Good morning. Thank you for the opportunity to testify before this committee.
I'm a senior fellow at the Manhattan Institute, where I focus on science, technology and energy issues. I am also a faculty fellow at the McCormick School of Engineering at Northwestern University in Chicago. I'm a physics graduate, more than a few years ago, of Queen's University in Kingston, Ontario. For the record, I am also a strategic partner in a venture fund focused on energy tech software.
As this committee knows, the world is now recovering from the ravages of the global COVID-19 pandemic. That recovery inevitably means that as activities return to normal, energy use is rising again. As a baseline, it's relevant to note that over 80% of the world's energy comes from hydrocarbons—that's oil, gas and coal—and internal combustion engines account for 99% of all global transportation miles. Meanwhile, the wind and solar machines, the two sources of energy favoured in many policy proposals, supply less than 3% of global energy. As of now, electric cars supply under 0.5% of global road miles. Given the scale of global economies, changing the status quo presents some of the most daunting economic, environmental and geopolitical challenges our world has ever faced.
Permit me to note three basic realities, each with implications for considering technologies and policies for altering how the world, and Canada, obtains its energy. These are realities that help explain why global carbon dioxide emissions continued to increase prior to the pandemic lockdowns, despite massive investments in non-hydrocarbon energy production in both Europe and North America.
First, it's indisputable, and it's a good thing, that the world will use more wind and solar machines and more electric cars in the future. The reason for that, aside from policies that encourage all three, is anchored in the fact that those technologies are far better now than they were a decade or two ago. Given the magnitude of future global energy needs, more options are always better.
Second, it should be equally obvious that all energy machines are, necessarily, built from materials that must be first extracted from the earth. Replacing hydrocarbons with wind, solar and battery-powered machines constitutes a major shift in both the nature and the quantities of energy materials needed for society. It's a switch from using mainly liquids and gases to using mainly solids. It's a switch that, on average, results in a tenfold increase in the physical quantities of materials mined, extracted and processed per unit of energy service delivered to society.
The third point is that Canada and the United States combined are today, and will be for the foreseeable future, net importers of wind, solar and battery machines, or the key components for making them, as well as for most of the critical energy minerals that are used in the key components. As the International Energy Agency has recently noted, the realities of the scale of that mean that even the most aggressive forecasts for alternative energy sources see the world continuing for many decades to require roughly as much hydrocarbon energy as is used today.
These kinds of realities have implications in the accounting for environmental impacts and for carbon dioxide emissions. They also have economic, geopolitical and even human rights implications. While the United States and Canada in particular are essentially self-sufficient today in net hydrocarbon use, both countries are net importers of alternative energy materials and machines. This means that replacing hydrocarbons, which supply over 80% of North America's energy, with so-called green energy machines would replace a large share of the domestic GDP of both countries with imports.
Given the world as it is, and not as we'd wish it, increasing the use of green energy machines results in a de facto export of carbon dioxide emissions and an increase and a change in the character of environmental impacts. That's because mining and processing of energy minerals, and the fabrication of energy machines, in particular batteries, is inherently energy-intensive. Most of that energy use takes place offshore. Calculating the magnitude of that offshoring is complex.
Some analyses, including that of the International Energy Agency only last week, have looked at the impact of processing battery materials or fabricating battery components in China, where a major share—in fact, the dominant share—of such industries resides. With China's 60% coal-fired grid, this leads to even higher carbon dioxide emissions elsewhere and even greater supply chain environmental impacts .
This points to the need for a realistic supply chain analysis, something largely lacking in the accounting of Canada and the United States, and it means that we should also look at expanding our respective domestic mining and mineral processing industries—something that China has been focused on, by the way, for years.
Thank you very much.