The war of energy independence is on! Like all wars there will be losers. And like some wars, we stumbled into this one. Through the narrowing of options, outdated partnerships and the emergence of new options, the global energy landscape is getting on a new footing. Bold statements can be used to describe any period in our recent energy history. But there are five reasons why the War of Energy Independence is on:
1: High oil price
High oil prices are driving diversification. The global economic decline and the link to oil is clear, policy makers must now attempt a partial break between the oil based economy and economic growth. It would be great to pronounce this break as a clear strategy that governments are pursuing, but while the logic is there, the policies and actions are not. Greater oil dependency may also create war (Iraq et al.) and even now reducing oil usage creates a more effective US military.
2: Shale gas technology
As sexy as it is to cite shale gas as a game changer, there is no doubt it has altered the carbon landscape in the US. It is also the biggest indicator of the technological based war for energy independence. The dramatic impact it has made in the US and what the US economy can achieve through cheap gas, indicates the fossil fuel era is not over, but on a new course. It is also a clear export technology the US is pushing throughout the world. For us observers in the CEE region, the US government just a few years ago was absent. Starting in Hungary and spreading throughout the region, with the emergence of the shale gas potential, the US government and the oil majors are now more than happy to show up to energy conferences. The push for energy diversification for the CEE/SEE countries, away from Russia, is supported by the US government by using shale gas technology – not renewables. Overall, whether in the US or Europe gas from shale deposits can provide diversification and increase national energy security.
The war is on: Technology killing off big oil – but is it possible? Can a politician kill oil dependency?
3: Nuclear is out-ish
With the anniversary of Fukushima on us, the profound impact it has had on the nuclear industry in the Europe and America as a widely deployed technology means it is now a marginal technology. I am a supporter of nuclear power, but it remains hard to see how the third and fourth generation reactors, that are much safer, can be deployed to demonstrate its long-term viability. If we live in an age of competitive markets with short term investments dominating the energy landscape, then long term projects like nuclear (or Nabucco) will be the rare exception. For these to go ahead, other factors like energy security (or corrupt business practices) will have to overcome the current financial and even technical realities of alternatives that are now present. Thus, in one sense this war based on a technological race may have its first victim.
4: Renewable Energy – it is here and now
The wide deployment of renewable energy and the demonstrated success of it means it is here and now. Technological success is not a question – it is just a question of whether governments will enable it to succeed – and at what level. As Germany is demonstrating you can have a future without nuclear and with large, large scales of clean energy technologies.
5: Energy Efficiency– well, is it here?
The big acknowledgment that energy efficiency plays in an essential role in a low carbon economy is as persuasive as clean air is good for us. But what is being done? The dispersed action that must occur means creating effective energy efficiency schemes are not as easy as building a centralized generation plant. It take local and national action to make it happen, along with creative financing. The pay-offs are huge and can make a significant difference in ‘winning’ the War of Energy Independence. But the wide spread deployment of energy efficiency measures remains a battle that still must be fought.
The war is spreading beyond Washington and Brussels. In Bulgaria there is now the Movement for Energy Independence (DEN) that seeks to create an energy strategy built on technologies and resources not dependent on Russia – including re-evaluating and using shale fracturing technologies. This movement on the European periphery is indicative of the merging of three issues: 1) energy security, and a push for reducing reliance on Russian energy dependence (gas, oil and nuclear), 2) the viability of renewable energy technologies, and 3) the broader issue of climate change. The necessity of having a carbon based economy is no longer there. Proven technologies can now be utilized that are distributed, or the resources are delivered from multiple sources, located nationally or regionally. Gas, can now come from shale deposits, LNG or by pipeline from non-Russian sources. Oil’s high price creates an inducement to move away from it, while energy efficiency can reduce demand for all energy inputs. Who wins the war of independence will play out in the corridors of power – politicians now hold the key to decide which technologies will be favored.