Yesterday I attended a conference in DC on 'a transatlantic agenda for natural gas supply,' at the Johns Hopkins University School of Advanced International Studies, among mostly energy diplomats and scholars on geopolitical energy affairs. I was invited to a panel to discuss the question: shale gas, a game changer? Here are the remarks I made:
"I appreciate the invitation to be here today and the opportunity to share a couple of things with you. The question to this panel is: “Shale gas: is it a game changer?” Has anyone ever asked which game? If the game is energy security, the answer should most likely be yes. For the United States that game has already changed, with spillover effects to Europe. The estimates for resources that are technically recoverable are huge. However, as one gentleman mentioned earlier today, “the problem with shale gas is that it is gas” - it releases carbon when burned. Due to limited fossil resources, energy security and reducing carbon emissions were two sides of the same medal, but with so many new discoveries of fossil fuels made, the two problems are less and less aligned. Climate change is becoming ever more urgent, while finding alternatives for dwindling fossil fuel reserves is much less pressing.
Let me make three points:
First: for natural gas to become the “bridge fuel” to a de-carbonized economy many promise it to be, additional policy is needed. “We need to steer it that way,” said Mr. Elkind (DOE) this morning. We need policy to really displace coal-fired power generation and incentivize renewable energy sources. Without such policies, increased supplies and lower prices will lead to more consumption with associated CO2 emissions, more than offsetting emissions savings due to a new preference for gas as the fuel of choice for new power generation. And, as we recently learned from the Cornell study on emissions from shale gas, capture or prevention of fugitive methane emissions is required. The Cornell study (Howarth, 2011) has many questionable assumptions and bad data, but one thing it tells us is that we can’t only look at the emissions from burning the fuel to compare it to alternatives like coal; we need to take into account the complete life-cycle.
To be a bridge fuel means to be able to reduce greenhouse gas emissions on the short term and facilitate a shift to zero-carbon technologies on the long-term. The first can be achieved by substituting natural gas for coal in power generation. MIT’s ‘Future of Natural Gas’ study (MIT, 2010) - as Ms. Kenderdine presented in this same room in February - has shown that there’s significant potential to do that here in the US. The second can be achieved by growing renewable sources, like wind and solar power. On their own, when they grow too big, their intermittency would cause problems on the grid, but with flexible natural gas plants as back-up power, larger shares of renewables are possible. However, as other studies have shown (Tyndall, 2011; RFF, 2009), without market interventions gas won’t play this double role. For gas to displace coal, a price on carbon could work. That would also help renewables. But if it’s not enough, additional incentives should be put in place (such as a strong clean energy standard (CES)). The larger point is that we need to think of natural gas within the energy system at large, go beyond gas-to-gas comparisons, discuss what role it has to play in the transition to an energy efficient, low-carbon economy, and make policy accordingly.
Oil & Gas interests had better lobby for such low-carbon policies than against them. The US is already losing the game that really matters, as China and Europe are pushing ahead with clean technologies. Gas should help the US free itself from its fossil fuel dependence, instead of staying stuck in it.
That brings me to my second point, which is about sustainable extraction, about the need to take a long-term perspective and look beyond the gas glut. As abundant as it may be, shale gas, and the jobs that come with it, are finite resources. Once the gas and the jobs are gone, no-one will ever be able to enjoy their services anymore. That holds true for all fossil fuels. If we’re talking about sustainable production of shale gas, we should not only look at good local environmental practices and short term reduction of greenhouse gas emissions. Sustainable extraction requires that part of the revenue from nonrenewable resources is invested in building a renewable substitute (e.g. Daly, 1990), so that the same level of services are available to future generations in a post-gas era. This means that revenues from gas extraction should be used to invest in renewable energy sources and green jobs, in good infrastructure, energy efficient housing, education and innovation. We all have a responsibility to communities and their heirs to prevent the mining-town boom-bust cycle.
