More oil refineries coming right up. Will this stunt cleantech growth?
Saudi Arabia is preparing to add more refineries in the next few years. And they plan to begin refining more of their less desirable, more sulphurous, crude oil. Saudi is aiming for an 80% increase in refining capacity. Most refineries in the world can now only handle light crude. The largest fraction of the world's heavy crude deposits are in Canada, convenient for gas-guzzling Americans.
We've blogged in the past about some of the environmental problems raised by Canada's rush to cash in on its huge supply of tar sands in the far north. You may think the crucial vote in South Dakota last week was its Presidential primary. Wrong! One rural county voted to build America's first oil refinery since 1976. And it will convert Canada's heavy crude into marketable products.
Who cares? Anybody who is concerned over greenhouse gas emissions. A recent report from a non-profit in Washington DC charges that heavy crude refining produces THREE TIMES AS MUCH GREENHOUSE GAS EMISSION as light crude. The report goes on to conclude that US refineries will be falling all over themselves to convert to heavier crude as the Canadian supply is huge and the raw stuff cheaper than light crude. This will be a fun problem for the next US President. Stop the dirty oil from Canada and watch gasoline prices sky-rocket further, price controls on oil and watch the supply dwindle to a trickle and business scream for help, or let 'er roll and watch the emission levels increase.
Unless we enter a spell of cool, moderate temps, and China decides to stop growing its economy, the concern over energy prices and global warming will continue to heat up interest in cleantech. A few more oil refineries in a few more years are not going to suddenly give us $2 gasoline again. China is focusing more and more on cleantech for energy but there is so far to go. They are pushing for 15% renewables as their first national goal. It certainly means that cleantech ventures in China will get a piece of the global VC pie.
HOW MUCH CLEANTECH CASH IS NEEDED? $45T!?
The International Energy Agency is pushing for more cleantech, all over, all around. They recently estimated it would take $45 TRILLION worth of investment to begin to reverse the greenhouse gas emission problem by 2050. The way "Business Week" figures it: that's just over 1% annually of the global GDP. But it also runs counter to a lot of the big money and big power aligned on the planet: oil companies, Russia, OPEC, Iran, Saudi Arabia and the little Mideast states, Canada, coal companies, Australia, major auto manufacturers. On the other side you have Japan, Germany, China, India, Brazil, American consumers, VCs. This will be a major culture clash eclipsing older topics like gay marriage and gun control in America. And this one will begin to define new economic and political aliances across the earth. It could finally lead to a nasty break between neighbors: Canada, US and Mexico. Canada and Mexico are both major oil suppliers to the US.
Oil or not, will become the biggest cultural split on the planet and many Mideast countries with big oil supplies will find themselves often on the outs with historical forces they cannot control. Will Saudi's Wahhabis or Al Qaeda declare jihad on solar or nucelar power plants? Think of the great Hollywood thrillers this will engender.