February 24, 2017
Building more gas pipelines may not be so bright
February 24, 2017
As we report this week in Brussels Insider, the EU’s dependency on imported fossil fuels is taking on ever more alarming proportions, especially since we are talking about dependency on Russia above all. Even those who harbour no fears of Russia or anti-Russian feelings, will agree that this is not a healthy situation. It’s just not a smart idea to be so dependent on any one.
Of course EU policymakers have been aware of this for some time. It was one of the reasons – indeed, in the wake of the Crimean invasion, the most important reason – for Brussels to launch the Energy Union project. The Energy Union rests on five pillars – energy security, energy efficiency, internal energy market, climate action and R&D – but it was the idea of collective security against Russia that prompted then Prime Minister of Poland Donald Tusk to propose a united energy policy in the first place, in 2014.
As a result of this, observe Stefan Bössner and Douglas Fraser of the Stockholm Environment Institute, in a new article for Energy Post, Europe has been actively building more gas infrastructure, in an attempt to increase diversification of supply. LNG terminals in particular and Brussels is also pushing for new pipelines.
However, the authors note, none of this has resulted in increased diversification. On the contrary, the concentration of gas suppliers keeps growing – as does the import dependency.
Perhaps, Bössner and Fraser suggest, the EU should take a different tack – and concentrate on reinforcing its climate and energy policies. They note that “even though renewable infrastructure is expanding, there are signs of waning national support and fluctuating investment levels. Moreover, notwithstanding untapped potential, energy efficiency policies remain difficult to implement on a national level.”
According to Bössner and Fraser, “stepping up the game … can only be beneficial for the EU. Besides the economic and environmental gains, furthering the transition towards a low-carbon economy based on a renewable energy system has the additional value of increasing Europe’s energy security. Each kWh produced from wind, solar or biomass decreases the amount of fossil fuels imported from elsewhere and, ultimately, the cheapest fuel is the one not consumed at all.”
Full article: Energy Union should shift focus from energy to climate
Most oil and gas companies get hacked
February 24, 2017
We don’t often publish articles from company executives, but if they are good enough, why not? Judy Marks, CEO of Siemens USA, wrote a blog post for our sister website The Energy Collective in the US (owned by Energy Post, sponsored in part by Siemens) and we decided it was interesting enough to run it on Energy Post as well.
Marks writes that a new survey from Siemens with the Ponemon Institute shows that most oil and gas companies were hacked last year. Nearly 70 percent of oil and gas organizations have endured security compromises. These breaches have exposed confidential information and disrupted operational technology (OT) operations.
What is more, the threat against OT is growing: two-thirds of respondents said they believe attacks against industrial control systems have increased during the past few years.
At the same time, it turned out that only a third of respondents thought OT and information technology (IT) networks were fully “aligned for cybersecurity”. Little more than that – 35 percent – rated their readiness to address cyber threats as high. It is no surprise, then, notes Marks, that nearly half of all OT attacks are not being detected.
With the increased Russian hacking activity we are seeing at the moment (if we can believe our intelligence agencies), it is clear that this situation is quite worrying.
There are a number of things companies can do to counter the threat, writes Marks. The first priority for the oil and gas industry should be bulking up its defenses for OT attacks. Deploying state-of-the-art rugged network solutions and hardening assets are both necessary steps forward. Another important tool is security analytics to detect anomalies in data.
In addition, it is critical to develop comprehensive strategies to stand up operating models to manage risk. Successfully merging OT with IT is one priority. But so is having a plan for incident response that goes from the field, to the control room, to the enterprise network.
Lastly, every company needs to be focused on protecting their own operations. But there should also be more emphasis on working together to protect an industry. The industry could benefit from more information sharing. It could benefit, in particular, from having a global playbook tailored to both small and medium-size firms that covers how to protect assets and implement incident response, according to Marks.
How to get rich with carbon pricing
February 24, 2017
“We don’t need a weatherman to know which way the wind blows”, Bob Dylan famously wrote. With record temperatures soaring across the planet, there is little chance the climate issue will go away, no matter what some people may hope for.
Which brings us to carbon pricing, an inevitable concomitant to climate policy. Although carbon pricing (in the form of either a carbon tax or a carbon trading scheme) is gradually spreading across the world, it’s nowhere strong enough to really make a dent in energy investments – at least not so far.
One problem with getting higher carbon prices accepted, is that the costs are very clear but the benefits are not. The companies (and countries) who bear the brunt of carbon pricing have every incentive to lobby against it, but nobody has a direct incentive to lobby in favour.