My third point is that shale gas may be abundant, but is it really as cheap as we think? Already we see that shale gas production involves considerable social and environmental costs. They vary from place to place, and may not yet be institutionalized, but they are real. If it’s increased crime rates, split communities, water contamination, road degradation, industrialization of places of rural tranquillity or natural beauty, these costs are real and will eventually be factored in. Now they materialize as money spent on the PR battle and lobbying legislatures against stricter rules. They will become more institutionalized when permit fees are raised for stronger oversight and adequate permitting capacity at state departments, when new regulations with better safeguards for individuals, communities and the environment are adopted, and when new infrastructure, to treat waste water for instance, has to be built. Some say such costs will not be a show stopper, but a study by the Oxford Institute (Gény, 2010) estimated that in Europe production costs would be three times higher than currently in the US, which to a large extent is due to the more demanding regulatory context. ExxonMobil recently warned that any new government regulations on hydraulic fracturing could stop shale exploration (Reuters Africa, April 28, 2011). That should be a hint. Could it be that the US is experiencing a “shale bubble”?
To conclude, I hope that - in addition to the energy security and zero-carbon game - shale gas can become a game changer on a third playing field: the way we do business in the public domain. I hope the hydraulic fracturing PR debacle will teach lessons on more cooperative, 21st century decision-making. Instead of door-to-door lease acquisition, why don’t businesses invite NGOs to the table and help organize communities to start a dialogue about sustainable shale gas extraction, and allow time for a consensus to emerge? Failing to do so will get less and less done. When governments see their ability to safeguard public and environmental health compromised by huge debts, more of that responsibility befalls private parties."
Wednesday, May 04, 2011
Monday, April 25, 2011
A Shale Bubble?
After many violations of regulations, the first marjor undeniable hydraulic fracturing incident happened last week in Pennsylvania. A Marcellus shale well that Chesapeake Energy was hydraulically fracturing blew out, ironically enough on the first anniversary of the BP Deepwater Horizon blowout. Many words that the latter added to our vocabulary - such as 'top kill' and 'junk shot' - could be heard again. Although it remains to be seen what the damage will be, thousands of gallons of fracking fluid have spilled on the surrounding ground. It wouldn't surprise me if the industry's response follows the familiar pattern: they'll say that this is an 'incident', that many thousands of wells have been 'successfully fractured' in the past and that we should not ban a practice that for decades has produced 'clean, American, job-creating gas' based on one incident. It's a repeating pattern, but one that alienates the industry from the people, I believe, and does the business more harm than good. Following reports of violations, incidents and bad PR, public opposition has spread rapidly around the world. With their missteps and aggressive opposition against any new regulations could American companies spoil it for the rest? For Europe, for instance, it becomes much harder to reduce its ever-growing dependence on Russian gas and shut its coal plants if its people won’t allow exploitation of its shale resources. For the American industry itself it means its practices are unqualified for the more complex environments overseas. Some companies, Shell for instance, seem to realize this and have started calling for raising standards and disclosure of the chemicals used for fracturing. For other companies it is in their own interest to follow that example and lobby for stricter regulations and better oversight, as well as incentives for switching to gas for electricity generation and for renewable energy sources. That's how natural gas can earn its label as a bridge fuel to a low-carbon economy. For lawmakers, it is in the interest of American businesses to adopt such measures, starting with the FRAC Act. With stricter regulations may come higher direct costs. Does the Chesapeake well blowout tell us that abundant cheap shale gas is a myth, based on extraordinarily favorable circumstances that only apply in few areas? Have we been living in a shale bubble? Let’s get our feet back on the ground and raise that bar together.
Sunday, April 17, 2011
on certainty
At a recent conference I attended, scientists complained that decision makers want 100% certainty when it comes to forecasts of climate change and associated impacts, or else, they say, they can't make decisions. But who's actually using that argument? The decision makers with an interest in the status quo abuse it to take no action. In it lies an illegitimate running away from responsibility, shifting the political burden to science. If they were really looking for more certainty, they should put their money where their mouth is to get it. It's their job to either fund the research that can reduce the uncertainties or take responsibility for not taking action.
