Europe Can Teach America about Energy Security and Climate Policy

Yesterday, Forbes.com published a column by Larry Bell, “Disarmament in America’s Energy Security Battles”.  I thought it was extraordinary, even by the low standards of opinion journalism, in its blatant disregard for the facts.  So, I wrote to Forbe's editors, in order to correct the record.  I've copied the letter below.  

I am writing in response to Larry Bell’s November 18 column, “Disarmament in America’s Energy Security Battles” printed on Forbes.com.  This column is notable for its lack of facts and its assertions against renewable energy that simply do not have a basis in reality.  Mr Bell uses hyperbolic language and assertions that are simply not backed-up by the facts.As a favor, then, to Forbes’ editors and readers, I will attempt to put some real facts behind his statements, then you can determine whether his assertions are correct, or just hot air.  As the author of “Learning from Europe on Climate Change” in the December 2009 issue of Survival, I am well-placed to offer informative, fact-based analysis of energy security and climate policies. I would appreciate it if you would print my response in full. 

An unfairly maligned Spanish wind farm

First, Mr Bell asserts that the EU is facing “costly, yet unsuccessful, CO2 emission reduction efforts.”  In fact, the opposite is true – the EU has been successful in reducing its emissions, and at low cost.  Last month, the European Commission released a report stating that, by 2012 (the date for compliance with the Kyoto Protocol) the emissions of the EU-15 (the 15 Western European countries) will be 10.4% below 1990 levels, and the emissions of the EU-12 (the 12 former East Bloc countries) will be 36.8% below  1990 levels.  This means that the EU as a whole will reduce its emissions 17.3% below 1990 levels.  Alone among major developed economies, the EU will meet the emission reduction commitments it made when it signed the Kyoto Protocol.  In Europe, it is true, the cost of energy – both electricity and gasoline – is generally higher (rates vary greatly throughout the EU), but that is the result of long-standing government policies that encourage energy security, not a recent increases from climate policies.  In France, for instance, the cost per KWh of electricity is about 19.25¢, while in the USA, it is about 10.45¢. 

Mr Bell then goes on a rant against the wind industry.  It is true that wind energy requires high up front infrastructure costs, but he does not acknowledge that once they are running, there are no fuel costs – which can fluctuate widely – as there are with traditional electricity power plants.  He then cites a report from Spain, repeatedly pushed by the right-wing Heritage Foundation, that has been widely debunked as based upon flawed analysis and untrue foundations. For instance, the report estimates that Spain’s renewable program created only 50,000 jobs, when official estimates are 188,000. The argument they make is that supporting renewable energy destroys jobs by causing the loss of 2.2 jobs for every 1 created.  It is based on flawed analysis, and it just goes to show that you can always find an economist to support your view.  It doesn’t make them right, though.   

Mr Bell then states that “high wind power premiums” get passed onto customers, while talking about wind farms in Texas.  What he doesn’t mention is that in his home state of Texas, the state with most installed wind power – about 8 gigawatts – the Public Utility Commission said “Wind generation has had the impact of reducing wholesale and retail prices of electricity.”

New Options For Kyrgyz Engagement on Energy Security in Central Asia

Below is a guest-post from IISS Intern Madeliene Foley, looking at the Energy Security and geopolitical implications of the coup in Kyrgyzstan.

The recent coup in Kyrgyzstan came on the heels of the completion of the Asia Gas Pipeline in December 2009, a project that is unprecedented in scale and extent of collaboration among regional powers. The coup is still causing reverberations throughout Central Asia -- a region increasingly dependent upon uninterrupted energy transit routes to China, Russia, and the West. Though it has no oil or natural gas, the now deposed President Bakiyev would have done well to leverage Kyrgyzstan’s strategic location to frame itself as a critically important transit route between oil-rich Kazakhstan and gas-rich Uzbekistan and their fastest growing customer- China.

