Presentation by Robert A. Hefner III, Founder, Owner and Managing Partner, The GHK Company

Geopolitics and the Age of Energy Gases

Robert Hefner stated that energy input to an economy was more fundamental than money and pointed out that current energy supply and demand levels would lead the world on an unsustainable path stricken with severe pollution and weather related catastrophes. For instance, China averaged one new coal plant per week and this trend, coupled with vehicle usage at current energy efficiency levels, would develop China and India “just in time for them to be plunged into environmental chaos”.

Hefner proceeded to quote Minister Mentor Lee Kuan Yew, who said that China needed “internal stability and external peace”. Energy use at status quo would not achieve this.

Hefner stressed that China, India and the rest of Asia have to be proactive and should not count on the West and the United States in particular for energy leadership. This was because the West had locked itself into 19th and 20th century energy technologies and had invested trillions of dollars in unamortized energy infrastructure. The speaker noted that 154 coal plants “lack long-term planning in a short-term democracy”. Asia must instead lead the West into the “Age of Energy Gases”.

Robert Hefner argued that world primary energy substitution in terms of three great waves, was based on the three forms of matter in the universe — solid, liquid and gas. The first wave was solid coal, the second liquid oil and the third, the “Age of Energy Gases” with gaseous fuels such as natural gas and hydrogen. Hydrogen, in particular, would be highly sustainable later in this century. While moving towards gases, he advised that governments must include the total costs of externalities. For example, in the case of coal, the World Bank estimated that 8 to 10 per cent of China's GDP would be lost due to the resultant pollution. Citing another example, Hefner compared centralized power plants and decentralized plants with high efficiency smart technologies.