Monday, March 28, 2011
Plan B - the Film
I don't know if the DC environmental film festival saved the best for last, but the global premiere of "Plan B" was an excellent picture for the festival's final day. "Plan B" is the film version of the book with the same name by Lester R. Brown. Brown, a renowned environmentalist, travels all over the globe to warn for a collapse of civilization if it continues on the "fossil fuel dependent, automobile centered, throwaway" path it is on. That is Plan A. Plan B is his alternative, world-saving route. This may sound like the next climate alarmist movie, after Al Gore's "An Inconvenient Truth" or DiCaprio's "11th Hour," and alarmist it sure is, but it's different. Plan B turns your attention to food as the critical link in national and global stability. In multiple countries around the world where the state has failed (e.g., Somalia, Sudan), food insecurity played a pivotal role in the failure. So far, those cases of failing states have been isolated ones that took place in very poor countries, safe to ignore for the developed world. But Brown says we'd better watch them, because they could represent sneak peeks into the future, if global food security is increasingly stressed by a growing population, increased affluence, demand for biofuels and continued insults on production-sustaining natural resources, of which climate change is probably the most urgent one. Wherever he travels, Brown now asks the question: How many failing states does it take before global civilization fails? If Brown is right in that we'll see the number of failed states increase because of larger, systemic, and often environmental, causes that are not confined to the failing state itself, we may find ourselves ever more involved in dealing with social turmoil and conflicts, with ever less resources (attention, money) available to deal with the root causes. Hungry people that turn to the streets to protest, will probably not call for CO2 emissions reductions. The window of opportunity for a gradual and peaceful transition to sustainability may rapidly close. Plan B seems the safer bet to me.
Wednesday, March 16, 2011
Moral hazard of geoengineering is not to consider it
Today I enjoyed listening to a presentation on geoengineering at the University of Maryland School of Public Policy. Steven Smith, a scientist at the Joint Global Change Research, briefed a classroom filled with students and faculty on the subject.
Geoengineering encompasses engineered solutions to manipulate the radiation balance of the Earth, in order to keep the planet from warming too much. These measures include wild things like putting mirrors in orbit to reflect sunlight back into space, fabricating artificial trees that suck up CO2 from the atmosphere and spraying particles into the atmosphere to create clouds that increase reflection of sun rays.
Geoengineering scares many people. Not knowing what to do with it, a de facto taboo has kept the options off the table. Environmentalists feared that geoengineering would be regarded as a ‘quick fix’ to the climate problem and cause politicians to get lax on mitigation (i.e., reducing greenhouse gas emissions). Smith called this the “moral hazard” and suggested we make geoengineering subject to the condition that we get serious on mitigation first.
I wonder if that is at all necessary and a mistake.
It’s understandable that people have concerns about science fiction style measures like fertilizing the ocean to increase CO2 uptake by algae or putting mirrors in space, but geoengineering includes using olivine to sequester CO2 in rock and painting roofs white, too, which hardly anyone would object to. Should they all be grouped together?
In the Q&A after the talk, the notion emerged that ‘geoengineering’ is not a clear category of measures. In fact it’s a mixed bag of techniques, which employ different principles, are in different stages of maturity and have different risks and effectiveness. At this point, the options are neither ‘quick’ nor do they ‘fix’ anything really. What many of the geoengineering options have in common is that they don’t address the root cause of the problem they’re addressing: greenhouse gas emissions. As long as the CO2 faucet stays open, geoengineering measures will need to be applied indefinitely and at increasing scales.
That’s true, but not a reason to disregard them. With atmospheric CO2 concentrations at over 390 ppm and rising, and with certain climate change already in the pipeline, it seems to me that the moral hazard here is to neglect any options that could alleviate the problem. The fact that without reduction of emissions geoengineering measures will cost us increasing money, forever, should automatically lead economists and politicians to at some point conclude that geoengineering makes little sense without mitigation.
Geoengineering options should not be judged by their label, but deserve to be evaluated individually on their risks and benefits like all other options. To regard them as potential additions to our toolbox is to be preferred over dismissing them from the get-go. Some may never work out, but maybe there are some that can become lifesavers when emission reductions are too little too late.
Geoengineering encompasses engineered solutions to manipulate the radiation balance of the Earth, in order to keep the planet from warming too much. These measures include wild things like putting mirrors in orbit to reflect sunlight back into space, fabricating artificial trees that suck up CO2 from the atmosphere and spraying particles into the atmosphere to create clouds that increase reflection of sun rays.
Geoengineering scares many people. Not knowing what to do with it, a de facto taboo has kept the options off the table. Environmentalists feared that geoengineering would be regarded as a ‘quick fix’ to the climate problem and cause politicians to get lax on mitigation (i.e., reducing greenhouse gas emissions). Smith called this the “moral hazard” and suggested we make geoengineering subject to the condition that we get serious on mitigation first.
I wonder if that is at all necessary and a mistake.
