Peak Oil as a stimulus for a green economy transition in South Africa: Alternative liquid fuel and transport options

Abstract

While the arguments in favour of a green economy often rest on the need to reduce environmental damage, mitigate climate change and create environmentally friendly jobs, this article argues that the inevitable and possibly imminent peak and decline in world oil production provides another strong rationale for green economy policies and investments in South Africa. The South African economy has a high degree of reliance on imported petroleum fuels and evidence suggests that oil price and supply shocks – resulting from diminishing world oil exports and a decline in the energy return on investment for oil globally – are likely to have a debilitating socioeconomic impact under business-as-usual policies and behaviour patterns. Two broad strategies for mitigating the impact of increasing world oil scarcity and oil price shocks are considered. The first evaluates the prospects for developing indigenous sources of liquid fuels, including coal-to-liquids, gas-to-liquids and biofuels, and finds that there are significant resource and environmental risks associated with these options. The second strategy involves short-term measures to reduce demand for liquid transport fuels together with a long-term shift toward electrified mass transport, supported by accelerated investments in renewable energy. The latter strategy is argued to be compatible with and necessary for a societal transition towards a green economy.

Keywords:

• Energy security
• green economy transition
• liquid fuels
• oil price shocks
• peak oil
• sustainable transport