The International Energy Agency will next week (29 May) launch an important report on the "golden rules" for governments and industry if they are to overcome serious risks and concerns (social and environmental) about the Golden Age of Gas.
There will be a special presentation of this report by Fatih Birol, IEA’s chief economist, in the European Parliament in Brussels on Wednesday, May 30, at 09h30.
Registration for this event in the European Parliament is possible via firstname.lastname@example.org before 29th of May. Mr Sonik, a Polish Member of the European Parliament recently wrote a heavily criticised report in favour of large-scale shale gas extraction in Europe.
On the same day (30 May), I will have the pleasure to moderate a debate on the same subject of shale gas in Europe during the annual conference of ASPO, the Association for the Study of Peak Oil and Gas in Vienna. One of the world’s most renowned critics and expert on shale gas in the USA, Arthur Berman, will be the top speaker in this debate.
Read one of Arthur Berman’s latest papers on this issue: After The Gold Rush: A Perspective on Future U.S. Natural Gas Supply and Price (Febr. 2012)
"When the new Italian Prime Minister, Mr. Mario Monti, gave his acceptance speech to the Italian Senate before Christmas, he used the word "growth" 28 times and the word "energy" – well, zero times. Why would this supposed technocrat neglect even to mention the biophysical basis of the world’s economy? Energy, after all, is at the heart of industrial growth society: industrial production, our cities, our transport systems, our buildings and infrastructure, food and water flows, the internet – they all critically depend on oil and gas." (Source: Energy Bulletin)
Brilliant analysis of the energy myopia of our growth theocrats and the implications of energy scarcity on the future of cities. Also includes some serious inconvenient challenges for the theocrats of renewable energy.
A few more interesting quotes from this must-read article:
“Mr Monti and Mr Obama are better described as theocrats, than technocrats. Their principal job is to keep us in thrall to a myth: an economy that expands to infinity in a finite world.”
“Mainstream renewable energy strategies suffer from an existential flaw. They take rising global energy ‘needs’ as a given; calculate the quantity of renewable energy sources needed to meet them; and then hand the job of implementation over to governments and the market.”
“Expensive and heavy energy arrays are to be dumped into wilderness areas – such as arid lands in Spain and France, or the deserts of North Africa – on the false assumption that these lands are ‘empty’ or ‘useless’”
“Resource efficiency is not a lifestyle choice. We’ve splurged on energy for 200 years because we could. The growth-at-all-costs economy grew because it could. We drove two ton trucks to collect a pizza because we could.”
“Rather than dream of a global switch to renewables that cannot and will not happen, the wiser course is to focus our creative efforts on low-energy replacements for today’s gas-guzzling support systems. Our focus should be services and infrastructures that require five per cent of the energy throughputs that we are accustomed to now. That’s the energy regime we’re likely to end up with, so why not work on that basis from now on?”
The UK’s Independent starts off today with a shocker (“Warning: Oil supplies are running out fast”). The article is based on a new interview with the International Energy Agency’s Fatih Birol. The IEA, once the spin doctor of the oil industry, has become quite courageous in the last few years under the leadership of Birol. A few interesting quotes from the article:
- “the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.”
- “Even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030, Dr Birol said.”
Now it’s time to start educating political and business leaders what the implications will be of this “energy descent”.
- On the Open Democracy website, Paul Rogers does a good evaluation of some of the studies undertaken by the US military into the security threats of climate change. His verdict is that these studies are excellent at analysing the climate challenge but their solutions are too narrow and very much related to national interests. But he sees some interesting developments: “Some of their analysis of world trends could appear almost word-for-word in a Greenpeace or Friends of the Earth tract; the problem is that they are rarely able to escape from a narrow perspective on national security which sees it almost entirely in terms of the defence of their realm, rather than the common security of the wider world. If even a few of these analysts could rise above that and take a larger – and more truly realistic – view, the service they could do to the wider community could be hugely significant.”