It’s understandable that people have concerns about science fiction style measures like fertilizing the ocean to increase CO2 uptake by algae or putting mirrors in space, but geoengineering includes using olivine to sequester CO2 in rock and painting roofs white, too, which hardly anyone would object to. Should they all be grouped together?
In the Q&A after the talk, the notion emerged that ‘geoengineering’ is not a clear category of measures. In fact it’s a mixed bag of techniques, which employ different principles, are in different stages of maturity and have different risks and effectiveness. At this point, the options are neither ‘quick’ nor do they ‘fix’ anything really. What many of the geoengineering options have in common is that they don’t address the root cause of the problem they’re addressing: greenhouse gas emissions. As long as the CO2 faucet stays open, geoengineering measures will need to be applied indefinitely and at increasing scales.
That’s true, but not a reason to disregard them. With atmospheric CO2 concentrations at over 390 ppm and rising, and with certain climate change already in the pipeline, it seems to me that the moral hazard here is to neglect any options that could alleviate the problem. The fact that without reduction of emissions geoengineering measures will cost us increasing money, forever, should automatically lead economists and politicians to at some point conclude that geoengineering makes little sense without mitigation.
Geoengineering options should not be judged by their label, but deserve to be evaluated individually on their risks and benefits like all other options. To regard them as potential additions to our toolbox is to be preferred over dismissing them from the get-go. Some may never work out, but maybe there are some that can become lifesavers when emission reductions are too little too late.
Friday, November 12, 2010
Shale gas needs to be part of long-term energy strategy
Published in the Pittsburgh Post-Gazette, Thursday, November 11th, 2010 [update: a modified version was published in The Baltimore Sun on November 16th, 2010]:
Let's be smart about shale gas
Pennsylvania should look long-term and slow the boom to avoid the bust
Thursday, November 11, 2010
Marcellus Shale gas can be a boon to Pennsylvania, the catalyst of a clean, sustainable energy sector that creates lasting employment, provided the state doesn't buy into the boom-town mentality. A period of controlled growth would allow for informed debate on shale gas' role in Pennsylvania's energy future and, in the long run, would profit the state economically.
Unfortunately, the industry is in a hurry to extract this precious resource from the Marcellus Shale, prompting deep public concerns about the effects of its production on fresh water sources and human health. The debate has turned loud, extreme and unproductive. Facts and fiction have blurred.
When the shale gas industry convened recently in the former Pittsburgh Hilton, "drill-baby-drill" could be heard between the lines. "Wow" is how conference president Jack Lafield characterized Marcellus prospects. Speakers representing oil and gas companies that operate in Pennsylvania outbid each other with projections of high, higher, highest production rates for the region over the next decade.
The optimism was contagious. The curves only went up. "There's gas for another 100 to 120 years," said Martin Fritz of EQT Midstream. "We should do a better job at selling it."
Unchecked, this gold-rush approach risks quickly exhausting and wasting a valuable, irreplaceable resource.
Natural gas is the cleanest of fossil fuels, causing much less air pollution and only half as much CO2 emissions as coal when burned in a power plant. It's domestically available and can enable a clean, sustainable energy sector. Gas can be stored, and is versatile. It's too good to waste.
But judging by public comments, how the Marcellus gas is going to be used seems of little concern to the industry. Further, it denounces other, much-needed initiatives, such as wind and energy efficiency, as if they have little role to play in securing America's energy future or improving America's environment.
A more integrative perspective on the place of Marcellus gas in a sustainable energy sector is essential.
Gas can provide backup capacity for wind farms when the wind isn't blowing. Gas can generate cleaner electricity to propel electric cars and provide feedstock for hydrogen fuel-cell vehicles. Gradually replacing coal-fired power plants with more decentralized gas-fired, combined heat-and-power plants would cut CO2 emissions dramatically and enable super efficient local heating networks in urban areas.
The point is that Marcellus gas can be a crucial enabler of sustainable innovations. At present, though, the industry risks flooding the market, keeping prices unsustainably low and frustrating the development of other clean energy sources. Pennsylvania won't see the full promise of Marcellus Shale gas unless it is embedded in a long-term energy strategy for the region.
The gas industry is currently hyping the jobs that shale gas will bring, but they probably won't last long, nor go to many Pennsylvanians. A full-throttle ramp up is so quick that experienced employees have to be brought in from out-of-state. Currently, 75 percent of workers on drilling rigs in Pennsylvania are experienced professionals from Oklahoma and Texas.