Instead, the pipeline, which traverses Turkmen, Uzbek, Kazakh and Chinese territory, noticeably bypasses Kyrgyzstan. This can be attributed to early difficulties and missteps in negotiating favourable contract terms. However, Kyrgyzstan’s failure to market itself as a desirable transit route means that is has not cashed in on the recent growth in Central Asia’s energy sector, even though a glance at a map would show that it should be particularly well placed to receive some of China’s increased investment.

China’s interests in the region are an attempt to secure oil and gas supplies to continue and sustain its steady economic growth. It currently depends on sea access for 90% of its imports, which presents a critical threat to its energy security. The Asia Gas Pipeline and a second Kazakhstan-China oil pipeline will expand inland fuel transport capacity well beyond the current 10%. Securing crude oil is a top priority in Chinese energy policy as daily imports have grown from 2005 levels of 3.5 million barrels-per-day to 9 million bpd today.

Though they share a common border, Kyrgyzstan has no foreseeable plans to deepen its economic and infrastructural ties with China. Given that Kyrgyztsan has had difficulty meeting its own domestic power needs in the past, it would seriously behove the interim government to reach out to China on pipeline construction as they have to the US on automatically extending the Manas air base contract. The new Kyrgyz regime has thus far promised to cooperate with the US government in securing Manas, but there has been little speculation of how the coup will affect Central Asia’s energy industry.

Moreover, as Central Asian and Chinese leaders have grown closer and established deeper diplomatic and economic ties, Kyrgyzstan has remained isolated (note that Bakiyev is the notable Central Asian leader not pictured with Chinese President Hu Jintao). Skilful manoeuvring on Kyrgyzstan’s part now could secure its place as an integral transit route as Georgia has in the recent past. Kyrgyzstan’s best option at present is to reinvigorate its relationship with neighbouring states. Establishing a friendlier and more pragmatic regional outlook will both reassure neighbouring governments and lay the foundations for meaningful progress on energy infrastructure development in the future.

Linking Energy Security and Climate Change

A few weeks ago, the IISS held a workshop on climate change and energy security.  During this workshop, there was a strong debate about whether climate change should be linked to energy security.  Below is a summary of the debate, and some proposed solutions that arose out of it.

Energy Security and climate change are often linked in public debate. An example of that is the Truman Project's "Operation Free" (see their ad here).  However, it is not self-evident that climate change will necessarily lead to energy insecurity, or vice versa. National energy security was generally defined during the workshop as a secure supply, open access, and protection from interruptions of that supply. No one at the conference espoused full energy independence (autarky) as being equivalent to energy security. The CNA has showed in their "Powering America's Defense" report that dependence on foreign energy supplies – particularly limited petroleum resources – presents a serious threat to security because it weakens international leverage, jeopardizes the military, and entangles the US government with hostile regimes.

Climate change direct threats to energy security, particularly to existing energy infrastructure. Examples of disruptions to energy supplies that could cause disruptions to energy supply include hurricanes damaging offshore oil rigs, droughts reducing hydro power availability, melting permafrost undermining pipelines, or heat waves causing rivers to be unusable to cool nuclear reactors. Some argue that these are minor threats in the energy security debate, and therefore climate change’s effect on energy security should not be portrayed as a strategic issue. On the other hand, we should be aware that there is great scientific uncertainty about the magnitude of climate change and whether there are any projected ‘tipping points’ that could lead to rapid, dangerous changes. What we don’t know, especially about variability, leads to more questions, and that should worry planners. Because small changes in climate could lead to large and unknown effects on complex and interrelated systems, like energy supplies, we should be very careful about predictions. If planners could predict events with 100% certainty, there would be no risks to security from climate change: we would choose to either adapt to or avoid the worst threats.

There is a sharp debatedivided on how closely related concerns about climate change were to concerns about energy security. The CNA (mentioned above) directly links climate change, energy dependence, and national security, stating that continued reliance on fossil fuels creates “an unacceptably high threat level from a series of converging risks” that include conflicts over fuel resources, destabilization driven by ongoing climate change, and threats to critical infrastructure. However, others argue that climate change is as much a security risk as other transnational factors, like religion or ethnicity, and governments should not raise it to the same priority as energy security. Portraying climate mitigation policies as ways to increase energy security could then be seen as a willful manipulation of the public.

