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February 2024 Exclusive Story

Report: Hydrocarbon Development Equals Improved Lives

In Bettering Human Lives, its 180-page environmental, social and governance report, Liberty Energy argues that energy policies should focus on expanding access to affordable, clean and reliable energy rather than concentrating on climate change.

“Human industrial and agricultural activity increases greenhouse gas concentrations and is contributing significantly to a warming trend that Earth has experienced over the past 150 years,” the report acknowledges. “Total warming across that period has been about 1.3 degrees C (2.3 degrees F).”

The change in climate has increased sea levels by melting ice caps, the report says, with mean global sea levels rising around nine inches in the 20th century and likely to add 15 more inches this century at current rates.

However, the report takes issue with the often-stated belief that climate change leads to extreme weather. “This claim is false,” it states. “Extensive reports from the Intergovernmental Panel on Climate Change actually show no increase in the frequency or intensity of hurricanes, tornadoes, floods or weather-related droughts.”

The report adds that annual deaths from extreme weather have fallen 90% during the past century even as the global population has quadrupled. It explains that “wealthier, more energized societies are much more resilient to extreme weather.”

Even so, the report describes climate change as a significant problem. It merely needs to be “considered in the context of the world’s other largest afflictions, such as malnutrition, endemic diseases and air pollution.”

The extent and human impact of those problems can remain largely hidden from people fortunate enough to live in energy-rich areas, the report reflects. “It is too easy to forget that only about one-eighth, the lucky 1 billion, of the world’s population lives in conditions like those enjoyed by most readers of this report,” it says. “Our energy policies, climate policies, conventional wisdom and the agendas of green activists typically focus on that top one-eighth—neglecting the realities of life for the remaining 85%.”

Even today, 2 billion people cook their daily meals and heat their homes with traditional fuels such as wood, dung, agricultural waste and charcoal, with much of the cooking taking place on open fires. “Burning these fuels results in low-temperature combustion and high levels of smoke and fine particulate matter, or PM 2.5, one of the world’s deadliest pollutants,” Liberty warns. “It is believed that about three million people die every year from the resulting indoor pollution. The World Health Organization also estimates that outdoor air pollution—primarily from PM 2.5 created by the same biomass fires in domestic homes—causes several million additional deaths.”

Relying on biomass for energy consigns people to drudgery, the report adds. It estimates that women in energy poverty spend more than an hour each day gathering wood for fuel to cook and an additional hour each day sourcing water.

Shale Plays’ Impact

Liquid petroleum gas, which is mostly propane, has provided many people with a cleaner way to cook, the report observes. “Since the advent of U.S. shale development in 2010, the WHO estimates that nearly 700 million people have moved away from dirty cooking and heating fuels such as biomass and charcoal—with Africa being the lone region where the use of dirty household fuels has increased,” Liberty writes. “Concurrently, annual deaths attributed to household air pollution decreased from 3.0 million to 2.3 million—great progress but still a horrific level of preventable deaths on par with the annual death toll due to COVID-19 since early 2020.”

The report attributes that progress largely to U.S. production making clean fuels affordable. “The United States is now, by far, the world’s largest exporter of LPG (mostly propane), and the source of virtually all growth in world LPG trade over the last decade,” Liberty relates. “This has decreased LPG prices while greatly increasing available supplies. If we continue this trend, clean-burning cooking fuel could be universally available within two decades.”

Cooking is only one of many ways in which access to efficient fuels makes a difference, the report observes. “The developed world takes electricity access for granted, but for a very large part of the world’s population, electricity is either an occasional luxury or altogether absent. The United Nations estimates that over 700 million people have zero access to electricity,” Liberty says.

Fortunately, this situation is improving. According to the report, “1 billion people received their first access to electricity in the last 20 years—the large majority from generators running on fossil fuels such as coal and gas, or (from) hydropower. The global electricity access rate has risen from about 83% in 2010 to 91% in 2020, but as the UN notes, the pace of progress has ‘slowed in recent years.’