By the time the regional economy generates a skilled workforce and specialized services and suppliers, production will be near, at or beyond its peak. And soon the gas will be gone, sold for low prices to fuel inefficient cars and heat badly insulated buildings. A more gradual and better-guided development of Marcellus Shale gas would allow a local energy sector and workforce to arise with better chances of long-term employment and economic benefits.
Pennsylvania regulators are not equipped to deal with the explosion of permit applications, and companies are complaining that long processing times are slowing Marcellus development. But maybe it's fortunate that regulators are understaffed, as this might buy the commonwealth some time.
If states in the Marcellus Shale region want to get the maximum return from their natural capital, in terms of long-term employment and revenue, they would do well to make shale gas production part of an integrated strategy for a sustainable energy sector and economy. They also would do well, while the industry is still learning fast, to let best practices for environmental protection, workforce training and corporate citizenship mature before the boom has come and gone.
Unfortunately, the industry is in a hurry to extract this precious resource from the Marcellus Shale, prompting deep public concerns about the effects of its production on fresh water sources and human health. The debate has turned loud, extreme and unproductive. Facts and fiction have blurred.
When the shale gas industry convened recently in the former Pittsburgh Hilton, "drill-baby-drill" could be heard between the lines. "Wow" is how conference president Jack Lafield characterized Marcellus prospects. Speakers representing oil and gas companies that operate in Pennsylvania outbid each other with projections of high, higher, highest production rates for the region over the next decade.
The optimism was contagious. The curves only went up. "There's gas for another 100 to 120 years," said Martin Fritz of EQT Midstream. "We should do a better job at selling it."
Unchecked, this gold-rush approach risks quickly exhausting and wasting a valuable, irreplaceable resource.
Natural gas is the cleanest of fossil fuels, causing much less air pollution and only half as much CO2 emissions as coal when burned in a power plant. It's domestically available and can enable a clean, sustainable energy sector. Gas can be stored, and is versatile. It's too good to waste.
But judging by public comments, how the Marcellus gas is going to be used seems of little concern to the industry. Further, it denounces other, much-needed initiatives, such as wind and energy efficiency, as if they have little role to play in securing America's energy future or improving America's environment.
A more integrative perspective on the place of Marcellus gas in a sustainable energy sector is essential.
Gas can provide backup capacity for wind farms when the wind isn't blowing. Gas can generate cleaner electricity to propel electric cars and provide feedstock for hydrogen fuel-cell vehicles. Gradually replacing coal-fired power plants with more decentralized gas-fired, combined heat-and-power plants would cut CO2 emissions dramatically and enable super efficient local heating networks in urban areas.
The point is that Marcellus gas can be a crucial enabler of sustainable innovations. At present, though, the industry risks flooding the market, keeping prices unsustainably low and frustrating the development of other clean energy sources. Pennsylvania won't see the full promise of Marcellus Shale gas unless it is embedded in a long-term energy strategy for the region.
The gas industry is currently hyping the jobs that shale gas will bring, but they probably won't last long, nor go to many Pennsylvanians. A full-throttle ramp up is so quick that experienced employees have to be brought in from out-of-state. Currently, 75 percent of workers on drilling rigs in Pennsylvania are experienced professionals from Oklahoma and Texas.
By the time the regional economy generates a skilled workforce and specialized services and suppliers, production will be near, at or beyond its peak. And soon the gas will be gone, sold for low prices to fuel inefficient cars and heat badly insulated buildings. A more gradual and better-guided development of Marcellus Shale gas would allow a local energy sector and workforce to arise with better chances of long-term employment and economic benefits.
Pennsylvania regulators are not equipped to deal with the explosion of permit applications, and companies are complaining that long processing times are slowing Marcellus development. But maybe it's fortunate that regulators are understaffed, as this might buy the commonwealth some time.
If states in the Marcellus Shale region want to get the maximum return from their natural capital, in terms of long-term employment and revenue, they would do well to make shale gas production part of an integrated strategy for a sustainable energy sector and economy. They also would do well, while the industry is still learning fast, to let best practices for environmental protection, workforce training and corporate citizenship mature before the boom has come and gone.
Mark Olsthoorn is a researcher at the University of Maryland's Center for Integrative Environmental Research (www.cier.umd.edu).
