Merry Christmas from the Gas Exporting Countries Forum, who continued to make moves toward formalizing a cartel on Tuesday. Despite ominous quotes from Putin, et al, it seems that natural gas will not be as easily cartelized in the near-term as crude oil (which is a bit of a struggle these days anyway), due to heterogeneity in consumer base, export structure, and infrastructure, according to Xinhua. I’m not particularly well-versed in the structure of international natural gas markets, I just thought this presented interesting political economy and energy issues. So I’d love to hear any knowledge that readers can drop on me. At any rate, here is a solid video that outlines the situation and the major players.
Archive for the ‘Energy Security’ Category
Posted by Evan Herrnstadt on December 25, 2008
Posted by Daniel Hall on October 29, 2008
I attended a portion of today’s event at RFF on energy policy challenges. MIT Professor John Deutch — who has an absurdly broad and interesting personal biography — spoke on energy policy and national security just after lunch. He had three headline points:
- Energy independence is not feasible for the U.S. (or its allies). We can talk about improving energy security but basically people should stop using the term energy independence.
- Our domestic political institutions are not set up in a way that acknowledges or deals with the links between domestic energy issues and foreign policy decisions. As examples he pointed out the disconnect between the House Energy and Commerce Committee and the Senate Foreign Relations Committee; the inconsistency of our long-standing (though recently expired) restrictions on domestic drilling and our persistent requests to overseas producers to ramp up production; and the necessity of U.S. domestic action on climate change as an essential pre-condition for a robust international agreement on climate change.
- Increasing energy security will require incremental changes and a long-term perspective — you are not going to get an overnight overhaul of U.S. energy policy or practice.
Deutch proposed that there were four key areas where energy policy has significant intersection with foreign policy and national security:
- Oil and gas import dependence
- The vulnerability of energy infrastructure to disasters both natural and man-made (including terrorist attacks)
- Nuclear proliferation
- Climate change, including its growing role in the North-South diplomatic dialogue, its growing importance to U.S. standing abroad (and the diplomatic capital it will require in future), and its role in causing migration and conflict in some of the less stable parts of the world in the coming years
He made many other points along the way which I found interesting. I’ve placed these below the fold in no particular order:
Posted by Daniel Hall on December 13, 2007
The first thing we had to do was re-define “energy independence.” The second thing we had to do was re-define “ten years.”
–Bill Hogan, part of the Energy Indepenence Task Force charged with making good on President Richard Nixon’s promise to make the United States energy-independent within ten years.
Via Mark Kleiman.
Posted by Evan Herrnstadt on December 4, 2007
An article in today’s New York Times highlights the tension inherent in Alaskan oil exploration. As Royal Dutch Shell has attempted to explore offshore oil resources off the coast, it has run into some stiff resistance:
It tried to make headway this summer, only to be stopped by an unusual alliance of Inupiat whalers and environmental groups who filed a suit in federal court. They argue that noisy drilling off the Alaska coast could disrupt migration routes for the bowhead whales, making it impossible for the Inupiat to capture their allotted share of about 60 animals per year. A court hearing is scheduled for today to consider whether the company can move forward, though a ruling is not expected for months.
There are generally two arguments for expanded Alaska oil production. One is local economic development:
Richard Glenn, vice president of the Arctic Slope Regional Corporation, the biggest Eskimo-run business, says the oil industry is vital to indigenous communities. The corporation runs a series of energy and construction businesses, and redistributes more than $200 million a year in profits to the Eskimos. “To say that the oil and gas industry succeeds does not mean that our culture fails,” Mr. Glenn said.
However, the mayor of at least one relevant community (the North Shore Borough) is opposed to the exploration, though he recognizes the tradeoffs involved. This is a decision that locals must make themselves. There is non-use value to preservation of indigenous cultures; however, I generally think that one’s choice of lifestyle should be left up to the individual.
However, these indigenous communities often are stuck with undesirable options. One direction is to give up an ancestral culture and accept some payout. Not bad, right? At least they’re compensated, and this very choice indicates that it is the best available scenario, assuming optimizing behavior. However, the flip side of the coin is not generally maintaining the status quo; rather, it is an attempt to live in the past, uncompensated, as the modern world and enormous fees from the inevitable protracted legal battle makes this a decreasingly plausible option. It is analogous to the use of market power to force an agent into optimizing in a second-best world.
Moving forward, the second argument for exploration here (and in ANWR, incidentally) is energy independence: Read the rest of this entry »
Posted by Daniel Hall on October 31, 2007
Energy security and climate change are two of the most significant challenges confronting humanity. What we see, in response, is the familiar capture of policymaking by well-organised special interests. A superb example is the flood of subsidies for biofuels. …
Already the support in members of the Organisation for Economic Co-operation and Development costs about $13bn to $15bn a year. But this sum generates much less than 3 per cent of the overall supply of liquid transport fuel. To bring the biofuel share to 30 per cent, as some propose, would cost at least $150bn a year and probably more, as marginal costs rose.