Petroleum, Natural Gas & Renewable Energy

Final Assignment

Professor: Dr. Amit Mor

Participant ID: 478727

Section 1
Question 2
The global energy landscape is driven by the technological advancements in the industry and is
constantly changing and evolving. Understanding the trends that the energy industry is going in
is crucial for businesses, policy makers, and researchers for the proper adjustments to the market
conditions. The following analysis discusses the primary energy consumption forecast by fuel
until 2050 as projected by three of the major reports. These reports are the International Energy
Outlook 2030 which was published by the United States Energy Information Administration
(IEA), the World Energy Outlook 2023 by the International Energy Agency (IEA), and the World
Energy Transitions Outlook 2023 published by the International Renewable Energy Agency
(IRENA).

A. Presentation of Charts or Forecasts/Scenarios

EIA Report: International Energy Outlook 2023
The EIA forecasts a significant increase in global energy consumption throughout the world.
Fossil fuels such as coal, oil, and natural gas continue to dominate the energy mix until 2050.
The share of renewables, however, is projected to substantially rise until then.
Key Data Points:
● Fossil fuels will decrease from 80% in 2020 to 70% by 2050.
● Renewables will increase from 15% in 2020 to 25% by 2050
IEA Report: World Energy Outlook 2023
The International Energy Agency’s forecast indicates a more aggressive shift towards renewable
energy than the Energy Information Agency. These will be driven by global climate policies and
technological advancements that are unforeseen by the EIA. Fossil fuels will still play a
significant role but they will decline noticeably.
Key Data Points:
Fossil fuels will decrease from 75% in 2020 to 40% by 2050
Renewables will increase from 20% in 2020 to 40% by 2050

B. Comparison of Results and Main Assumptions

● EIA vs. IEA: The EIA assumes a more gradual transition than the IEA. Both see an
increase in renewable energy use but the IEA expects a more significant decline of fossil
fuel use.
● EIA vs. IRENA: IRENA produces a very drastic shift towards renewables compared to
the other reports. It also expects a lower reliance on fossil fuels by the year 2050. Overall,
the EIA’s prediction is more conservative than the IRENA report.
● IEA vs. IRENA: Both of the organizations predict a substantial growth in the renewable
energy sector while IRENA expects a more aggressive decline of fossil fuels.
Main Assumptions:
 Economic Growth Assumptions
The EIA expects moderate global economic growth and a significant energy demand
increase in developing countries around the world. The IEA assumes that there will be
higher economic growth rates than there are now which will lead to an increased energy
demand especially in emerging economies. The IRENA report assumes a greater
emphasis than the IEA on sustainable growth and the decoupling of economic growth and
energy consumption in these countries.

Technological Advancements
The EIA assumes incremental technological improvements rather than sudden changes
and also assumes a gradual adoption of renewables. The IEA assumes a significant
advancement in energy efficiency and renewable technologies. The IRENA report
assumes rapid adoption, innovation, and deployment of renewable energy technologies
throughout the globe.

Policy Measures
The EIA assumes current policies when it comes to their forecasts but does include
gradual changes to these policies. The IEA incorporates ambitious changes and moves
towards climate awareness policies that will include carbon pricing and subsidies for
renewable energy technologies. The IRENA report assumes aggressive changes towards
global climate policy and a strong international cooperative setting.

Market Conditions
The EIA assumes stable energy prices with fluctuations based on periodic supply and
demand dynamics regionally. The IEA assumes volatile market conditions with
geopolitical factors influencing the price of energy. The IRENA assumes that the market
environment will transform greatly and be driven by the rapid adoption of renewable
energy.

C. The reasons for the differences in the results of the forecasts and scenarios are
methodological, geopolitical, different assumptions about renewable energy adoption,
technological uncertainty, policy and regulatory environments, and economic scenarios. These
variables were manipulated in different ways in each one of the different reports which greatly
affected the results of the forecasts and scenarios.