“We also shouldn’t forget that there are grades of electrification,” the report continues. “While 91% may have access to electricity, 1 billion of those have access to electricity for only four hours per day. This is enough to power a light bulb or charge a cell phone, giving marginal improvements in quality of life, but nowhere near enough to drive a water pump or other machinery that could raise their productivity and income. Or power a refrigerator, one of the most important steps for health and hygiene after eliminating cooking with biomass.”

Expanding Access

The report emphasizes that hydrocarbons are the most affordable and practical way to expand energy access.

“Natural gas has been by far the fastest-growing source of global energy over the last 12 years, providing 38% of the incremental energy added over that period. Oil is the next fastest-growing source, providing 24% of the energy addition even with the abrupt COVID-induced temporary decline in oil demand. Coal comes in third, providing 14% of the growth in energy consumption,” Liberty relates.

“Today, hydrocarbons provide over 80% of global energy and also provided 76% of the growth in energy consumption—the energy addition—over the last 12 years,” the report continues. “This means that the hydrocarbon share of the total global energy pie has barely budged over the last 12 years.”

The report acknowledges that wind and solar energy are growing, but they still only contributed 9% and 7% of the energy added from 2010 to 2022. Hydropower supplied about 4% of the new energy, the report adds.

“The transition of the global energy system is a gradual process,” Liberty assesses. “It is difficult to replace fossil fuels that are more abundant and possess a higher thermodynamic quality and incredible flexibility in applications. Renewables lack those physical advantages and need the support of policies and subsidies to be cost competitive, and even then, only at low grid penetration rates.”

Through research and development, the report suggests that more practical alternatives to hydrocarbons, such as nuclear and geothermal, may gradually provide a larger portion of new energy. However, it cites the history of energy to caution against expecting alternatives to displace their predecessors.

“Despite the ubiquity of the term ‘energy transition’ in today’s energy discourse, so far, we have not seen any source of energy decline in absolute global consumption as it is replaced by something new,” the report clarifies. “Instead, we have simply been adding more sources as layers on top of existing sources to satisfy the insatiable demand for energy. A more honest discussion of the new energy sources being touted and heavily supported by mandates and subsidies would be called energy addition, not energy transition.”

Hydrocarbons’ Other Roles

In addition to providing energy, hydrocarbon development also supports several pillars of economic growth and prosperity. “Cement, steel and plastics are central to nearly everything we build in the modern world, and fertilizer is responsible for half of all food grown today. All these pillars critically depend on the combustion of fossil fuels for process heat in their manufacture, and three of the four use hydrocarbon molecules as critical raw materials,” the report says. “Materials such as aluminum, wood, gypsum drywall, metal alloys and silicon also rely on these essential products.”

Despite hydrocarbons’ vital role in modern society, many countries have adopted policies aimed at forcing a transition to renewable energy. According to Liberty, these policies “dismiss or distort the rational evaluation of the trade-offs between the benefits of hydrocarbon fuels in the short and medium term and the longer-term risks of climate change.”

These policies have stymied development of LNG infrastructure and created emerging shortages in oil production capacity that will contribute to higher prices, the report warns.

“The most dramatic and tragic impacts of high LNG prices are in lower-income countries, where unaffordable energy combines with soaring food prices to cause human hardship,” Liberty assesses. “Natural gas represents 80% or more of the cost to produce nitrogenous fertilizers (mostly synthetic ammonia), with nitrogen being the most important nutrient limiting agricultural productivity. The one-third of humanity living in energy poverty is now seeing much higher energy and food prices.

“This dire situation illustrates how costly errors in energy policy can be in human terms, and how critical it is that we get energy right,” Bettering Human Lives argues. “At the very least, we must prevent the globe’s most comfortable and wealthy regions from imposing anti-energy policies that harm or even kill the world’s least fortunate.”

Developed countries also suffer when policies restrict access to energy, Liberty says. Drawing on case studies from Germany, the United Kingdom and the European Union, the report finds that such policies increase families’ energy costs while encouraging energy-intensive manufacturing and the associated blue-collar jobs to move elsewhere.

In addition to providing those case studies, the full report has more details on the history of energy, climate change’s impacts, hydrocarbons’ environmental benefits and efforts to reduce energy’s environmental costs. To download the PDF version or request a print copy, visit Liberty Energy’s Bettering Human Lives page.

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