Though there is sharp disagreement about how closely related the problems of climate change and energy security were, it should be clear that the solutions were linked. Even if we accept the premise that energy and climate security are two major and separate problems, they have the same solution: a move to a low-carbon economy. Energy security, particularly in the United States, means reducing dependence on oil imports. Petroleum products are largely used to transportation, which accounts for about 15% of global greenhouse gas emissions. A focus on reducing oil usage in transportation could have important impacts on reducing emissions and energy security. The military can have an important role in fostering this switch, particularly to low-carbon transportation fuels. It is already pioneering new biofuels and efficiency measures. It can contribute to these as a technological innovator and early adopter. Fostering a change that would create a stable energy base and a secure climate is possible, but it requires strong leadership; nations should look to their militaries to help. Though energy security and climate change may not be technically connected, the problems have evolved together, and their solutions must run in parallel.

Energy, Climate, Security, and Optics in Obama's Speech

Today, President Obama gave a speech (which you could have watched live here on this blog) that was billed by the White House as a speech on "Energy Security and Independence".  I'm not sure that the actual announcement today that the US will open more of its Outer Continental Shelf to offshore drilling was that important, and I'll leave it to others to argue about how the policy change will do much good or bad for climate legislation.

However, the optics of today's speech are probably the most important part of it. By holding the event at Andrew's Air Force Base, in front of a (clean, green) F/A-18 'Green Hornet' fighter jet the administration is signaling that they are going to treat energy security and climate change policy as the security threat that it is.  The President was speaking directly to a group of servicemen who probably will all spend at least one tour of duty in the oil-rich Middle East as a direct result of our energy dependence.  Hopefully, this is only the beginning of a series of Presidential events that will show how climate change and energy dependence create threats to our national security.    

It is important that this 'securitization' of energy and climate policy is not done cynically.  If the Administration has decided that the only way to pass a comprehensive climate bill is by wrapping it in the flag, then it is not worth doing.  However, we know, through the good work that the CNA corporation has done in preparing it's “National Security and the Threat of Climate Change” and "Powering America’s Defense: Energy and the Risks to National Security"  reports that this is an issue that is critically important to our national security.  Since the first report, released in 2007, other important reports from the National Intelligence Council, the DoD, and others have comprehensively linked American national security to our dependence on foreign energy, and the looming instability of climate change.  However, the CNA's reports also show a good way forward.  They suggest that the achieving energy security is possible but it requires strong leadership. The Green Hornet on display behind the President today shows how DoD can be a leader by becoming an early adopter and a test bed for new technologies, especially low-carbon fuels.

President Obama today showed that he gets this linkage:

"For decades we’ve talked about how our dependence on foreign oil threatens our economy -– yet our will to act rises and falls with the price of a barrel of oil. When gas gets expensive at the pump, suddenly everybody is an energy expert. And when it goes back down, everybody is back to their old habits.

For decades we’ve talked about the threat to future generations posed by our current system of energy –- even as we can see the mounting evidence of climate change from the Arctic Circle to the Gulf Coast. And this is particularly relevant to all of you who are serving in uniform: For decades, we’ve talked about the risks to our security created by dependence on foreign oil, but that dependence has actually grown year after year after year after year."

The question now is whether he can sell it to the American people. 

President Obama's Energy Security Speech

Below is a live stream of President Obama's speech on energy security.  Notice how we've gone fully in the securitization of energy policy.  The President is announcing the new energy plan in front of a fighter jet.  I think it looks like a Navy F-18, but this is an Air Force Base, so that can't be right.  Post in the comments, if you think I'm wrong. 


From the preliminary reporting I've read about the speech, I'd say that offshore drilling must be a very important part of our national energy policy.  However, it is just a part, that must include renewable energy, natural gas, and new technology.  We can't solve our energy security problems by simply drilling offshore, but politically I would say that breaking the taboo on offshore drilling is an important signal that the US government is willing to take the difficult steps to really address energy security.

I'll write more after the speech.