Section 2
Question 3
1.
a) According to OpenAI ChatGPT-4, Methane is an extremely potent gas with significant impact
towards global warming relative to C02. According to the IPCC, methane’s effect on global
warming is over 80 times greater than C02 in a 20-year span, and one quarter of that over a
100-year period. Methane’s global warming potential is due to its greater ability in trapping and
retaining heat in the atmosphere. While C02 lasts centuries in the atmosphere, methane has an
ephemeral presence limited to nearly around a decade. However, the immediate impact of
methane in the atmosphere is far more potent within the shorter time span, causing substantial
negative effects towards global warming and climate change (GPT-4.0).

b) Methane’s global warming potential over a period of 100 years is 25 times greater than that of
C02 per equivalent unit of mass. The impact on global warming and the atmosphere is therefore
significant if switching from contemporary fossil fuels like coal to only methane and natural gas.
Particularly when studying the effects of oxidation from methane into C02, we find the global
warming potential increases along all durations of time resulting in greater impact and allowing
climate scientists to better analyze the long-term impact of methane on global warming.
Therefore, when observing the mass-for-mass impact of methane and C02 on global warming
potential, methane is far more potent, approximately 25 times more than C02 on a 100-year time
scale, and greater when considering the oxidation effect (Boucher et al., 2009).

c) In discussing the advantages and disadvantages of fracking, a process which breaks apart
rocks to release gasses by injecting fluid into cracks below the earth’s surface, Muller (2022),
describes the process in detail to illustrate the dangers of methane associated with the process. As
the primary component of natural gas, methane is more powerful than carbon dioxide with a
global warming potential 83 times greater over a 20-year period. This is due to methane’s higher
potency in the short-term resulting in more rapid atmospheric destruction. However, in the long
term C02 is more destructive to the atmosphere lasting centuries. Therefore, Muller claims that
methane is in fact better for the environment and fracking as a method of energy supply because
the global warming potential and short atmospheric duration of methane compared to C02 is
lower as well as the risks of leakage in the fracking process (Muller, 2022).

2. My advice would be to use the value as presented by Boucher (2009), given that the value is
most comprehensive in providing the relevant information from a scientific consensus and from
a holistic perspective considering the effects of oxidation and multiple time frames of methane’s
existence in the atmosphere.

3. The sources above illustrate the GWP of methane and equivalent emissions of C02 for use in
electricity generation. Methane’s high potency and GWP 80 times greater than C02 over a
20-year period, as well as the factor of oxidation in methane resulting in a GWP of 25 times
greater than C02 over a period of 100 years make it problematic for electricity generation since
methane is primarily acquired by fracking. While methane is cleaner than coal, producing less
energy per unit of C02, when accounting for leaks in the fracking process the GWP value
significantly increases and exceeds or meets the rates of coal emissions. The potent nature of
methane as well as the danger of leaks from fracking raise the C02 Equivalent emissions and
negatively impact the environment on all time frames.

