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Global Energy – Conflict and Synergy

A key politico-environmental debate in the global energy market is our reliance on fossil-fuels and the alternatives that may negate this dependence. This issue has been brought into sharp relief by the impending climate talks in Paris, however these aspects of the energy industry should not be viewed as binary opposites. Fossil fuel dependence is a complex issue framed by economic realities, environmental imperatives and technological advances.

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When is an agreement not an agreement? When one party omits to mention that vital part in subsequent reports.

That’s what’s happened following a recent meeting between the US and Saudi Arabia ahead of the climate change talks in Paris at the end of this month. Secretary of State John Kerry told the media both sides “pledged to work together” but King Salman’s officials made no such mention of a pledge.

Commentators question if this could be a validation of rumours that the kingdom is trying to derail the talks which are aimed at reaching a global agreement on climate change. Deutsche Welle claims, “Saudi Arabia is attempting to water down the treaty as much as possible,” claiming it is influencing other Arab states among others to resist regulations on fossil fuels that might arise from the meeting.

The fight back is not limited to the Persian Gulf. In Australia a recent vision articulated by the Chief Scientist-designate Alan Finkle of a “country, society, world where we don’t use any coal, oil, natural gas” led to notes of caution and realism sounded by the coal and gas industry.

Michael Roche, chief executive of the Queensland Resources Council, said Dr Finkel was surely aware of the time it would take to move to a fossil fuel-free future, and noted that parts of developing Asia would be reliant on coal for decades. “I am happy to have the discussion with the chief scientist about how his vision can be implemented but it is something that we don’t believe has too much credibility when we are thinking about developing Asia, India, Southeast Asia and the like. Part of his vision would be more wind turbines but turbines are made of steel, steel needs coking coal, solar cells use about 16 minerals and metals. People can quite happily ignore the realty that even renewables need mining. That’s a conversation we are happy to have with Alan Finkel over the coming weeks and months.”

There’s no doubt the renewable argument can provoke an intensely emotional debate but this is a fact that in Scotland they are trying to bypass. The Institution of Civil Engineers Scotland is calling for an expert-led national debate on its energy policy, ensuring that decisions are taken on the future of wind, solar, gas and nuclear future are made on sound independent advice.

Its chair, Professor Gary Pender, warned unless a rational debate is held the country could “transition from being a net exporter to being a net importer of electricity.” He said, “Energy policy is hugely politically controversial, with wind power, nuclear power and onshore gas extraction provoking particularly emotional and politically-motivated responses. We need to move beyond this, at times, irrational and ill-informed discourse about all these forms of energy generation and conduct a thorough, expert-informed assessment of the right approach for Scotland. Decisions must be made on evidence and resilience, not on emotion and politics.”

But it’s hard to remain detached when people in the industry passionately believe in the good of fossil fuels. Take the recent article in The Financial Times by Lambert Energy Advisory founder Philip Lambert. He attacked a statement by the Bank of England governor Mark Carney, saying that his claim that, “vast majority of the world’s fossil fuel reserves could be “stranded”, becoming “literally unburnable” without expensive carbon capture technology” is wrong and that the growing demand for energy (IEA predicts increases of 30% by 2040) cannot be satisfied by sources other than fossil fuels, “Anyone who sees humanity flicking the switch of a vast, affordable, zero-carbon energy system in the near future is staring at a mirage.”

Instead he argues that there are ways of reducing carbon emissions that include fossil fuels not exclude them. “In the past decade, the shale gas industry has weaned electricity generators off much dirtier coal. It is a revolution that could never have happened if gas prospectors had despaired of ever lifting their reserves above ground.”

Lambert warns that ‘unforced errors’ by governments – potentially through treaties such as the one to be agreed in Paris – will have unrealised consequences. Instead of supporting investment which could lead to switching from coal to cleaner fossil fuels, he says it might end up with robbing “millions of people in the developing world of their best chance of escaping poverty. It would be a tragedy — and one that humanity need not endure.”

Back in April the UN envoy on climate change acknowledged this. Mary Robinson, former president of Ireland and ex-UN Human Rights chief said, “No country has developed without fossil fuels to date, so cooperation is key to providing the technology, finance, skills and systems to create an alternative way of developing.”

With thousands of people pulling out suitcases and passports readying themselves for CAP 2015 on November 30th, there will be no shortage of alternative plans. Will the way forward be renewables or cleaner fossils? Or might the best way forward be a mix of both? Many questions – but will there be any answer? Indeed will everyone come out of the summit with the same answer? That remains to be seen..