The energy industry is pushing the threat of global conflict as a major reason why countries need to keep using fossil fuels, despite the push to end dependence on them as a way to battle climate change.
As conflicts among countries increase, from Russia’s aggression in the Ukraine to the Middle East, countries will have to place greater importance on energy security, which would drive the use of more petroleum and coal. That would increase reliance on ample supplies of oil and natural gas from the United States and cheap in-country coal.
Norwegian oil giant Statoil recently modeled “conflict” as a variable in charting energy use over the next three decades, where it found countries increasing their reliance on coal through the middle part of the century as a hedge against importing energy from countries they didn’t trust.
The oil company says the conflict scenario places the focus on energy independence, not climate change, as the leading factor for extending the use of coal through 2040.
The World Coal Association underscored the “energy security” importance of coal in the future energy mix as an abundant resource found in nearly every country on the globe, providing the ability to “guard against import dependence and price shocks.”
The American Petroleum Institute, representing major oil companies, also sees energy security as a driver of increased fossil fuel development, especially oil exploration in the Arctic. The trade group is pressing the Obama administration to make drilling a strategic priority. Not doing so could put the U.S. and its allies at the mercy of hostile countries such as Russia and Iran, it says.
“We have the global economy and our allies looking to the U.S. more and more as becoming a stable swing producer, given where we’ve gone with…shale energy development,” Erik Milito, the group’s upstream director told reporters earlier this month. “And if we can complement that with maintaining our offshore [resources] in the Gulf, potentially the Atlantic, and…with Alaskan resources, then we may be a secure supplier that more of the world is looking to, so that when there are disruptions it’s not going to be a situation where the world is relying on Russia or Iran, or anyone like that.”
Eirik Waerness, Statoil’s lead economic strategist, was in Washington earlier this month discussing his company’s projections for energy until 2040, with climate change as a huge challenge.
Nevertheless, his projections have a “very important message” to deliver: “In all these scenarios oil and gas are here to stay.” Although coal use would increase in the company’s “conflict” scenario, the company also sees natural gas taking an increasing share of the market, even under strict emission limits to meet new international climate goals. Natural gas burns cleaner than coal, and the U.S. shale boom has made gas more cost competitive. And because it’s being produced at record levels in the U.S., it has given the nation capacity to reduce emissions while becoming energy secure and less dependent on imports, proponents say.
The climate change goals will be hashed out at a United Nations conference in Paris that is slated to begin at the end of November. The U.S. and other nations will seek agreement on a framework to reduce global warming by 2 degrees Celcius by the middle of the century by curbing emissions from fossil fuels. Statoil, Shell and other oil companies want the agreement to place a price on carbon that could help drive demand for natural gas.
Waerness told the Center for Strategic and International Studies that the U.N. goal is a huge challenge, especially given the conflict scenario in which global emissions from coal increase, making it more difficult to hit the climate targets.
Under the conflict scenario, he says, coal would remain one of the principal choices for producing electricity because of its availability as an in-country resource.
But others tracking global climate change policy don’t agree that coal use would be widespread, even with energy security as a priority. Sharon Burke, senior adviser on international security at the nonpartisan New America Foundation think tank, says in countries such as China there has been a public outcry against the use of coal because of the pollution and health risks it creates.
The move to reduce coal use in China is “not just a tree-hugger priority,” she says. People there understand if coal use continues or is increased, “you’ll pay a price,” Burke said. Nevertheless, “India, China, a lot of countries have a lot of coal and they will continue to use that, right now, today.”
She says it would be hard to imagine China making a policy choice to use more coal given other options. Burke also says that coal has specific limitations, especially when considering much of the world’s energy use comes from transportation fuels.
“The thing is coal is hard to use for transportation. And that’s what it all comes down to. You can [use coal] but it’s not a very effective way of producing transportation fuels,” Burke said.
As for making oil drilling an energy security priority, “Right now, [the oil market] is in over-supply, and it will probably be in over-supply for a…while. So you don’t really see that scenario happening.”
Vice President Joe Biden, addressing a clean energy summit at the White House last week, said “reality has a way of intruding” when it comes to climate change, and China is a prime example of that.
“Five years ago, China was building — they still are — one coal-fired plant a month.” He said he traveled there to talk to then President Hu Jintao about pollution, and for him it “wasn’t a problem.”
“But there is a human tragedy happening in China,” Biden said. A new study published in Environmental Science & Technology the same day Biden gave his speech found that improving air quality could prevent 1.4 million premature deaths per year in China and India. The study found that airborne pollution resulted in 3.2 million deaths worldwide in 2010.
“The Chinese people put up with a lot, but they will not allow their government to continue to ignore the human consequences on their health. And so the government is making different policy choices” to change the energy mix, he said. It has become a “political necessity” for China to address its use of fossil fuels. “Reality is intruding.”