Question 4:
Photovoltaic technology is one of the major components of renewable technologies that
will assist the world in the transition to renewable energy. The implementation of PV projects in
large scales and diverse environments will provide us with valuable information for countries
that want to increase their photovoltaic usage. This analysis will compare two 250MW PV
installations that were implemented in the UAE and Germany and will focus on key metrics that
would influence the project's performance and success. Based on the projects we will provide
policy and implementation recommendations to similar projects based in Israel.
The measures of comparison that I will be comparing are solar irradiance and climatic
conditions, cost and economic viability, technical specifications and performance, and regulatory
environments and market conditions. The UAE benefits from high solar irradiance because it has
over 350 sunny days each year. This makes it one of the most ideal places for PV installations.
The desert climate of the area ensures that the PV projects are hit with consistent sunlight. This is
important but it is also important to note that high temperatures can negatively affect PV
performance. In Germany, there is a significantly lower solar irradiance because it has fewer
sunny days than the UAE and the weather is more volatile and fluctuates more. This results in
lower yields for the projects in terms of energy output but it also demonstrates the feasibility of
PV in less ideal conditions. The weather in Israel is more comparable with the solar irradiance of
the UAE, with abundant sunlight throughout the year and a Mediterranean climate that supports
the high efficiency of the PV panels. The similarities in the climates of these countries suggest
that the countries outputs and efficiencies would be similar.
In terms of cost, the cost of PV projects in the UAE is relatively low due to their policies
and favorable financing conditions. They have many government incentives at play and due to
their high volume, can also leverage economies of scale to further reduce their prices to some of
the lowest in the world. Germany has more expensive PV projects due to the higher labor costs,
the strict regulations, and the less favorable financing. These create higher overall costs in spite
of the favorable government conditions and well-established energy markets. Israel can also
achieve high efficiencies and low cost like the UAE if they follow their lead and their policies
and market conditions. They can leverage incentives and attract foreign investments but the
overall costs may still be higher than the UAE because of local conditions that are not favorable
for economies of scale.
There are many factors that lead to the performance of PV projects within a country.
Based on the comparison of these variables, a 250 MW project in Israel is likely to perform
similarly to a project in the UAE but the differing market conditions may increase Israel’s
start-up and maintenance costs. By leveraging the strengths of both of the countries' examples,
Israel can strive to develop a successful and efficient PV system that contributes to the country's
renewable energy goals.
Section 3
Question 6
A) The energy crisis of 1973-74 was a result of the Yom Kippur war and unilateral American
support of Israel. OPEC, the organization of petroleum exporting countries made up of several
Arab oil producing states, hindered oil exports to the U.S in protest of the 2 billion dollar aid that
President Nixon supplied to Israel. Arab countries opposed the US economic and political
support of Israel and leveraged their dependency on oil exports, weaponizing their greatest
commodity against them. In addition, the embargo strengthened the bargaining power of Arab
states against western oil companies and unfortunately for the west, resulted in an unprecedented
increase of oil prices and an economic shock that led to high global inflation. Prior to the war
and embargo, one barrel of oil was traded at approximately $2.90, and by 1974 the price
increased to $11.65 (Pollack, 1973). Though the embargo only lasted several months, inflated oil
prices lasted throughout the decade and influenced domestic policy and lawmaking in the United
States where the government attempted to minimize energy dependence and reduce
consumption. Following the 1973 energy crisis, at the end of the decade in 1979 the Iranian
regime fell under Shah Pahlavi during the Islamic Revolution, replacing him with religious
leader Ayatollah Khomeini. The revolution involved violence and civil unrest with domestic
instability. Iran’s nationalized oil refineries were met with strikes by tens of thousands of
employees resulting in a sharp decrease of production and since Iran was a major exporter of
petroleum, the turmoil in domestic politics led to the decline of oil supply and shortages all over
the world as well as barrel prices rising by nearly double within the span of one year
(Schumacher, 1985).

B) The energy sector was the primarily affected sector of the global economy during the
respective 1970’s energy crisis originating from the Middle East. The subsequent embargos by
OPEC as well as the Iranian revolutions highlighted weaknesses in the economic framework and
energy infrastructure of the United States. Discernibly, the energy sector was severely impacted
due to OPEC’s embargo, causing oil prices to spike and quadruple in barrel price. The United
States heavy reliance on oil imports for domestic energy needs was exposed and drastically
reduced with oil imports decreasing by 1.2 million barrels per day, a 19% change from the
previous quarter. The reduction in imports resulted in a loss of American oil supply by 8%, since
imports accounted for 34% of U.S consumption. The embargo also exposed vulnerabilities in the
American domestic energy sector from a regulatory and management perspective. Previous
shortages and lack of reserves became amplified during the 1970’s. In 1971, predating the Yom
Kippur war and embargo, the Northern Illinois Gas Company experienced shortages in supply
which were exacerbated later in 1973 in lieu of import restrictions. In the Midwest regions of the
United States, energy supply shortages resulted in widespread job loss, school closures, and
economic stagnation. Likewise, electrical utilities and infrastructure suffered to meet demand and
were met by unaccustomed regulations from policymakers to control supply and demand.
Companies faced increased scrutiny and as a result corporations like Consolidated Edison, a
utility company in New York City required government bailouts to avoid bankruptcy. Similarly,
during the 1979 crisis, disrupted oil markets globally suffered from shortages and resulted in a
bevy of regulatory shifts instituted by state and federal policy to control and ration gasoline.
Citizens in the states of California, Texas, and New York amongst others were only permitted to
purchase gasoline on certain days corresponding to the digits of their license plates (Lifset,
2014).