- McKinsey continues to beat the drum of energy efficiency with a new report about the opportunities in this area in the US. The report “Unlocking energy efficiency in the U.S. Economy” shows potential huge profits of 130 billion dollars a year. Read on this report the coverage by GreenBiz. Similar studies have come to the same conclusions for the EU. I wonder if the pay-off is really so big, why it is not happening then? Maybe the answer is in a new book just published by Earthscan “The myth of resource efficiency. The Jevons Paradox” (I will review this book – which I am reading now – next month).
- The French debate on the carbon tax becomes red hot. French finance minister Christine Lagarde thinks the Rocard proposal of 32 euro per tonne of CO2 is “too expensive” but in “Le Monde” economy professor Thomas Pikkety is convinced this price is not high enough to change citizens’ behaviour : “Je ne suis pas spécialiste de ces sujets, mais j’ai du mal à croire qu’une taxe additionnelle de 7 centimes par litre va véritablement changer les comportements. Quant à l’augmentation prévue d’ici 2030, avec un prix de la tonne de C02 passant de 32 à 100 euros, elle correspond, si je comprends bien, à une taxe additionnelle d’un peu plus de 20 centimes par litre d’essence en 2030. Je peux me tromper, mais il ne me semble pas qu’on va changer de civilisation avec un tel instrument. La hausse prévue n’est d’ailleurs sans doute pas très éloignée de celle appliquée ces dernières décennies. La montagne a accouché d’une souris… et en plus, d’une souris qui fait peur !”. Love that image: politicians afraid of the mice they have created
There is a new general consensus that the current economic collapse can only be solved by massive injections of public money into the economy. Policymakers have rediscovered Keynes and calls for a “New Deal” can be heard from Washington to Beijing. But neither blunt Keynesian stimuli nor big infrastructure programmes let alone dramatic sector bailouts will solve this crisis if there is not recognition of the fundamental links between the “economic crisis of 2009″ and the new energy and resource scarcity of the post-oil era.
One of the best analyses of this predicament has just been published by the Post Carbon Institute of Richard Heinberg. The 24-pages plan for the Obama administration (“The Real New Deal. Energy Scarcity and the Path to Energy, Economic, and Environmental Recovery”) outlines the priorities of a future energy policy confronted with climate change and the accelerating energy descent.
The document’s main starting point is that the “financial crisis must be addressed by pursuing an energy transition“. But this transition, says the study, “must not be limited to building wind turbines and solar panels. It must include the thorough redesign of our economic and societal infrastructure, which today is utterly dependent on cheap fossil fuels. It must address not only our transportation system and electricity grid, but also our food system and building stock.”
The “Real New Deal” offers five components of the solution:
- a “massive and immediate shift to renewable energy”
- electrification of the transportation system
- rebuilding the electricity grid
- de-carbonisation and re-localisation of food production
- retrofitting the building stock for energy efficiency.
Not only will global economic depression and rising unemployment plague 2009, but intensifying geo-political tensions will lead to new trade protectionism and (very likely) new wars (Middle East, Pakistan-India, US-Iran?). Collapse will be on everyone’s lips as, at the same time, the long-term threats of resource scarcity and global warming intensify. Happy New Year!
It will be difficult to do as well as with my predictions for the previous year (“2008: Annus Horibilis?”) but here are my gloomy forecasts for 2009. (BTW: I got most of my inspiration for this post from James Howard Kunstler’s excellent “Forecast for 2009“)
- “It’s the economy AND the ecology, stupid“:
- The economic storm will hit even harder than it did last year and the specter of unemployment will raise memories of the seventies. More money will be pumped into the economy but this will only postpone the necessary start of the transition to a more sustainable society. The new Keynesian revival risks to be no more than an effort to “rescue the Status Quo” (James Howard Kunstler) and will lead to new inflation pressures by end of 2009. What is really needed is not even a “Green New Deal” but a complete re-think and re-engineering of our current economic goals and instruments. A good starting point for EU policy makers would be to read Herman Daly’s “Big Idea: Steady-State Economy” in the AdBusters online journal.
- “Maybe we can or can’t we?”
- Climate change will be the biggest game in diplomat town but very little will be gained at the end of the ride. Copenhagen will unfortunately find a weak compromise which will give political “leaders” an excuse for continuing business as usual. Like in 2008, we will get more insight into the energy descent but our societies will keep closing their eyes. That said, defence and intelligence circles will start sending out more worrying reports, but can we handle the truth? The media will start publishing more climate-sceptic stories again.
