Climate

The moment is coming for a Presidential decision on the Keystone XL project – the extension of a existing pipeline system designed to take over 800,000 barrels a day of crude from the oil sands of Alberta to the refineries on the Gulf coast. A few months ago the betting was that reluctant approval would be given. Now, however, the pipeline looks more likely to be the victim of Washington politics. Read more

The German election later this month might seem to be about to produce more of the same. On the eurozone currency crisis – as Quentin Peel wrote in the Financial Times a couple of weeks ago – the expectation of a big reform plan once Angela Merkel wins re-election has given way to the realisation that nothing much will change unless the markets force a radical response. Austerity and crisis management are the watchwords, and only a major event such as a collapse in the credibility of Italian debt repayment will force Germany to address the need for a full-scale resolution of the problem. That could involve the creation of a tighter EU core, or a reluctant acceptance that the euro as designed cannot work without a backstop funding mechanism in the form of Eurobonds. Nothing in the election campaign has provided a clue as to which of these alternatives will prevail.

Similarly on energy policy the election is beginning to look like a breakpoint which could have wide implications across Europe. But the direction of change remains uncertain and dangerously dependent on the precise make up of the next coalition government. Read more

At the last meeting of the President’s Committee of the CBI, the British employers’ association, members were asked to name the two biggest problems their companies faced. The answers were the skill levels of their recruits and energy policy – the chronic indecision of Whitehall which leaves investment frozen, prices rising uncompetitively and Ofgem warning about blackouts.

A few weeks ago at an Anglo Indian business summit one British bank Chairman warned the Indians that while an Indian energy strategy was clearly needed, the worst example they could follow was the UK model. Meanwhile on the serious side of Whitehall, there is increasing talk of a pre summer reshuffle to strengthen the Energy Department and even mutterings about abolishing the separate Ministry entirely and merging its functions back into the the business department. Read more

Those despairing of the lack of progress in managing climate change or the absence of practical and realistic energy policies in so many countries should take a look at the work being done by some of the world’s great universities.

In Durham, the Energy Institute has focused on the societal aspects of changes in energy technology. One of their main projects is to look at the role and potential of smart grids. Thanks to advances in IT, smart grids now offer the prospect of managing the distributed production and use of power in ways which will transform the economics of the whole sector. Smart grids create automatic processes which can help both businesses and households not only manage what they use but also to become producers themselves –selling power into the grid. Read more

Month by month, the consequences of the shale gas revolution in the United States are working their way through the international energy market. There has been much discussion of whether the US will permit shale gas exports in any quantity. But even before that is decided the growth of shale gas production in the US is already having an impact. The reduced need for US gas imports leaves supplies from Trinidad, North Africa and elsewhere to find a new home. That means that gas prices in Europe and Asia will fall. And even more important, shale gas is displacing coal from the US power generation sector. Read more