Most energy consumed by humans currently comes from fossil fuels, a source that will be exhausted within decades to centuries. Burning these fuels adds CO2 to the atmosphere, which affects the climate.

Many of the greenhouse gases (GHGs) in the atmosphere result from humans burning energy resources. The type of resource being burned depends on the value given to different properties of different fuels. The need for lowest cost and an ability to stockpile supplies favors coal, the need to minimize air pollution favors natural gas, and the need to be easily transported favors fuels derived from petroleum. As the need to limit emissions of GHGs becomes more pressing, it is reasonable to assume that other changes will occur.

Before agriculture, humans used fire to keep warm, cook their food, make their hunting more efficient, and promote the growth of wild plants they could eat or that would attract their preferred game. Their population density was low, and they moved frequently, so they were probably not limited by access to firewood.

As agriculture developed, it became necessary to remain in one location for extended periods. Initially, because the forests had to be cleared anyway, firewood was plentiful, and prodigious amounts were burned. A typical colonial family in New England burned 100 to 145 cubic meters of wood each year, translating to about 23 kilowatts of annual energy use. As the average colonial household contained about six people, the per capita energy use was about 4 kilowatts. For comparison, the United States today has a per capita use of about 11 kilowatts, whereas the global average is about 2.5 kilowatts per capita.

Another energy source available to early settlers was water power. In a new settlement the first major building to be constructed was usually a sawmill, often before churches or schools were built. By 1840, over sixty-five thousand water-powered mills had been operating in the United States. In particularly favorable locations such as Niagara Falls, Rochester, and Minneapolis, large flows over waterfalls permitted many large mills to coexist. Dependent on rainfall, removed by floods, and usually limited in scale by available hydraulic head and river flows, water-powered mills lost out to steam power, produced from coal.

Energy from coal did not fluctuate with the seasons, factories could grow, and they could be located where infrastructure existed to transport resources and products. Furthermore, they could become concentrated in those locations, providing jobs for thousands of city dwellers, rather than being stretched out along often unnavigable rivers.

By the middle of the nineteenth century the Industrial Revolution had begun, largely as a result of the steam engine. In addition to the large steam engines powering factories, smaller ones were adapted to pull trains, and with this development it became easier to transport an energy resource from where it occurred naturally to where it was needed.

To be valuable, resources need to bring in a profit when and where they are sold. The costs of bringing a resource to market, including extraction, processing, and transportation, as well as the market price, will determine whether that resource can be utilized. For example, abandoned gold dredges sit near the headwaters of dozens of streams in Alaska, intact except for their copper wires. The costs of dismantling and transporting the other parts are greater than their market value.

Coal requires little processing, so the cost of bringing it to market entails only a trade-off between extraction and transportation. More expensive mining techniques can be used where transportation costs are lower. Coal quality (heat content, sulfur content, and so on) varies, and long-term contracts may also distort prices, resulting in remarkable discrepancies. In 2006, for example, the open market value of a ton of coal mined in Wyoming was $9.03, with a delivered price in Wyoming of $17.61; the open market value of a ton of coal mined in Pennsylvania was $37.42, with a delivered price in Massachusetts of $68.02.

The railroads and the coal industry have had a mutually beneficial relationship: Before the advent of diesel locomotives trains were a major coal user, and coal has always been a major fraction of the freight moved by trains. In addition to powering factories and trains, coal was used to heat homes. It had gradually replaced wood and by 1885 it heated more homes than wood did. Basement furnaces replaced stoves and fireplaces, and the low cost of coal meant that homes could be heated even with windows open in the middle of winter. The combined effect of hundreds of coal-burning furnaces, however, polluted the air, and the shipping, handling and storing of coal were very dirty operations.

Because it is a sedimentary rock, formed in swamps hundreds of millions of years ago, coal does not burn cleanly, but forms ash and clinker that need to be disposed of. Much less labor-intensive than wood stoves, coal furnaces still needed people to attend to them, to make sure coal was getting to the furnace and ash was being removed. As soon as oil or gas could be used, it quickly replaced coal for home heating.

