supply chain (to handle, transport & store) to ensure that it can cope without relying on the Russian pipelines. This is possible but it will take time, space and investments. Unfortunately, this is inflationary in nature.

Before we put up various policies to transition from ICE (internal combustion engine) to EV (electric vehicle), let us ensure that we can have a smooth transition.

Hybrid vehicles versus Electric Vehicle (EV)

There are investors who do not consider hybrid vehicles as electric. If we based on technical specifications, this is valid. However, it is needful to have hybrids available as the world transit away from fossil fuels. This is a longer “cold turkey” as there will be lifestyle changes like finding charging networks from we commute.

Ideally, it would be awesome if we can totally abandon all ICE vehicles. Yet for some of us, such a transition via hybrid can be a less painful but needful transition.

Currently, there are limitations pertaining to the charging speed, the charging availability and the charging network.

Charging infrastructure for EV

One of the concerns is the availability of adequate charging infrastructure. Addressing these concerns adequately can speed up our transition. Using Singapore as an example, the lifestyle change includes looking for charging points. For the majority, we do not live in private facilities that come with charging points. Thus, there is a need for EV users to plan their charging with trips to charging points or selected shopping malls. While the car is being charged, the users do not need to spend the next hour waiting next to the vehicle. The users could arrange to spend time at the mall while waiting for the charge to complete. This could coincide with grocery shopping, a meal, a haircut or more. However, such charging infrastructure at the malls remains limited and it would not be a surprise to find queues for some popular charging locations. For some, the charge could be completed in an hour but a trip to the mall could last a good 4 hours - a movie, followed by a meal and ended with some grocery shopping. We can expect the charging technology to improve with time, meaning shorter charging times. But it would not improve the supply of charging points if the EV users decided to spend half a day at the mall.

This is reported by Business Today about Singapore’s EV adoption:

Singapore is ahead in the race towards electric vehicle adoption in the region, the island nation has confirmed at least 12,000 EV charging points will be installed across all Housing and Development Board car parks by the end of 2025. The Land and Transport Authority said it has awarded a tender to five lead companies for the deployment of the charging points, covering nearly 2,000 HDB car parks across Singapore. When completed, every HDB town will be EV-ready, LTA said. The Government targets todeploy60,000 EV charging points across Singapore by 2030, of which 40,000 will be in public car parks and the other 20,000 in private premises.

Source: https://www.businesstoday.com.my/2022/11/02/sg-to-have-60000-ev-charging-points-by-2030/

As of the end of 2021, there was a total of approximately 989 thousand motor vehicles in Singapore. In comparison, there were approximately 970 thousand motor vehicles in total in Singapore in 2012 as per Statista. Source: https://www.statista.com/statistics/956271/singapore-total-motor-vehicle-population/

A typical family would park their car in the public car park for the whole night. Ideally, it would be parked at the charging point. If the charging takes an hour, the family is unlikely to move the car to another location when the charging is done. Thus, this one slot would only service one car over a potential 12 hours of overnight parking at the public car park. For those who live in apartments, the charging availability would need to improve. I know of a Singapore condominium estate that houses 250+ households. They do not have a single EV charging point. These will improve over time but the “hoarding” of the charging/parking slot could be an issue. Imagine 900,000+/- vehicle owners “fighting” over 60,000 charging points in 2030 in Singapore.

Conclusion

The above are not excuses for us avoiding the transition into green energy. However, these are practical issues that would need to be addressed so that we are able to ease our transition away from fossil fuels.

Fortunately, there are more options available now seen in plant-based packaging, biodiesel and more. As the technology improves with the economy of scale, the transition will be more affordable. The fight against climate change needs to be a global effort. Thus, the transition must not be limited to developed countries but every country including developing countries will need to join in. Unfortunately, several countries are facing food, fuel (energy) and financial insecurities.

As per IMF, Interest-rate hikes have eased price pressures, but the weather, war and material costs could keep food prices elevated for longer

Source: https://www.imf.org/en/Blogs/Articles/2022/12/09/global-food-prices-to-remain-elevated-amid-war-costly-energy-la-nina

With livelihood at stake, no one will bother about green energy or electrification if they cannot afford to put food on their table. In such times, we need to look for more chances to collaborate and build bridges instead of barriers. Politics should be kept separate from the market. The push for political agenda and framing of common public enemies seems lightweight against the backdrop of the persistent pandemic, weather extremities, stubborn inflation, supply chain woes, food insecurity and rising energy costs.

It is time to get back to the negotiating table to work things out. It is time to fight the bigger enemies while we still have time. To transit, we need to do it together. Together, we are better.

@TigerStars

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