First published on November 11, 2010 at 12:00 am
Thursday, October 21, 2010
Energy lessons from the Nordic countries
This morning the Environmental and Energy Study Institute (EESI) had invited representatives from five Nordic countries to reveal why they've been so successful in reducing greenhouse gas emissions, implementing renewable power generation and taking energy efficiency measures. It was obvious that the Nordic countries felt very good about their frontrunner reputation, and rightly so. Why couldn't the US follow suit? This question wasn't really answered. I think there are quite some barriers to take before the US can go down the same route.
There seem to be three factors that enabled the Nordic countries to be so progressive. The first is abundant renewable energy resources. Norway is blessed with a lot of hydropower potential and has been getting its power from this carbon-free energy source since long. Norway's oil and gas are a an 'extra'; most of it is exported. For Norway energy is not a challenge, it's a source of income, said Fridtjof Unander of the Norwegian Resaerch Council. In Iceland there's abundant geothermal power available at low prices. Sweden also has quite a lot of hydropower and following the energy crises of 1973 it built nuclear power plants, making its power supply practically independent of fossil fuel. In addition, it has extensive woods, which provide a renewable resource for biomass when sustainably managed. The second factor is historically high energy prices. As Jes Christensen of the Danish Board of District Heating (DBDH) mentioned, Denmark has kept its energy prices for households high when prices declined after the oil crisis and they don't regret it. The country is used to high energy prices and with high energy prices energy efficiency measures and alternative energy sources have much shorter payback times. Prices for industry are not taxed as much and are at par with other EU member states.
A big thing in all Nordic countries is the use of waste and environmental heat for heating homes, or district heating. This means that waste heat generated in a power plant or in industrial processes is not dumped in the atmosphere or in river or sea water, but is transported to residential and commercial buildings for space heating. District heating can save lots of energy and be quite profitable, really. It requires a network of pipes to be constructed between the heat source and the heat demand, involving large investments and creating interdependencies between power plants and homes. Heat sources and demand should not be too far apart, otherwise losses and costs would become too large. In the Eastern US power comes from plants in Appalachian coal states and is transported over quite some distances. That's an extra barrier for implementation of district heating. In Denmark they had a similar situation, with a dozen central power plants generating electricity for the nation. Nowadays, the map of Denmark is dotted with many small combined heat and power (chp) generators, producing heat close to where the demand is and feeding electricity to the grid. You don't get the economies of scale of a large power plant, but the overall efficiency is much higher, compensating the loss of scale. Large amounts of renewable resources or high energy prices and shorter distances between supply and demand are the preconditions that helped put the nordic countries in the lead. These conditions are less favorable in the US. Yes, there are vast amounts of renewable resources - there's plenty of sun in the southwest and lots of wind in the midwest and along the ocean coasts - however, the demand is generally far from where the resources are. Besides, energy prices in the US are much lower than in the Nordic countries, giving any alternative a hard time to earn its place in the market.
But Jes Christensen touched upon another issue, too. He said: you have to do it together, and have fun doing it. And: Danes are the happiest people on the world. This caused laughter, but it's less of a joke than you might think and a crucial point indeed. Danes see value in collectivity, doing things together and cooperating to move the country forward. Apparently, the Danes are relatively united as to where the country should go when it comes to energy. Denmark (and other Nordic countries) has a different value system than the US, which made them accept keeping high energy prices in the first place, government interventions in the power market and more interdependence for the common good. It allows the nordic countries to organize the public and private capacities and harvest the low-hanging fruit. This is a fundamental difference between nordic countries and the US, where much of the economically profitable efficiency measures remain untouched (see Mckinsey 2007: Reducing US Greenhouse Gas Emissions: How Much at What Cost?). To see where this difference comes from, we may have to look at demographics. In Denmark more than 90% is of Danish origin. Other Nordic countries have relatively homogenous populations, too. In the US the vast majority may be white (79%), but the whites stem from a wide spectrum of European origins. Like it or not, Robert Putnam (2007) found that in the short term solidarity and trust - including trust in government and academia - suffer in ethnically diverse communities, which might complicate the consensus building needed to transform an economy. This effect may fade over time when younger generations with interethnic social networks grow up, but the urgency of the challenge leaves little time. (I'm NOT saying ethnic diversity should be limited. I'm much in favor of interethnic exchange and exploration and I think energy transformation can be used to foster that.)
