This article discusses the primary energy source of the third industrial revolution, just as the change in energy sources played a central role in the previous industrial revolution. While Professor Jeremy Rifkin argues for a decentralized energy system based on renewables, the author believes that shale gas is a better alternative due to its efficiency and economic benefits, and that a decentralized system based on shale gas will drive the new industrial revolution.
The time for revolution has arrived. As economic conditions worsen in the wake of the financial crisis in the U.S. and Europe, the prices of coal and oil are on a steep upward trajectory that defies logic. Change is needed. To anticipate what changes are needed, it’s worth looking back at similar experiences in the past.
In the late 18th century, the rise of coal led to the First Industrial Revolution, driven by the steam engine that powered it. Railroads were needed to move the steam engines, and railroads needed iron. Building railroads required vast amounts of capital, far more than textile mills, ships, or canals, so large, centralized railroad companies arose. A century later, in the late 19th century, the discovery of oil led to the Second Industrial Revolution, with the development of the oil-powered automobile, chemical, and electrical industries. Again, oil was the primary source of power, requiring large amounts of capital and favoring vertical economies of scale. The best values of the time were centralized structures, efficiency, and hard work.
From the first and second industrial revolutions, we can infer that a change in energy sources triggered the industrial revolution. But what kind of energy source will the Third Industrial Revolution need?
Jeremy Rifkin, the author of this book, sees renewable energy as the main source of energy for the third industrial revolution. This energy is distributed renewable energy (solar, wind, hydro, geothermal, biomass, tidal, etc.), not centralized like coal or oil, and it can be found everywhere. Because much of it is free – the sun rises every day, the wind blows often, and the heat stays in the ground – the author believes that the Third Industrial Revolution will be organized around renewable energy. Since renewable energy is inherently distributed, it does not fit into the centralized hierarchy of the past and requires collaborative mechanisms. The author speculates that the combination of internet communications technology and renewable energy will trigger the third industrial revolution.
In the 21st century, hundreds of millions of people will be generating green energy directly in their homes, workplaces, and factories and sharing it with each other through an intelligent, decentralized power network, or “intergrid. The authors identify five key elements of the third industrial revolution
1. transition to renewable energy
2. transform buildings on every continent into mini-power plants capable of generating renewable energy on-site.
3. Deploy hydrogen storage and other storage technologies throughout all buildings and infrastructure to conserve energy that is generated irregularly.
4. leverage internet technology to transform the power grid on every continent into an energy-sharing intergrid that works on the same principles as the internet.
5. replace transportation with plugged-in and fuel cell vehicles, and enable the buying and selling of electricity on a continent-wide, bi-directional smart power grid.
In other words, the argument is that a new energy regime that includes power generation in buildings, storage of some energy in the form of hydrogen, distribution via a smart intergrid, and connected, zero-emission transportation will usher in the third industrial revolution.
However, I believe that shale gas, not renewable energy, will be the main energy source for the third industrial revolution. Shale gas is gas that is trapped in shale formations, which are rock formations where organic matter is converted into oil, and is distributed widely without being concentrated in one place.
First, when the author wrote this book, the European financial crisis had not yet occurred, so he overlooked our current attitudes towards renewables (especially in Europe) and the importance of shale gas, and thus made an incorrect prediction for the future. The authors saw countries with decentralized systems, such as Spain and Italy, as exemplary chapters of the Third Industrial Revolution, rather than countries with centralized structures, such as the United States, the United Kingdom, and Germany. However, Spain and Italy are currently suffering from fiscal crises.
Second, even if renewable energy is inexhaustible and environmentally friendly, it cannot keep up with conventional fuels in terms of energy efficiency and density, and most of them have irregularities. The energy efficiency of shale gas is higher than that of solar (15% energy efficiency under optimal conditions) and wind (25%), the two most common renewables.
Third, shale gas reserves are substantial. The world’s proven shale gas reserves are enough for the next 60 years based on 2011 global natural gas consumption. There is no reason to use renewables when shale gas is more efficient, and shale gas can be generated using existing gas power plants, requiring less capital expenditure. On the other hand, renewable energy generation requires everything from siting to installation, which can be quite expensive.
For these reasons, I believe shale gas is the next generation of energy that will replace oil, which is at risk of depletion, nuclear power plants, which are unsafe, and renewables, which are not as energy efficient as they should be. The third industrial revolution should be decentralized, not centralized, with shale gas as the main energy source.
While the first industrial revolution developed dense urban centers, apartment buildings, townhouses, skyscrapers, and multi-story factories, and the second industrial revolution created flat suburban neighborhoods and industrial parks, the third industrial revolution will turn every existing building into a dual-purpose space that serves as both a home and a mini-power plant. For example, it will be possible to build a small power plant alongside an apartment building. Small gas turbines that can be controlled to produce only the amount needed could be a promising industry, as well as the construction of LNG transportation ships or LNG bases. This is because shale gas is bulky and difficult to transport. For the shale gas-driven Third Industrial Revolution to happen, we need to be able to convert gas into energy, which means advances in gas-to-liquid (GTL) technology, which liquefies gas into liquid.
The third industrial revolution is already here. I believe, as Professor Jeremy Rifkin argues, that we will see an era of energy supply and demand through a decentralized grid. However, I believe it will be driven by shale gas, not renewables. Korea should invest in shale gas, which the International Energy Agency (IEA) has called an “energy revolution,” and lead the tertiary industry.