- Oil prices will remain unpredictably volatile. Contrary to what some critics are saying this is exactly what peak oil analysts have predicted. Nevertheless I think there is a high probability of a price range between 40 and 60 dollars for the first half of the year unless the Middle East blows up or new terrorist attacks hit. In that case, oil prices will rise to 150 dollars again. More important than the oil price is the real demand-supply situation (the oil price volatility is one of the best examples that the market is NOT the best instrument to allocate resources). The current demand destruction (as a result of the economic downturn) is already leading to supply destruction as investments in new developments are no longer profitable. In the long run, this will only speed up our future energy descent.
- “The World is NOT flat”
- The economic downturn will lead to growing protectionism (read “Welcome to hell of protectionism in 2009“). Here I agree again with Kunstler when he writes: “The over-arching geopolitical theme of 2009 will be the end of robust globalism“.
- The economic crisis will intensify nationalistic reflexes and send the European project in a downward spin. The European Parliament elections in June will demonstrate (once more) the utter disconnect between EU elites and the citizens. Mr Barroso will stay on as Commission President but the position of a vice-president for communication will be scrapped. Despite all climate change rhetoric, the neo-liberal “competitiveness first” wind will prevail in the new Commission’s priority plans
- The Irish will say “NO” a second time in the new referendum on the Constitution. As usual the crisis will not be seen as an opportunity to reboot the Union. Ireland might have to vote a third time in 2010
- The Czech EU Presidency will stumble over its own contradictions and the Swedish one (which will be more worried about sustainability issues) comes to early in the new cycle to have a real influence on the EU’s agenda for the next five years.
PS: another gloomy forecast for the financial world in 2009 from the peak oil community was published today on the Oil Drum blog: “Financial Forecast for 2009, Considering Resource Limitations“.
The grandstanding of EU leaders on the adoption of the climate and energy package cannot hide that Europe’s and the world’s political elites have succumbed to short-term economic fears and have postponed the necessary start of the transition to a new energy regime. Let’s hope and pray the climate/energy leadership role will now be taken up by the incoming American administration.
The deal French President Sarkozy clinched on the climate/energy package confirms once more that our politicians excel at setting apparently ambitious but in reality hollow rhetorical targets and then fail miserably when it comes to working out the real policy measures to reach these targets. By introducing exemptions from the auctioning system for carbon allowances and increasing the “hot air” carbon offsets that can be bought outside of the EU, the package has in reality become a Swiss cheese full of holes. Who honestly believes that with this dilution of the package, the 20-20-20 targets will still be reachable? I would not have minded the early Christmas presents to the industry if the EU leaders would have said at the same time where and how they were going to compensate to deliver the “triple 20″ goods by 2020. But then again, who of the leaders present at the European Council will still be around in the next ten years. “Après moi, le déluge”?
That said, I do not doubt European industry feels “encouraged” by the EU’s climate deal (see EurActiv) but, in the long run, this might well become a Pyrrhic victory if Europe loses its first-mover advantage to the US in the coming years. Or do I have to read the EU industry’s getting cold foot over the climate policies as a statement to President Obama? “Yes you can, but we cannot”? Let’s look at the impact of this on our industry’s competitiveness in ten years.
The outcome of the Poznan COP-14 summit does not raise many hopes for an international agreement in Copenhagen next year either. Of course, we now have a work plan for the negotiations but the conference failed to bring developed and developing countries closer together as there were no agreements on the adaptation fund and the necessary measures to counter deforestation (see Washington Post). For a full analysis of the Poznan summit, read the IISD’s COP-14 final report.