In conclusion, the lessons from the Nordic countries are inspiring and valuable, but major differences in value systems and geography complicate their transferability to the US. In the mean time, in the US, the distrust and divides seem to only grow bigger.
There seem to be three factors that enabled the Nordic countries to be so progressive. The first is abundant renewable energy resources. Norway is blessed with a lot of hydropower potential and has been getting its power from this carbon-free energy source since long. Norway's oil and gas are a an 'extra'; most of it is exported. For Norway energy is not a challenge, it's a source of income, said Fridtjof Unander of the Norwegian Resaerch Council. In Iceland there's abundant geothermal power available at low prices. Sweden also has quite a lot of hydropower and following the energy crises of 1973 it built nuclear power plants, making its power supply practically independent of fossil fuel. In addition, it has extensive woods, which provide a renewable resource for biomass when sustainably managed. The second factor is historically high energy prices. As Jes Christensen of the Danish Board of District Heating (DBDH) mentioned, Denmark has kept its energy prices for households high when prices declined after the oil crisis and they don't regret it. The country is used to high energy prices and with high energy prices energy efficiency measures and alternative energy sources have much shorter payback times. Prices for industry are not taxed as much and are at par with other EU member states.
A big thing in all Nordic countries is the use of waste and environmental heat for heating homes, or district heating. This means that waste heat generated in a power plant or in industrial processes is not dumped in the atmosphere or in river or sea water, but is transported to residential and commercial buildings for space heating. District heating can save lots of energy and be quite profitable, really. It requires a network of pipes to be constructed between the heat source and the heat demand, involving large investments and creating interdependencies between power plants and homes. Heat sources and demand should not be too far apart, otherwise losses and costs would become too large. In the Eastern US power comes from plants in Appalachian coal states and is transported over quite some distances. That's an extra barrier for implementation of district heating. In Denmark they had a similar situation, with a dozen central power plants generating electricity for the nation. Nowadays, the map of Denmark is dotted with many small combined heat and power (chp) generators, producing heat close to where the demand is and feeding electricity to the grid. You don't get the economies of scale of a large power plant, but the overall efficiency is much higher, compensating the loss of scale. Large amounts of renewable resources or high energy prices and shorter distances between supply and demand are the preconditions that helped put the nordic countries in the lead. These conditions are less favorable in the US. Yes, there are vast amounts of renewable resources - there's plenty of sun in the southwest and lots of wind in the midwest and along the ocean coasts - however, the demand is generally far from where the resources are. Besides, energy prices in the US are much lower than in the Nordic countries, giving any alternative a hard time to earn its place in the market.
But Jes Christensen touched upon another issue, too. He said: you have to do it together, and have fun doing it. And: Danes are the happiest people on the world. This caused laughter, but it's less of a joke than you might think and a crucial point indeed. Danes see value in collectivity, doing things together and cooperating to move the country forward. Apparently, the Danes are relatively united as to where the country should go when it comes to energy. Denmark (and other Nordic countries) has a different value system than the US, which made them accept keeping high energy prices in the first place, government interventions in the power market and more interdependence for the common good. It allows the nordic countries to organize the public and private capacities and harvest the low-hanging fruit. This is a fundamental difference between nordic countries and the US, where much of the economically profitable efficiency measures remain untouched (see Mckinsey 2007: Reducing US Greenhouse Gas Emissions: How Much at What Cost?). To see where this difference comes from, we may have to look at demographics. In Denmark more than 90% is of Danish origin. Other Nordic countries have relatively homogenous populations, too. In the US the vast majority may be white (79%), but the whites stem from a wide spectrum of European origins. Like it or not, Robert Putnam (2007) found that in the short term solidarity and trust - including trust in government and academia - suffer in ethnically diverse communities, which might complicate the consensus building needed to transform an economy. This effect may fade over time when younger generations with interethnic social networks grow up, but the urgency of the challenge leaves little time. (I'm NOT saying ethnic diversity should be limited. I'm much in favor of interethnic exchange and exploration and I think energy transformation can be used to foster that.)
In conclusion, the lessons from the Nordic countries are inspiring and valuable, but major differences in value systems and geography complicate their transferability to the US. In the mean time, in the US, the distrust and divides seem to only grow bigger.
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