Oil became an energy resource after ways were discovered to extract kerosene from it, which was used for lighting. By the beginning of the twentieth century large reliable supplies had been developed, largely in Texas, and railroads and barges transported it to markets elsewhere. The invention of the automobile and the oil burner during the first decades of the twentieth century made oil the most important energy resource in Europe and America. Crude oil must be extracted from the ground, transported to a refinery, processed, and then transported again before its useful components, gasoline and other fuels, can be used. Before this, it must be discovered.

An economic resource must be sufficiently abundant so that the costs needed to develop it can be paid off before it runs out. When a company invests in refineries and distribution systems it should know that it has sufficient reserves on hand to justify those expenses. These are called "proven reserves." To exploit these reserves, the resource must be extracted, processed, and transported and still return a profit to the company. The amount of proven reserves is a function of all of these costs as well as the market price of the final product. A company which is neither finding new resources nor selling old resources can still see change in the amount of proven reserves it owns as these costs and prices change. As the price of oil rose in 2007, the vast oil sands in Alberta, Canada, became profitable to extract and so were, in many tabulations, added to the list of proven reserves. When they are included they put Canada second, after Saudi Arabia, in total proven reserves.

In 1949 M. King Hubbert suggested that production of a nonrenewable resource would follow a bell-shaped curve, reaching a peak when about half of the resource had been consumed. Since then there has been considerable discussion about whether or not some region, defined geologically or politically, has reached its "Hubbert's peak" with respect to some resource. Although details vary, emotions run high, and apocalyptic predictions sprout up like weeds, a consensus is gradually developing that the world peak for conventional oil will have been, or will occur, sometime between 2005 and 2050.

As is the case with coal, natural gas requires transportation to a market before it has value. When it is encountered in oil fields with no access to pipelines, transportation costs often exceed market prices, so the natural gas is burned off, or "flared." Technological developments in the 1940's permitted the construction of extensive pipeline systems to distribute natural gas in developed countries. By 2008, there were over 480,000 kilometers of pipelines in the United States. Where pipeline infrastructure exists, much of the cost of natural gas is still in its transportation. In 2007 in the United States, for example, the average price for 28.3 cubic meters at the wellhead was $6.39, while residential users paid $13.01.

Renewables face similar distribution requirements. Solar- or wind-generated energy needs to be shipped to a market, and ideally needs to be stored until it is most needed. As each conversion step has inefficiencies, this will add to the costs of renewable energy resources.

Climate change scenarios rely on estimates of the total amount of carbon-containing fuels which will be burned and the rate at which this will occur. Neither estimate is known well; however, guidance is provided by exploring resource utilization history. As reserves of petroleum are depleted, it is reasonable to expect prices to rise and alternative fossil fuel resources, such as oil sands and oil shales, to be developed. Whether or not such unconventional fossil fuels are included in climate model projections can make a substantial difference in the predicted CO2 levels in the atmosphere.

For renewable energy resources to compete, means must be developed to store their energy and transport it to markets when and where it is needed. For example, wind energy is unlikely to be directly available during hot spells, which are usually accompanied by still, high-pressure air--yet, that is just when peak electric loads to run air conditioners are greatest. If wind energy could be stored in batteries, hydrogen, pumped-storage facilities, and other repositories, then it would be available when most needed. If it could be shipped and stockpiled safely and efficiently, then huge installations of windmills could be developed, far from populated or scenic areas, perhaps in developing countries.

Bibliography:

1)         Campbell, C. J., and J. H. Laherrere. "The End of Cheap Oil." Scientific American 278, no. 3 (1998): 60-65.

2)         Cloud, P. Resources and Man. San Francisco: W. H. Freeman, 1969.

3)         Energy Information Administration, U.S. Annual Energy Review, 2006. Washington, D.C.: Government Printing Office, 2007.

4)         Wolfson, Richard. Energy, Environment, and Climate. New York: W. W. Norton, 2008.

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