C) During the crises, import shortages affected the supply and demand of energy which
consequently influenced prices as any good or service will when in limited supply and high
demand, or high supply and low demand. For example, when OPEC embargoed exports to the
west, supply drastically decreased to a limited amount within America. Lacking a balanced
energy dependency, the cost of oil drastically increased.

D) The Canadian federal government was affected by the oil embargo of OPEC as a Western
ally. The economy was affected since the government imported oil from foreign markets and
resold it to the United States on a fixed cost. When prices increased, the country suffered from
the repercussions of being in this position as both a consumer and secondary supplier (Runyon &
Rocks, 1973). Following the crisis, the government worked with individual provinces that were
domestic producers of oil to increase Canadian oil prices. Oil sands in Canada are the largest
deposits on the planet and the country has significant reserves, so the first course of action was
setting federal price limits on oil for consumers. The government began to invest in the
production of oil from Canadian oil sands, namely in Alberta and Ontario, privatizing the sector
and then instituting Petro-Canada to nationalize oil and developed a local oil industry by
investing in technology and coordinating with individual provinces to regulate oil prices
(Noakes, 2020). Meanwhile in the United States, the embargo changed the norms of American
household energy demand and usage. Presidents Nixon and Ford urged Americans to begin
conserving energy by reducing usage of heating and air conditioning, using public transportation,
and implementing a national speed limit of 55 mph. Furthermore, fuel efficiency standards were
introduced for automobiles and auto manufacturers. Long term policy hoped to achieve energy
independence through technological advancements and investments in fracking as well as shifts
to renewable energy (Mayer, 1978). Later, President Jimmy Carter established the Department of
Energy allowing for a national framework to oversee the energy sector of the United States.
Therefore, in both cases the 1973 energy crisis resulted in policy shifts and directives that shaped
the future of affected countries. Following the 1979 energy crisis, inflation in the United States
was rising steadily, predating the events of 1979. By the end of the year inflation was at a
staggering 9% and the federal reserve began aggressive monetary policy to balance the economy.
Jimmy Carter implemented fiscal policy aimed at promoting conservation of energy and
reducing dependency on oil imports. The Windfall Profit Tax of 1980 imposed tariffs on high
revenue oil companies which benefited from high oil prices and the tax revenue was used to fund
energy conservation research projects and programs to develop the energy sector. Carters’
administration also implemented the National Energy Act which introduced policy changes
surrounding conservation, taxes, and laws that promoted energy efficiency and lowering demand
for oil by expanding into alternative fuel sources to diversify America's energy portfolio
(Wellum, 2023). Meanwhile, the United Kingdom rebuilt their energy policy framework to
address challenges of energy security because of the geopolitical tensions causing the global oil
disruption. Prime Minister Thatcher introduced policies and strategies aimed at energy
conservation which included public awareness campaigns and encouraging households and
corporations to reduce their energy consumption. Government policy focused on diversifying the
domestic energy portfolio and reducing the dependency on foreign oil imports by investing in
domestic resources such as the development of alternative energy in the form of nuclear power,
coal, and renewables (Houthnkker, 2014). One such effort was by providing incentives to
domestic companies in the extraction of oil and gas from the North Sea, boosting the UK’s
energy supply and stabilizing the economy by domesticating energy dependance (Hiepel, 2014).

Question 7:
The take or pay contract in Israel is a common feature in long term natural gas agreements that is
designed to provide security to both the suppliers and the consumers by guaranteeing them a
minimum purchase quantity that should stabilize the revenues and guarantee minimum order
quantities over time. In this way the logistics of the consumer and the producer can be planned
ahead of time. In Israel, this model was implemented to support the country’s energy needs and
to ensure a consistent stream of natural gas.

For context, the Take or Pay contract was implemented in the strategy to secure the natural gas
supplies from the Tamar and Leviathan fields. The contracts provided the producers with
financial security and encouraged them to explore and invest in the development of these fields.
The revenue stream provided them with further incentive to explore and produce natural gas
from these fields.

The specifics of the model for this agreement are that under the Take or Pay agreements, Israel’s
power companies and industrial consumers are required to purchase a specific amount of natural
gas from the Leviathan and Tamar fields every year. Even if they are not able to or need that
amount of energy, they are still required to pay the fields the agreed upon amount so that they are
able to have a predictable stream of income which will allow them to plan their logistics ahead of
time.

