In this blog post, we will examine whether shale gas can replace renewable energy as the main energy source in the Third Industrial Revolution, and the reasons and possibilities for this.
A time of revolution has arrived. Amidst the worsening economic situation caused by the financial crisis in the US and the fiscal crisis in Europe, coal and oil prices are rising sharply, as if to mock the situation. Change is necessary. In order to predict what kind of change is needed, we need to look back on similar experiences in the past.
In the late 18th century, the advent of coal led to the First Industrial Revolution, which was driven by steam engines powered by coal. Railways were needed to move steam locomotives, and iron was needed to build railways. The construction of railways required enormous amounts of capital, incomparable to that needed for textile factories, ships, and canals, which led to the emergence of large, centralized railway companies. A century later, in the late 19th century, the discovery of oil led to the development of the automobile industry, chemical industry, and electrical industry, which were powered by oil, and the Second Industrial Revolution took place. During this period, oil was the main source of power, so large-scale capital was required, and a vertical economy was advantageous. The highest values at the time were a centralized structure, efficiency, and hard work.
Thus, we can infer that changes in energy sources brought about industrial revolutions through the first and second industrial revolutions. Then, what kind of energy source will be needed for the third industrial revolution?
Jeremy Rifkin, the author of this book, sees renewable energy as the main energy source of the third industrial revolution. Unlike coal and oil, this energy is not centralized but distributed (solar, wind, hydro, geothermal, biomass, tidal, etc.) and can be obtained anywhere. Since most of these energy sources, such as the sun that rises every day, the wind that blows frequently, and the heat that remains in the ground, are essentially free, the author believes that the Third Industrial Revolution will be organized around renewable energy. Renewable energy is inherently decentralized, so it does not fit into the centralized hierarchy that has existed until now and requires a collaborative mechanism. The author speculates that the combination of Internet communication technology and renewable energy will bring about the Third Industrial Revolution.
In the 21st century, hundreds of millions of people will produce green energy directly in their homes, workplaces, and factories and share it with each other through an intelligent distributed power network, or “intergrid.” The author presents the following five elements as the core elements of the Third Industrial Revolution.
1. Switch to renewable energy.
2. Transform buildings on every continent into mini power plants that can produce renewable energy on site.
3. Conserve irregularly generated energy by spreading hydrogen storage technology and other storage technologies throughout all buildings and infrastructure.
4. Use Internet technology to transform the power grid on every continent into an energy-sharing intergrid that operates on the same principle as the Internet.
5. Replace transportation with power-connected and fuel cell vehicles, and enable the buying and selling of electricity on a continent-wide, bidirectional smart power grid.
In other words, he argues that a new energy system consisting of buildings as power plants, the storage of a certain amount of energy in the form of hydrogen, distribution through smart grids, and power-connected, pollution-free transportation will open the door to the Third Industrial Revolution.
However, I believe that shale gas, not renewable energy, will be the main energy source driving the Third Industrial Revolution. Shale gas is a gas that is trapped in shale layers, which are rock formations where organic matter has been converted into oil, and is widely distributed without being concentrated in one place.
First, when the author wrote this book, the financial crisis in Europe had not yet occurred. Therefore, he mispredicted the future by overlooking the importance of shale gas and our attitude toward renewable energy (especially in Europe). The author viewed countries with decentralized systems, such as Spain and Italy, as models for the Third Industrial Revolution, rather than countries with centralized structures, such as the US, the UK, and Germany. However, Spain and Italy are currently struggling with financial crises.
Second, no matter how renewable and environmentally friendly renewable energy is, it cannot match conventional fuels in terms of energy efficiency and density, and most of it is irregularly available. The energy efficiency of shale gas is higher than that of solar (15% under optimal conditions) and wind (25%), which are representative renewable energy sources.
Third, shale gas reserves are also considerable. Based on global natural gas consumption in 2011, the world’s recoverable shale gas reserves are sufficient to meet demand for the next 60 years. With the availability of more efficient shale gas, there is no reason to use renewable energy. In addition, shale gas can be used to generate electricity using existing gas-fired power plants, which requires little additional equipment costs. On the other hand, renewable energy generation requires everything from site selection to the installation of necessary components, which entails considerable costs.
For these reasons, I believe that shale gas is the next-generation energy source that will replace oil, which is facing depletion, nuclear power, which raises safety concerns, and renewable energy, which is inefficient in terms of price. The third industrial revolution must shift from the existing centralized system to a decentralized system with shale gas as the main energy source.
The first industrial revolution led to the development of densely populated urban areas, apartment complexes, row houses, skyscrapers, and multi-story factories, while the second industrial revolution created flat suburban residential areas and industrial complexes. The third industrial revolution will transform all existing buildings into dual-purpose spaces that serve as both residences and mini power plants. For example, it will be possible to build small power plants when constructing apartments. Small gas turbines that can control the amount of power needed will become a promising industry, and this may include LNG transport ships and LNG base construction. This is because shale gas is difficult to transport due to its large volume. For the Third Industrial Revolution, which will be driven by shale gas, it must be possible to convert gas into an energy source. In other words, GTL (Gas-To-Liquid) technology, which liquefies gas, must be developed.
The Third Industrial Revolution is already upon us. I believe that, as Professor Jeremy Rifkin argues, the era of energy supply and demand through distributed grids will come. However, I think that shale gas, not renewable energy, will be the driving force behind this change. Korea must also invest in shale gas, which the International Energy Agency (IEA) has even called an “energy revolution,” to lead the Third Industrial Revolution.