UPDATE: it appears that the White House's stream is only audio.  If you want video, CNN has it here:
http://www.cnn.com/video/flashLive/live.html?stream=stream1

UPDATE #2: it was a Navy F/A-18.  However, it was a 'Green Hornet' that had been modified to fly on a 50/50 mix of jet fuel with biofuel.

UPDATE #3: Now I've got the White House's Video successfully embedded. 

The European Model for Climate Change

I have a new article up in the December-January issue of Survival. Its for subscribers only, but non-subscribers can read the first 500 words here.

This is a review essay of David Buchan’s book: Energy and Climate Change: Europe at the Crossroads (a steal at 25 pounds!). My argument is that Buchan’s book should be used as an instruction manual. Policymakers looking to set up aggressive action on climate change – either at the international or the domestic level – should learn from the mistakes and the successes of the EU. Though they’ve had their difficulties and false starts over the past decade in setting up an effective regime, Europe has finally succeeded in creating a climate policy that will allow it to meet its Kyoto targets.

For other important views on climate change in this month’s Survival, I’d suggest reading “Climate Change and Copenhagen: Many Paths Forward” by Paula Dobriansky and Vaughan Turekian.

Natural Gas Reserves

Though not technically about the security effects of climate change, natural gas is becoming a key part of the energy future for the United States.

Natural Gas is often thrown into the same fossil fuel paradigm as oil and coal. For example, President Obama's recent speech at MIT said: "figuring out how to use the fossil fuels that inevitably we are going to be using for several decades, things like coal and oil and natural gas; figuring out how we use those as cleanly and efficiently as possible". This implies that natural gas is at the same level as coal or oil. It is not.

Natural gas burns cleaner than coal: it produces only about half as much CO2 as coal to produce the same amount of power, and very little smog-forming emissions. New finds -- what Daniel Yergin calls the 'Shale Gas Revolution' -- mean that we can produce more of our energy for electricity and transportation here, cleaner than we ever have before.

These new finds are not simply marginal changes. They are revolutionary. In June, the Potential Gas Committee (PGC), a US non-profit estimated US gas resources at the highest level in the committee’s 44-year history, a 35% increase over the last estimate published in 2007. They said that that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, in all types of reservoirs.

However, this has not yet seemed into the political debate. The Natural Gas industry has nowhere near the political clout of the coal industry in Washington, because it is newer, more geographically diverse, and primarily smaller companies. They are trying to increase their power, before the Senate debate, so that the US doesn't get stuck by the cap and trade bill into a long-term commitment to 'clean coal' (whatever that is defined as).

We need to seize upon this windfall by switching our baseload electricity generation to natural gas. These plants can be used as the perfect back-up to expanded renewable power, because they are qucik, cheap, and easy to turn on and off (unlike coal-fired power). We need to transition our heavy transportation (trucks) from diesel to natural gas, while transitioning our light transportation (cars) to electricity (which will be generated from natural gas). A quick back-of-the-envelope calculation says that you could reduce US emissions by about 1 billion tons (15%) of carbon per year with these two switches, which would be likely to save money.

What China Really Wants - Technology

The US delegation that recently visited China failed to return with any substantive concessions on the part of either country. Despite its rhetoric that developed countries should cut emissions by 40% from 1990 levels by 2020, in the course of negotiations, it’s clear that China wants easier access to high level US technology. That’s the key demand, an issue of technology and development rather than a claim of fairness based on history.

But the US is hesitant to acquiesce over concerns of intellectual property violations for fear investors would be skittish over pouring money into technology that would be cheaply copied. Specifically, currently non-commercial cleaner energy sources like clean-coal, geothermal, and deep sea floating wind-turbines, all require large upfront capital and R&D costs. These sunk costs would not be borne by a country that copies the technology. It would be difficult, both economically and politically, to give China this kind of technology for free. It could undercut US competitiveness. China – though unlikely to spend them – holds over a trillion dollars worth of US Treasury Bills already; its hard to argue that they can’t afford to invest in this technology themselves.