Energy economist Adam Whitmore, never one to lack for an original idea, has come up with an idea to do something about it. He argues that the proceeds of carbon pricing should be put into wealth funds owned by the citizens of the world – or of individual countries, if organized on a national basis.
His reasoning is that the atmosphere belongs to everyone. Emitters of greenhouse gases should be paying a price for using the atmosphere – and they should pay it to the owners – i.e. everyone on the planet.
In a new article Whitmore has calculated that using up the atmosphere to the point where it has reached the 2-degrees Celsius level, is worth $130 trillion. This is what the price of carbon emissions should be to reflect the scarcity of the greenhouse gas “budget” still remaining.
If this money were to be put into citizens funds, people would be compensated for the higher prices of carbon-based products. It’s equivalent to $13.000 for each person in the world, Whitmore notes.
To read his proposal in more detail, check out the full article: How not to squander $130 trillion – a proposal to put carbon money in wealth funds
The inside story of EU energy policy
February 24, 2017
Our Brussels correspondent Sonja van Renssen met up with one of the heroes from the trenches of EU energy and climate policymaking. Green MEP Claude Turmes has worked tirelessly for 15 years to advance the energy transition in the way he believes it should advance. Turmes, whether people agree with him or not, is universally respected in Brussels for his knowledge and honesty.
The interview – on the occasion of a new book that Turmes has written on the European energy transition, to be published on 1 March – is quite chock full of fascinating insights and quotes from Turmes. Recommended reading.
Since the purpose of this section of Energy Post Weekly is to give readers a quick overview of what has been published on Energy Post in the past week (so they don’t have to read everything in detail), we have the highlights for you here, in the form of quotes from the interview.
- “We are at a decisive moment of planning and deciding Europe’s energy and climate policy for the years ahead. [My book will] to allow more people in Europe to understand where we are coming from and where we should go to.”
- “The energy transition is as much about the democratisation of energy as about greening, industrial leadership and job creation.”
- “Outside of a few energy companies – such as Dong in Denmark, maybe Eneco in the Netherlands and smaller ones like Ewe in northern Germany – all the others were not able to anticipate the energy revolution. Their first reaction was “let’s stop it” and the creation of the Magritte Group was all about that. It has lobbied at the highest level – prime ministers, European Commission etcetra – to destroy the European framework for the energy transition.”
- “I think a big difference today compared to 15 years ago is that then it was much more about [national] governments, the European Commission and the European Parliament. Today we have actors like cities engaged in a bottom-up movement. We have more possibilities for citizens and cooperatives to engage in their own personal energy transition.”
- “What is becoming more apparent now is that if energy-intensive industries oppose all change and refuse to pay for anything – and these industries consume almost a third of all electricity in Europe – this destroys the business of innovative energy companies.”
- “When I see the result of the EU ETS [Emission Trading System] vote in the European Parliament last week, which was the result of very intense lobbying sectors like cement and steel, I think one of the major stumbling blocks to move ahead is the refusal of energy-intensive industries to recognise that the energy transition is much more of an opportunity than a threat to them.”
- “The slowdown [in the energy transition] comes more from protecting old assets, especially our huge overcapacity of coal and nuclear in the electricity sector…. the game now is no longer about how fast we can go into renewables and energy efficiency, but how fast we can phase out old energies to create space for the new ones.”
- “What I try to show in my book is that this is not about sharing a burden, this is about sharing an opportunity. Europe has for too long spent billions buying oil, gas, coal and uranium from outside. This is an opportunity to create jobs and added value inside Europe.”
- “It is a bit hypocritical to have an Energy Union which wants to address everything but the risk from the nuclear industry.”
- “We will have to monitor the success but also the difficulties that arise with auctions. I think there is a big question mark over whether they will allow citizens, cooperatives and cities to take part. A second issue is the insistence of some civil servants in DG Comp [the European Commission’s competition department] to impose technology neutral auctions. I think one of the big battles will be to force DG Comp to drop this absolute claim of technology neutrality.”
- “I think the EU ETS – at least as long as we have unanimity on energy taxation – is the only way to get some pricing of CO2. My best guess also after last week’s vote in the European Parliament, is that we should introduce a carbon floor price.”
- (On being asked to pick one urgent action for future EU energy and climate policy:] “I think it’s identifying what I would call “Renewables Projects of European Interest”, be it offshore wind in the Baltic or North Sea, the fast development of electric vehicle charging stations in Germany or France, or projects in Southeast Europe to reduce capital costs. What is important is creating visibility and showing that Europe has an added value.”