Westward Group Energy Alternatives Paris - IEA chief: Only a decade left in US shale oil boom

A surge in US oil and natural gas production has lifted hopes about North American energy security, but that growth will plateau and will be difficult to replicate elsewhere, says Maria van der Hoeven, chief executive of the International Energy Agency, in an interview with the Monitor.

The United States is awash in hydrocarbons, the result of good geology, supportive prices, a favorable regulatory and investment climate, and technology innovation. But the US energy boom is temporary, and not easy to replicate in other parts of the world, Maria van der Hoeven, chief executive of the Paris-based International Energy Agency (IEA), says in a Feb. 22 interview with The Christian Science Monitor. Here are edited excerpts: 

Q: The energy industry has undergone a revolution in drilling techniques that has opened up vast new sources of so-called “tight oil” and “shale gas,” particularly in North America. Is the promise of this unconventional oil and gas overhyped?

A: The light tight oil revolution in the United States is changing the geographical map of oil trade.  But we also mentioned [in an IEA analysis] that this growth would not last – that it would plateau, and then flatten and go down. That means that from 2025 onward, it’s again Saudi Arabia and the Gulf states that will come back. Because of the changing trade map, this oil will almost completely go to Asia – China, India, Korea and Japan.

There are some people who really think they can replicate the United States shale gas boom. It’s not as easy as that. The land ownership and the resource ownership go together here in the United States – the only country where that is the case. It’s also about having the right gas industry, the right knowledge, the right infrastructure, the water, the human skills, the geological information, etc. And geology in this part of the world, especially where the shale gas boom is, is quite different from Ukraine or Poland. You can learn from it, but it’s not a copy-and-paste. The United Kingdom is changing its attitude to shale gas. China wants to develop its shale gas, but it’s in a very dry part of the country. South Africa is looking to its shale gas resources. The point is there’s a lot of shale gas in the world, but it’s not as easily accessible as it was in the United States.

Q: California is 36 months into its worst drought ever, threatening power outages in a state that gets 15 percent of its electricity from hydroelectric dams. How critical is water to the future of global energy security?

A: The use of water in producing energy is a big issue, but it is also the use of cooling water in power plants. Sometimes there is a lack of water, and hydroelectric dams are not producing as much power as they should. Sometimes there is too much water, and it threatens infrastructure. So we are working with a number of countries on the resilience of energy infrastructure to climate conditions including water – rising sea levels or storms or whatever it is. The other issue is water use in unconventional gas production [hydraulic fracturing]. We started a high level forum on unconventional gas last year, and water will be the focus of its second meeting this year in Calgary. The water-energy nexus is underestimated at this moment. The energy-food nexus is looked into from many sides, but I think the awareness for the water-energy nexus is growing and rightfully so. 

Q: Countries like Spain and Germany are second-guessing ambitious plans to transition to renewables as electricity costs rise. Is Europe backtracking on its clean-energy goals?

Europe paid the price of a decarbonization policy in a time frame that made costs quite high. This is something we have to realize. You have to choose your renewable energy sources based on the indigenous sources you have. Solar in the south of Europe – in Spain, in Portugal, in Italy and in Greece – is much more available than in the northern part of Europe, like the Netherlands or Germany. But wind is more available in the north than it is in the south. There is hydropower in the Alps, in the Pyrenees, and in the Scandinavian countries. It’s important to choose your technologies based on resources you have because otherwise your feed-in tariffs will be quite high. And when you have a feed-in tariff that is paid for by part of your population like in Germany, then you have to see to it that the burdens are divided among your population in a way that is acceptable. If you have a feed-in tariff, that’s fine, but put a cap on it. And see to it that when your technology costs come down your tariffs go down, because normally the tariffs are in place for quite some years and you pay a lot of money. At the same time, you need subsidies for renewables because we are not there yet, by far. You need subsidies not only for technologies that are economically more or less viable, but also for new technologies to come. Governments need to use their money to really push technology development and new types of renewable energy that are still in a lab stage or in a pilot phase.

Q: Parts of sub-Saharan Africa are coming into new sources of oil and gas. Can countries like Kenya and Uganda reap the benefits of their own resource wealth without falling victim to the “resource curse” that has hurt countries like Nigeria?

A: Without good governance you can’t guarantee that you are not going to end up in the same situation as Nigeria. And that’s a very difficult one. This is a very poor region of the world, and in our view it’s important that you are on good terms with local populations, host populations, and with host governments. And that means that you share benefits. That can be sharing benefits of fossil-fuel resources, and that can also mean, for instance, that you invest in renewable technology to bring electricity to the people. There are more solutions than one, but we will be working on this, and will come up with a number of proposals in our World Energy Outlook 2014.

Q: About 550 million people in Africa are without electricity. Can African nations leverage renewable energy – and “leapfrog” traditional electric grid development – to increase electricity access and spur growth?

A: They need to leapfrog in Africa and they can. Why should they make our mistakes? There are quite a lot of remote areas where you have to find mini-grid, off-grid solutions, and you need to have storage capacity. It’s not always big storage capacity, but the costs have to come down. So it’s absolutely vital that we look into a myriad of options. That involves solar, it involves geothermal, hydro, wind, and other renewable and fossil sources. Let’s not close our eyes and think that because we did a number of things in Europe that it must be done the same way in other countries. We’re not only talking about renewables in Africa – it’s a mixture. And of course some countries have their own indigenous resources. The point is how they can get the money out of it to pay for the solutions for electrification.

