Book Review – The Third Industrial Revolution (What will drive the third industrial revolution?)

Renewable energy has been touted as the main source of energy for the Third Industrial Revolution, but I believe shale gas is a more efficient and practical alternative.

 

The time for revolution has arrived. The economy is in trouble – the financial crisis in the US, the financial crisis in Europe – and the price of coal and oil is on a steep upward curve that seems to mock us. Change is needed. To anticipate what changes are needed, we need to look back at similar experiences in the past. In the late 18th century, the rise of coal led to the First Industrial Revolution, which was driven by coal-powered steam engines. Railroads were needed to move the steam engines, and railroads needed iron. Building railroads required capital that was unparalleled by other high-cost businesses (textile mills, ships, canals, etc.), leading to the creation of large, centralized railroad companies. A century later, in the late 19th century, the discovery of oil led to the Second Industrial Revolution, which saw the development of the oil-powered automobile industry, the chemical industry, and the electrical industry. Again, oil was the primary source of power, requiring large amounts of capital and favoring vertical economies of scale. The best values in this situation were centralized structure, efficiency, and hard work. Based on this comparison between the first and second industrial revolutions, we can infer that the industrial revolution was caused by a change in energy sources. But what kind of energy source will the Third Industrial Revolution need?
Jeremy Rifkin, author of the book, sees renewable energy as the main source of energy for the third industrial revolution. It’s distributed renewable energy (solar, wind, hydro, geothermal, biomass, tidal, etc.), not centralized like coal and oil, and it’s available everywhere. The author sees the Third Industrial Revolution as organized around renewable energy because it is mostly free: the sun rises every day, the wind blows often, and the heat is always in the ground. Because renewable energy is inherently decentralized, it does not fit into the centralized hierarchical control mechanisms of the past and requires a collaborative mechanism. It is speculated that the combination of internet communication technology and renewable energy will trigger the third industrial revolution. In the 21st century, hundreds of millions of people will generate green energy directly in their homes, workplaces, and factories and share it with each other in an intelligent, decentralized power network, or intergrid. The authors cite 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 authors argue that a new energy regime that includes power generation in buildings, storage of some energy in the form of hydrogen, distribution via smart intergrids, and plugged-in, zero-emission transportation will open the door to a third industrial revolution.
However, I believe that shale gas, not renewable energy, is the main energy source that will drive 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 not concentrated in one place, but is widely distributed in shale formations. First, the author wrote this book before the European financial crisis hit, so he overlooked our current attitudes toward renewable energy (especially in Europe) and the importance of shale gas, making his predictions for the future wrong. The authors saw countries with decentralized systems, such as Spain and Italy, as exemplary Third Industrial Revolution sites rather than countries with centralized structures, such as the U.S., U.K., and Germany, but the reality is that Spain and Italy are struggling with fiscal crises. Second, even if renewable energy is inexhaustible and environmentally friendly, it cannot match conventional fuels in terms of energy efficiency and density, and most of them have irregularities that can lead to interruptions. The energy efficiency of shale gas is higher than the 15% energy efficiency of solar and 25% energy efficiency of wind in the best conditions. 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 renewable energy when shale gas is more efficient. Furthermore, shale gas can be generated using existing gas power plants, which requires less capital expenditure. Renewable energy generation requires everything from siting to components for installation, which can be quite expensive.
For these reasons, I believe that shale gas, not renewable energy, is the next generation of energy that can replace oil, which is on the verge of depletion, nuclear power, which is unsafe, and renewable energy, which is not cost-effective. 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 residence and a mini-power plant. For example, when an apartment is built, a small power plant will be built alongside it. Small gas turbines that can control only the amount of gas needed will be a promising industry, as well as the construction of LNG carriers and LNG bases, since shale gas is also a gas and is difficult to transport due to its large volume. In order for the third industrial revolution, which is dominated by shale gas, to take place, gas needs to be converted into transportation energy, which means that gas-to-liquid (GTL) technology, which liquefies gas into liquid, needs to be developed.
The third industrial revolution is already here. I believe, as Professor Jeremy Rifkin argues, that the era of energy supply and demand through decentralized grids will come. However, I believe that the main driver of the decentralized grid will be shale gas, not renewable energy. The International Energy Agency (IEA, an energy collective security system under the Organization for Economic Cooperation and Development (OECD) established in 1974 by the world’s major oil-consuming countries) has called shale gas an energy revolution, and Korea should invest in it to lead the tertiary industry.