Inexhaustible and inexpensive energy have long been core to popular American beliefs in what drives their economic growth and standards of living. But the notion of U.S. energy security as ready, affordable supply is deceptively simple. The reality is, in a highly globalized and interdependent world, a unilateral U.S. solution to energy security is an illusion. As long as the U.S. remains a large net energy importer, its energy security must involve others, both bilaterally and multilaterally.
Any discussion of U.S. energy security must start with the basic global energy facts of supply and demand. According to the International Energy Agency, world primary energy consumption is estimated to increase by 40 per cent by 2030, with the fastest growth coming from Asia. And, with current technologies and installed systems, fossil fuels will remain the dominant source of primary energy over the next several decades at least.
The global context is being reshaped further by a number of transforming factors including the economic gravity shift to Asia, the hang-over from the great global financial crisis and recession, and the geographical reality that much of the world’s fossil fuel supplies and reserves are directly or indirectly under state control or in regions of the world with significant security challenges. We appear to be at a global pivot point, lurching unsteadily towards a new world order but with little confidence and certainty about the future.
Complicating the U.S. energy security challenge further are public expectations for solutions that often appear out of line with energy market realities. Take climate change as a prominent example. The reality is that long term greenhouse gas emissions will only go down if the effective price of carbon goes up, shifting demand away from fossil fuels and, importantly, encouraging technological innovation. Yet, U.S. aspirations to reduce GHGs appear to be unrelated to projections of growth in energy usage, existing fossil fuel pricing and current technology envelopes.
Fundamentally, the U.S. is seeking security of energy supply, and in today’s uncertain and volatile world, secure supplies of energy should be a premium product at a premium price. But, will there be convergence between the price expectations of U.S. consumers and politicians, and energy prices consistent with attracting secure long term energy supplies? The obvious question is whether the U.S. is willing to engage other countries to create realistic, win-win energy security partnerships going forward.
Overlaying the framing of U.S. energy security is the deep and multi-layered relationship between Canada and the U.S. Our nations confront many similar issues in terms of energy, the environment and the economy. Not only do the U.S. and Canada share an integrated North American economy, but we are also custodians of a North American environmental space that is frequently not constrained by national borders.
From a Canadian perspective, we should be seeking security of demand at prices commensurate with the unique security aspects of our long term energy supplies. This will require alternate sources of energy demand, and these are not possible without energy pipelines to the west coast. It will also require better branding of the Canadian energy product in the U.S. and elsewhere. We need to take the initiative to create clearer international understanding of the size of our energy reserves; the market orientation of our energy sector; and the commitment and progress in improving the energy efficiency, water usage and environment impacts of the oil sands.
It is interesting to speculate how the U.S. might engage Canada as part of achieving its energy security. Would it be willing to pay a premium for Canada’s secure, long-term energy supplies? Would it recognize the need for some co-ordination of clean energy policy actions? Would it include Canada as a partner in clean energy R&D and innovation? As these are key to achieving energy security, any Canadian-U.S. energy security partnership would have to have the scope to include them.
With an integrated economy, interconnected energy markets and common pressures to seriously tackle the environment and climate change, bilateral negotiations towards a clean energy accord, not unilateral actions, are in everyone’s best long term interests.
Source: www.theglobeandmail.com
Any discussion of U.S. energy security must start with the basic global energy facts of supply and demand. According to the International Energy Agency, world primary energy consumption is estimated to increase by 40 per cent by 2030, with the fastest growth coming from Asia. And, with current technologies and installed systems, fossil fuels will remain the dominant source of primary energy over the next several decades at least.
The global context is being reshaped further by a number of transforming factors including the economic gravity shift to Asia, the hang-over from the great global financial crisis and recession, and the geographical reality that much of the world’s fossil fuel supplies and reserves are directly or indirectly under state control or in regions of the world with significant security challenges. We appear to be at a global pivot point, lurching unsteadily towards a new world order but with little confidence and certainty about the future.
Complicating the U.S. energy security challenge further are public expectations for solutions that often appear out of line with energy market realities. Take climate change as a prominent example. The reality is that long term greenhouse gas emissions will only go down if the effective price of carbon goes up, shifting demand away from fossil fuels and, importantly, encouraging technological innovation. Yet, U.S. aspirations to reduce GHGs appear to be unrelated to projections of growth in energy usage, existing fossil fuel pricing and current technology envelopes.
Fundamentally, the U.S. is seeking security of energy supply, and in today’s uncertain and volatile world, secure supplies of energy should be a premium product at a premium price. But, will there be convergence between the price expectations of U.S. consumers and politicians, and energy prices consistent with attracting secure long term energy supplies? The obvious question is whether the U.S. is willing to engage other countries to create realistic, win-win energy security partnerships going forward.
Overlaying the framing of U.S. energy security is the deep and multi-layered relationship between Canada and the U.S. Our nations confront many similar issues in terms of energy, the environment and the economy. Not only do the U.S. and Canada share an integrated North American economy, but we are also custodians of a North American environmental space that is frequently not constrained by national borders.
From a Canadian perspective, we should be seeking security of demand at prices commensurate with the unique security aspects of our long term energy supplies. This will require alternate sources of energy demand, and these are not possible without energy pipelines to the west coast. It will also require better branding of the Canadian energy product in the U.S. and elsewhere. We need to take the initiative to create clearer international understanding of the size of our energy reserves; the market orientation of our energy sector; and the commitment and progress in improving the energy efficiency, water usage and environment impacts of the oil sands.
It is interesting to speculate how the U.S. might engage Canada as part of achieving its energy security. Would it be willing to pay a premium for Canada’s secure, long-term energy supplies? Would it recognize the need for some co-ordination of clean energy policy actions? Would it include Canada as a partner in clean energy R&D and innovation? As these are key to achieving energy security, any Canadian-U.S. energy security partnership would have to have the scope to include them.
With an integrated economy, interconnected energy markets and common pressures to seriously tackle the environment and climate change, bilateral negotiations towards a clean energy accord, not unilateral actions, are in everyone’s best long term interests.
Source: www.theglobeandmail.com
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