What China might be trying to do is use climate change as leverage to gain easier access to some of these technologies so they develop faster and at the same time mitigate emissions. Today, US lead negotiator on climate change Todd Stern clarified the US position on China’s obligations stating that “We are expecting China to reduce emissions very considerably compared to where they would otherwise be...[in] a business-as-usual trajectory”. He also said China should establish a timetable for peak years of emissions.

Good idea, but in clarifying these expectations months ahead of the Copenhagen negotiations, is the US weakening its bargaining position? As the Guardian article says “Observers see the 40% demand as unrealistic, suggesting the US move amounts to blinking first in the negotiations”.

China US Climate Change Cooperation Part 1

China expert Orvell Schell has an article on YaleEnvironment 360 about the US-China conflict over climate policy; its worth reading. He contends that key actors in the US and Chinese government view climate change as an economic and political opportunity for the world.

Developing nations like China and India are seeking to modernize their economies for a green future. Realizing that it’s impossible economically and ecologically to develop just as the United States did, both countries are trying to leap ahead by becoming dominant players in emerging technology markets like solar and clean coal. As last week’s Foreign Relations Hearing demonstrated, China’s government has passed substantial legislation aimed at modernizing its electricity grid, promoting renewable energy, manufacturing electric cars, and building energy efficient buildings.

Now, the United States’ relationship with China is changing in light of the threat of climate change. Speaker Nancy Pelosi, and a delegation of Members of Congress, visited China two weeks ago to see China’s efforts first hand. Pelosi, who in 1991 unfurled a banner in Tiananmen Square recognizing the massacre in 1989, wrote an Op-ed today calling the climate change crisis “a game-changer in the U.S.-China relationship.” Because the US and China collectively contribute to about 40% of current greenhouse gas emissions, any international treaty on climate change will need both countries on board.

China’s government could have trouble meeting its ambitious goals. at all levels is notoriously plagued with corruption and a lack of transparency at all levels: both symptoms of a totalitarian state. Pelosi thinks China’s attempts at combating climate change will necessitate political, not just economic, liberalization:

“Our governments will have to make difficult decisions that must be based in
science. The challenge of the global climate crisis must be met with openness,
transparency, respect for the rule of law, and the government must be
accountable to the people. The principle of environmental justice must be
upheld, especially when poor people are more adversely affected by drastic
environmental changes than others.”

Elizabeth Economy, at last week’s hearing said the same thing. Unless local officials in China start actually following the environmental policies the national government sets out and stops falsifying data or ignoring the law, China’s emissions will never be reportable, measurable or verifiable and thus it’ll be unable to meet any of its international obligations or actually improve its climate. That’ll only happen if the Chinese government makes itself more accountable and transparent at all levels.

The Implications of Canada's Tar Sands

Last week’s New York Times has an summary of a report by the Council on Foreign Relations about Canada's enormous oil sand reserves. The Council’s report encourages the coordination of climate and energy policies between the United States and Canada. The oil sands are estimated by the government of Alberta to contain about 170 billion barrels of ‘technically recoverable’ oil. These reserves would make it second only to Saudi Arabia.

However, extracting and refining oil from the tar sands is typically much more water and energy intensive (and expensive) than pumping crude straight out of the ground. Consequently, the report also recommends that the Canadian government invest more heavily in developing carbon capture and sequestration technologies to make the oil sands less dangerous to the climate. Since last year’s economic downturn and oil price collapse, investment in the tar sands has collapsed, but recently Exxon-Mobil announced they are resuming investment activity, indicating their confidence in the tar sands as an economically viable source of oil despite the uncertainty over what the US Congress will pass on climate change and carbon.

Additionally, the report suggests that any US carbon trading framework (like the new Waxman-Markey bill) includes Canada; it should at least result in similar carbon prices on both sides of the border. Of particular relevance to the ongoing debate in the United States Congress over Waxman-Markey is the article's contention that carbon permits should be freely allocated to companies developing the oil sands. In terms of US energy security, the report highlights how purchasing oil extracted from the tar sands could potentially cut into OPEC's revenue stream as well as reduce US dependence on oil from the Mideast.