The benefits of the Take or Pay model are that there is a secure supply of natural gas for the
consumers and power stations in Israel. This reduces the risk of energy shortage throughout the
year. Another benefit of this contract model is the investment incentives. The consistent stream
of income creates a stream of income that ensures investment and incentivises development in
infrastructure and exploration projects.
The impact on the consumers of Israel is that the Take of Pay model may increase the costs of
the energy in a country especially if the country under-consumes energy because the consumers
and the power companies are required to pay a certain amount even if that amount is not actually
used by them. This may sound like a negative but the positives of this is that this method often
allows for stability in pricing and allows consumers to plan and budget their energy needs ahead
of time without price uncertainty.

The Israeli consumers benefit from Take or Pay contracts from the reduced price volatility and
consistent secure energy supply. These are critical factors both for commercial and residential
consumers of energy. The dependability of the energy source provides a base for market growth
and increases trust in the market. The main drawbacks of this model is that consumers now have
to pay high prices even at a time of lower energy demand. The industries that are sensitive to
these market changes may have a hard time paying during these tough times.

Question 9
Future GHG emissions are expected to change in India and Austria. Using the metrics of total
GHG emissions C02e, GHG emissions per capita, and renewable energy share, we will predict
what changes are expected from 2035 until 2050. In India, total GHG emissions are projected to
steadily rise and increase due to economic growth, urbanization, and industrial factors. It is
projected that by 2030 India will produce emissions of 3.8-3.9 gigatons, doubling their emissions
from 2015 and meeting policy goals suggesting that they could set stronger targets (Dubash &
Bhardwaj, 2018). Beyond 2030, India is committed to lowering GHG emissions significantly
into 2050 with goals of 1GtC02e. However, with business as usual the projected increase looks
like 7.4 GtC02e (Tiseo, 2024). Currently India’s per capita emissions are less than half of the
global average at 2.29 tons compared to 6.3 tons. The reason for low per capita GHG emissions
is due to India’s development as a nation. India has a large population of over 1 billion people
with a large portion of the population lacking access to energy resources and living in rural areas
resulting in lower consumption of goods, private vehicles, and appliances. In addition,
traditionally Indians preserve nature, don’t eat meat, and live simple lives without contributing to
pollution (Pandey, 2024). However, as India continues to industrialize, urbanization coupled with
development over time will likely contribute to better standard of living increasing each
individual person's GHG emissions. The projected outlook in this regard is a rise in GHG
emissions per capita as India advances in becoming a developed nation. Finally, as energy
demand is guaranteed to increase, India has committed to grow the share of renewable energy to
meet climate mitigation goals (Bakir et al., 2022). Under the government’s current action plan,
India is set to meet renewable energy requirements for 2030, achieving 40% of energy
production solely from renewables (PIB Delhi, 2023). In the long run, India has positioned
current policies to reach a goal of providing almost half of the country’s energy needs from
renewable nuclear and hydro power sources (Pandey, 2024).
In Austria, GHG emissions are projected to significantly decrease by 2035 because of stringent
policy aimed at the enhancement of energy efficiency and the increase of renewable energy share
in the energy mix. Austria’s GHG emissions are expected to decrease by 24% by 2040, and
projections for 2050 see Austria committing to carbon neutrality by utilizing nuclear power
generation. The GHG per capita is also following a decreasing trend as the population is
becoming more aware of energy efficiency along with improvements to services and
infrastructure from government plans to invest in improving buildings energy efficiency, relying
on renewable energy, and improving infrastructure like transportation and sustainable
development. The rate of decrease into 2050 depends on the success of government policies, but
since Austria has begun to invest in renewables and plans to produce 100% of national electricity
from renewable sources by 2030 these goals show promise in decreasing GHG per capita and
increasing renewable share in the energy mix. Renewable share is projected to increase further
into 2050 (Appendix A) with Austria’s goals to invest in technological enhancements for storage,
achieving neutrality, and enhance renewable energy infrastructure nationally (Anderl et al.,
2021).