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Leaders face future complex

Complex future faces leaders

The Gazatte
Peter Hadekel

Trying to figure out what the world energy mix will look like over the next two decades is no simple matter.

The most important variable is price. Are we heading back toward the last oil peak of $147 U.S. a barrel, or will prices remain moderate?

Will governments respond to climate change with stiffer environmental regulation and more incentives for alternative energy sources?

How do leaders find a way to include the poor, when you consider that more than 1.5 billion people worldwide lack access to electricity?

Those were some of the tough questions kicked around yesterday at the World Energy Congress being held in Montreal.

There are plenty of potential energy reserves around the world, noted Fatih Birol, chief economist at the International Energy Agency. But the technology to develop alternative fuels can be expensive and will often require higher prices.

In this uncertain environment, there is a much greater role for government than ever before. While the market usually makes the best decisions about energy development, the climate change issue is now so great that governments must send the right signals, he said.

For example, China recently unveiled a $700-billion program to promote clean energy investment.

Germany has put development of nuclear energy back on the table. And the U.S. government is seeking to improve fuel efficiency in automobiles.

Those are all positive signals to market players, he said.

Government policy has already made a big difference in a country like Brazil, which has gone from a net importer to a net exporter of energy because of a decision to promote production of ethanol from sugar cane.

Birol said China will be a big factor in determining what the global energy market will look like. Ten years ago, the country used an amount of energy equal to half the consumption in the U.S.

Now, China consumes the same amount as the U.S. But there's a huge potential for even more growth since consumption per capita is only one-third of that in Western nations.

China plans a major expansion of its coal-fired generating plants -a policy that could have a big impact on greenhouse gas emissions and on market prices for both coal and gas.

The challenge is the same in India, said Vinay Kumar Singh, chairman of the Indian company Northern Coalfields Ltd. That country relies on coal for 54 per cent of its energy use and future economic growth for India's poor will be tied to coal use.

Debate over energy development is not something confined to China and India. Canada is a target of criticism because of this country's massive oilsands reserves, the world's second-largest hydrocarbon deposit after Saudi Arabia.

Rick George, chief executive of Suncor Energy, tackled the issue yesterday with a defence of oilsands production against criticism by environmentalists who label it "dirty oil."

"It's a memorable phrase, and unfortunately it's one that's caught on. But it's built more on fact than fiction," George said.

One U.S. group recently called on tourists to boycott Alberta until the province halts its oilsands expansion. But the group's claims are questionable, he said, including the assertion that "oilsands mining disturbs an area twice that of the United Kingdom."

"In reality, the mining is limited to an area one-third the size of the city of Montreal."

Another common claim is that the carbon footprint of oilsands production is three to five times larger than other hydrocarbon products.

Not true, George said. Oilsands production is only marginally more carbon intensive than other sources.

Canada is currently responsible for two per cent of the world's greenhouse gas emissions and the entire Canadian oil industry is responsible for just five per cent of that, he said.

George conceded, however, that end users of hydrocarbons, especially motorists, are the main source of the problem. Eighty per cent of emissions "come from the tailpipe."

And in his speech to the congress, he outlined measures the company has taken to address "serious and legitimate concerns" about the environmental impact of the oilsands industry.

These include cutting water use and carbon intensity in the production of each barrel of oil and reclaiming land from mine tailings.

El contenido de las noticias que se presentan en esta sección es responsabilidad directa de las agencias emisoras de noticias y no necesariamente reflejan la posición del Gobierno de México en este u otros temas relacionados.


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