This debate on the merits of the tar sands highlights the complexities of balancing environmental and energy concerns (see: Greenpeace's attempt to lobby Norway to divest from the Alberta tar sands).”

Energy Security and Climate Security

The first plenary session, chaired by Inkster, was titled “Energy Security and Climate Security: Are long-term security from climate change and short-term energy security compatible?” The three panelists were: Lieutenant General Larry Farrell, retired from the U.S. Air Force, of the CNA Corporation’s Military Advisory Board; Christophe Sammartano, Principal Counselor for Energy Security at the French Ministry of Foreign Affairs; and David Buchan, a Senior Fellow at the Oxford Institute for Energy Studies.

General Farrell underscored that dependence on imported oil is a clear national security threat to the United States, and has been since 1970. He stated that moving away from oil will be a major technological undertaking, taking decades. Citing his experience as the Air Force’s deputy chief of staff responsible for planning, he said that it was critically important for long-term planning purposes that oil and gasoline prices are predictable, and that fluctuations from $50 per barrel to $147 and back over a nine month span makes long-term budgeting impossible for large institutions like the military. The Department of Defense – as the United States’ largest consumer of fossil fuels – should be a leader in this fight. He highlighted that the goal of U.S. policy should be to “Change oil from a ‘strategic commodity’ to a regular commodity, just like wheat.”

Christophe Sammartano, a specialist on Europe’s energy relationship with Central Asia and Russia, spoke about the need for Europe to achieve energy security by diversifying its energy supply away from dirty sources like coal and from politically risky areas like Russia. Like General Farrell, he emphasized that there needs to be significant technological advances, including in battery storage, new nuclear power, and carbon-capture and sequestration, before true long-term energy and climate security can be achieved.

David Buchan, author of the recently released book Energy and Climate Change, Europe at the Crossroads, spoke about how climate change policy has helped to unify a European energy policy that has traditionally been dealt with at the national level. Policies of climate-mitigating carbon reduction, however, can not be considered in isolation from the two more traditional strands of EU energy policy: market liberalization and security of supply. He stated that the US can learn from European policies, especially stating that prices in the US are too low, and suggested that a significant increase in the gas tax will be necessary.

Questions from the audience were varied and insightful. All participants agreed that prices for fossil fuels will need to rise in order to provide economic incentives for renewable energy. Over the long term, panelists expressed concerns about the ability of Russia to meet its role as an energy supplier: citing a lack of investment, problems of transparency, and a politicization of energy supplies. Sammartano explained the January 2009 Russia-Ukraine gas crisis as a combination of political and economic disagreements that led to an impasse. Finally, there was a sense that energy security has two different definitions: for Europeans, it means a diversity of suppliers and sources; while for Americans it means a reduction in imports.

Ethanol Importation from Brazil

Two weeks ago, President Lula of Brazil visited the White House. What was most news-worthy from the climate-security perspective is their discussion of trading Brazilian sugar-based ethanol. It is no surprise that Lula favors an opening of the U.S. ethanol market to imports; Brazil has an established and productive ethanol industry. President Obama -- who supported ethanol during the campaign (particularly in Iowa) -- said:

"I know that the issue of Brazilian ethanol coming into the United States
has been a source of tension between the two countries. It's not going to
change overnight, but I do think that as we continue to build exchanges of
ideas, commerce, trade around the issue of biodiesel, that over time this source
of tension can get resolved."

Although this is a classic politician's dodge, he does seem to understand that our current policies are not economically, scientifically, or environmentally sustainable. Perhaps Obama can make some changes to undo the twisted problems that political interference has brought to this market.

Ethanol is one of the most fraught problems in the nexus of climate and energy security. Several years ago, when it was first starting to get ramped-up in the U.S., it was seen as one of the easiest win-wins around. Not only did you get to support 'family farmers' you also got to fight global warming and reduce the importation of foreign oil. Unfortunately, it hasn't turned out to be that simple. It turns out, that when you take land-use into account, corn-based ethanol may not actually be good for the climate. While it has been marginally beneficial in reducing dependence on foreign oil, it probably had the unforeseen problem of raising food prices.