All this short-sightedness and political backtracking indicates that our so-called world leaders have yet to grasp the full urgency and seriousness of the energy challenge we are facing. This is all the more dramatic as the time we have to catapult ourselves on a path to a sustainable future is becoming increasingly short. Even with oil prices as low as they are now, the International Energy Agency’s recent World Energy Outlook 2008 has provided all the worrying facts which should ring policy-makers’ alarm bells over the climate/energy crisis as much as over the current economic turmoil. With decline rates of over 6.7%, the mega-oil fields which are the life-blood of our economies are getting closer to peak production every day. Even IEA’s Fatih Birol now predicts peak oil for 2020 (which knowing him is probably a bit diplomatic for saying “it is already here”) in an interview with Guardian journalist and climate activist George Monbiot. And the World Energy Outlook’s predictions on global warming are as dire as if they come with a potential global temperature increase of up to 6 degrees under the IEA’s Reference Scenario.
So is postponing the low-carbon energy revolution an option? Not really but then again, as Nicholas Stern said in Poznan: “The human race has an incredibly well developed capacity to screw up, and we may miss this chance”.
In the US, twenty-nine of the biggest NGOs published a 391-pages policy document with recommendations for the new Obama administration on how to start the transition to a green and clean economy.
The impressive report includes detailed proposals on how to endorse legislation to reduce greenhouse gas emissions by 35% before 2020 and and 80% cut compared to 1990 by 2050.
The Gristmill blog has a good summary of the main action points of the “Transition to Green” report. The Natural Resources Defence Council’s (NRDC – one of the organisations behind the report) blog explains the sense of urgency behind this unusual coalition and the policy document they agreed on.
I hope we can bring our own European social, development and environmental NGOs together around a similar policy recommendation report before next year’s European Parliament election. Anyone who wants to take the lead, let me know.
Next week’s COP-14 meeting in Poland is likely to go down in history as the top where the European Union’s self-proclaimed global leadership on climate and energy policy got sacrificed on the altar of economic growth fundamentalism.
With Poland and most of the new EU member states in opposition and their unholy alliance with Berlusconi’s “little Italy” and Merkel’s “Germany Inc”, it seems clear that the EU will have difficulties speaking with one voice during the Poznan meeting. Moreover, the latest French “compromise” on the climate-energy package is no more and no less than a wonderful Christmas bag of gifts for the European coal-power utilities and the energy-intensive sectors. In effect, it will definitively bury Europe’s “ambitious” climate plans.
And what are countries like China and India to think when even the rich industrial countries start backtracking on their grand promises for a post-carbon future now that the financial crisis (which was partially caused by our carbon addiction) has hijacked the short-term political agenda? At least the lame-duck Bush administration can be expected to stick to its traditional role in Poznan and Obama’s diplomatic delegation is likely to keep a low-profile as long as the President-elect is not fully in power.
So, will Poznan be a complete failure? Probably not, as the diplomatic circus has become very sophisticated at producing hollow rhetorical declarations where every country can find its little treat.
And exactly THAT is possibly the biggest danger. I would rather see a total failure of Poznan than a non-text which all government delegations will be able to spin as their victory.
Once the whole world will have seen that the EU (“the King”) is naked, it is time for a regime change. Let’s put our hopes for the post-carbon future in the Obama Presidency, although it may also take him a few years to push through his new climate policies. As for the EU, it will have proven that it has become part of the problem, not part of the solution.
For how long will the EU’s self-acclaimed “climate leadership” survive the Obama revolution? Could a “green” Obama administration pose a bigger challenge to the EU’s climate credentials than the temporary backlash of the financial crisis? Who will win the race for the new “eco-competitiveness”?
These questions are hard to answer for the moment but there are two trends which might tell us where the future of green policies is heading. On the one hand, there is the climate “counterrevolution” which we can now observe in the European Union against the Commission’s climate and energy package, led by the new EU member states (who never had a green revolution in the first place or strong environmental movements). On the other hand, the momentum for change in the US which could lead to a new “Green Deal” which would see the US take over the climate/energy leadership banner from the EU.
One example: one of the most interesting developments coming out of the Obama transition news in the US, is the likelihood of a new Energy Security Council or a Climate and Energy Council.
The EU commission officials who are these days starting to prepare the blueprint for the post-2009 EU commission should keep their eyes on these developments. The EU post-2009 could do with an integration of the three portfolios of energy-environment-economy (the 3Es). The Lisbon agenda should be shelved and replaced with a new project: to prepare Europe for the hard transition from a world without limits to the future resource-constrained one-Planet global economy. Yes, we can.