Westward Group Energy Alternatives Paris: Divided EU grapples with energy and climate goals

The EU’s energy and environment ministers will today (3 March) begin two days of talks under the shadow of divisions on greenhouse gas cuts, renewable energy targets and efficiency objectives.

While Germany says it will push for a binding energy savings goal and stronger renewable targets, Poland wants a commitment to an emission cut made optional and final decisions postponed until next year.

The Council discussions on energy plans for 2030 had been intended to pave the way to an agreement at an EU leaders’ summit on 20-21 March.

Draft guidelines for that meeting seen by EurActiv, call for a roadmap leading to “an early agreement on an ambitious EU position on emissions reductions up to 2030.”

This was framed in the context of a UN climate summit in September 2014, and the global climate change conference of parties (COP) due to take place in Paris in December 2015.

But Poland is blocking a consensus on a planned 40% cut in CO2 emissions, and says that a May 2013 agreement impels a final decision on objectives to be postponed until 2015.

Diplomatic sources have even floated a notion that the EU’s planned 40% cut in CO2 emissions could be made binding at the EU level alone, leaving member states free to pursue divergent energy policies. This is unlikely to gather a groundswell of support.

The UK, for example, supports an offer of a 50% reduction in Europe’s CO2 emissions being made at the Paris COP, albeit with the extra 10% cut being met with carbon offsets.

London also wants a decision on energy goals taken as quickly as possible, ideally before a June summit of EU leaders, and would prefer to see the EU’s Fuel Quality Directive which regulates transport energies ranging from biofuels to tar sands, amended rather than scrapped.

But it will be less sympathetic to proposals from Germany, which wants a planned 27% goal for renewable energies in the EU’s energy mix toted up to an “optimal” 30%, and made binding on member states.

Efficiency targets

More dramatically, Berlin will push for a binding energy efficiency target, in a challenge to the established orthodoxy in Brussels that such measures should wait until after a review of lagging progress towards the non-binding goal set for 2020.

“We feel that the best way to save energy is not to use it at all,” a diplomat told EurActiv. “There is also a strong field of green building industry that we need to support. That’s why we need an ambitious binding efficiency target to send the right signals to market and industry.”

This will be resolutely opposed by countries such as the UK, which argues that existing structural EU funds such as Horizon 2020 are sufficient to incentivise continent-wide energy savings.

Eastern European countries too may balk at the suggestion, seeing it as a cost to industry, rather than an opportunity. The gaze of one aspirant regional leader, Poland, remains squarely fixed on a horse trade over ‘burden-sharing’, or the degree of energy transition they must make relative to other EU states.

This will fit into debate on a looser governance structure for implementing energy and climate policy, with Warsaw arguing that its coal-dependent circumstances make clean energy a costly proposition.

Energy costs

Energy costs will also be discussed by the ministers, with a focus on the disconnect between wholesale and retail prices, as well as the disproportionate effect of taxes and levies.

“Prices, and especially costs, have continued to rise overall for both households and industry despite falling or stable consumption,” a draft Council communication seen by EurActiv says. “This rise in prices is driven mainly by increases in network costs and taxes/levies and wide differences between member states’ policies on these costs and levies.”

A convergence and fall in wholesale electricity prices “has not been transposed into a reduction of the retail prices,” the paper notes.

It proposes debate on subjects including:

·         Completion of the internal market by 2014

·         Further development of energy infrastructure

·         Cost-effective application of taxes and levies

·         Encouraging households and industry to improve their energy efficiency

·         Protecting vulnerable consumers though social policy measures

·         Diversifying energy supplies and routes

·         Ensuring consumer choice of the most advantageous energy supplier

Industrial competitiveness and a recent EU communication on industrial renaissance may well loom large, as Europe's energy intensive industries take an increasingly vocal line in the climate debate.

Industrial renaissance

Speaking in Brussels last week, Dr Brigitta Huckestein, a senior manager for the German chemicals giant BASF said that any EU 2030 climate and energy targets should “depend on what the public is willing to pay for climate action.”

“I do not believe that people are aware of this – that it will cost their money if politicians are going for such a high goal,” she told journalists.

In the end, a timeline to agreement may be the most that ministers can agree this week, leaving Europe’s clean energy industries kicking their heels.

A letter from the European Renewable Energy Council (EREC) to the EU’s heads of state, seen by EurActiv, notes that the EU’s own impact assessment accompanying the 2030 proposal indicated that a 30% renewables target for 2030 would create 568,000 more jobs and save €260 billion in fossil fuel imports.

“Agreeing on mutually reinforcing targets for GHG emissions reductions, energy efficiency and renewable will enable the development of a European climate-friendly energy mix through dedicated and reliable policies,” says the letter by Rainer Hinrichs-Rahlwes, EREC’s p

For more related topic, visit the following:

Westward Group Alternative
Westward Group Alternative – Facebook

Westward Group Alternative – Tumblr