Categoría: Reports

In the EU, there´s a wide line of thought that, when referred to energy matters without any other consideration, imagines Europe as the “Green Camelot” of the industrialized world –with the exception of realistic countries such as Sweden, France, or Britain-. Many times, this is the deep essence of critical reviews on the United States and China policies.

Three contradictions

Actually, the European position is not as crystal clear as it pretends to be. There are a few contradictions:

First contradiction: Energy Supply Security. Europe has no energy resources, with the exception of Scotland-UK and Norway; these must be imported. But, in times of conflict, the peaceful EU supply depends on the US international means –Central Asia, Arabian Gulf, Mediterranean South-. What is the cost of this dependence? And the risk?

Second contradiction: Energy Affordability. Of course, a logical option for Europe is renewable energy because it provides autonomous and green power. But, there´s a problem: currently, renewables are far from grid parity with the exception of wind power.

Energy affordability is higher in countries with a reasonable share of renewables. According to WEC 2012 Index data, France, the United Kingdom, Sweden, or Finland pay between 0.16 and 0.22 USD per kWh, while in the opposite side Germany pays 0.32 and Denmark 0.36. Comparing these data with North America, we have to know that US citizens pay 0.12 USD per kWh while Canadians only pay 0.09 USD.

Intensive green policies are available for rich countries like Denmark, but it is a social problem for the poorer. In fact, in January 2014, because of the pressure of public opinion, Spanish electricity suppliers have shown how the real cost of power paid by consumers is only the 38% of the total bill; the residual 62% are taxes and levies that end up in government coffers.

Also, there is a similar scenario when drivers refuel their cars with gasoline –petrol- or diesel. Most Europeans pay taxes between 3 to 4 USD per gallon –this is taxation from 50 to 60%-; Americans only pay 0.5 USD -source: New York Times NYT-. The different price between Brent Crude and West Texas Intermediate hasn´t to do with such different taxation; it is a simple matter: it is a hidden financing source for European governments. But, what will be when most cars become electric vehicles? How will be compensated this loss of governmental income?

The extreme-renewable policy is inconsistent with energy affordability; so, it has a negative social impact. Environment protection is a praiseworthy aim, but it has an economic cost that´s mirrored by the energy bill beyond the regular taxes as VAT. Someone has to pay it.

Third contradiction: Energy Impact on Health and Environment. In Europe, there is a wide popular sensibility against energy technological progress because of its potential environmental risk or its immediate impact. This sensibility is against nuclear power, shale gas, and even against hydro-power or wind-power.

The point is that mostly this rejection is against the “concept itself”. To claim a good guarantee –for example, with respect to fracking technology- is logical, but it isn´t the case. It seems to be a matter of distrust, ultra-eco-ideology, and ignorance of real data. How many Europeans know that shale gas is very similar to conventional natural gas with less than half-life cycle greenhouse gas emissions than those of coal-fired electricity generation? –see 2012 “Natural Gas and the Transformation of the US Energy Sector: Electricity” National Renewable Energy Laboratory NREL with the cooperation of experts from the University of Colorado-Boulder, the Colorado School of Mines, the Colorado State University, the Massachusetts Institute of Technology, and Stanford University-.

This resistance ignores, or hides, the lung cancer, heart diseases and deaths caused during the last decades by carbon emissions from fossil fuels: in Europe 455,000/year premature deaths according to European Environment Agency EEA . It is annually, much worse than the forecasted thousands of victims of the 1986 Chernobyl disaster in Ukraine/USSR, – see United Nations UN 2005 Report “Chernobyl´s Legacy: Health, Environmental and Socio-Economic Impacts and Recommendations to the Governments of Belarus, the Russian Federation and Ukraine” –. In America, 200,000/year early deaths are due to analog causes according to the Massachusetts Institute of Technology MIT’s Laboratory for Aviation and the Environment. The same could be said about acid rain and global warming.

From an environmental point of view, national governments are conscious that high energy consumption rates are incompatible with fossil fuel technologies, but sometimes, due to electoral reasons, policymakers are too sensible to public pressure –Germany case, as a reaction to the 2011 earthquake and tsunami that devastated Fukushima with the consequence of the incident at its old technology nuclear plants-. Does anyone remember how many deaths or diseases have been caused by the Fukushima nuclear incident?

Without any doubt, environmental risk must be under control within reasonable ratios. However, it is convenient to remember the known Roosevelt’s thought: “Only thing we have to fear is fear itself”. It is because this irrational fear to a potential impact on health and the environment stops progress and makes to last longer the worst scenario: the current one.

There still is a fourth contradiction, but, in this case, the US and EU positions are coincident. Governments with an active eco-speech against CO2, subsidize intensively the polluting coal industry. –for US, see 2011 “Mining Coal, Mounting Costs: the Life Cycle Consequences of Coal” Center for Health and the Global Environment at Harvard Medical School and “Federal Coal Subsidies” by Source Watch-.- for EU, see 2010 “Germany wins extension of coal subsidies” by ft.com and “EU coal nations win fight for subsidies to 2018” by Reuters- . Only extra-environmental reasons, such as lobbies and mining unions´ pressure or energetic independence, justify this contradiction.

From   «ESCOs, Myth and Reality»  Ribes&Casado